Proposal
Summary
This proposal seeks to allocate development resources to safely recover user funds that have been inaccessible in Venus Pools since a 2021 incident involving Rake Farm. Based on available data, approximately $2.77 million in assets remain locked and unrecoverable by their owners. The recovered assets will be held in custody by the Venus Treasury, where they will remain permanently claimable by their rightful owners. This action demonstrates the Venus DAO’s unwavering commitment to its users and protocol integrity.
1. Background & Scope of the Issue
In early 2021, a technical failure related to the conclusion of a yield farming program on the Rake Farm platform left user funds locked in Venus Pools. Rake Farm was developed by “Forex Shark” a developer with questionable reputation in the DeFi space. As detailed in a public Medium article from the time, the root cause was a bug in the version of AutoFarm that Rake Farm forked. This bug prevented users from withdrawing their funds if the vault’s earn() function had never been called. This vulnerability was triggered when Rake Farm concluded their program and disabled the vaults without ensuring users could withdraw first, permanently trapping the assets.
The value of these assets has grown significantly since the incident. The originally locked value of $1.32 million has appreciated substantially based on available data.
The affected vaults and contracts are:
| Asset | Contract Address | Value Locked (2021) | BscScan Balance | BscScan USD Value² |
|---|---|---|---|---|
| vBUSD | 0xDF3df3EE9Fb6D5c9B4fdcF80A92D25d2285A859C |
$303,300 | 9,269,296.99 | $206,962 |
| vBTCB | 0xB3bCA2C1c2C4DF2C903BE3F341C96732Ac8b3c12 |
$269,800 | 453.06 | $824,630 |
| vETH | 0x9E3e8878B53c5762Ec6F461701f02ee6d1D9d19C |
$259,900 | 11,150.83 | $707,581 |
| vUSDC | 0x7485704d8B6cEBd1411F5AAfEB063e6f2816069A |
$193,900 | 21,111.84 | $544,726 |
| vLINK | 0x0b09Efc9458c00354414D2A560aA6EDa19490169 |
$95,400 | 232,283.97 | $62,962 |
| vUSDT | 0xc6f470dA6C284D16647CEE2230522a85b0818f6D |
$91,500 | 10,023.06 | $253,656 |
| vDOT | 0x568254EAAC1476faf9A908e577faa3Ab96029801 |
$33,700 | 55,333.23 | $2,863 |
| vBNB¹ | 0xf498e4C06CcE3bFeaD5f32a69Db3d39af401E122 |
$73,300 | 7,397.38 | $164,820 |
¹vBNB vault marked as “disabled” - requires validation
²USD values based on available data and require verification
Total Original Value (2021): $1,321,800
Total Current Estimated Value: $2,767,200
2. Motivation & Rationale
These are not protocol-owned funds; they belong to individual users who have been unable to access them for nearly five years . This situation presents a critical opportunity for the Venus DAO to take decisive, positive action and set a new standard for user protection in DeFi.
3. Proposal Specification
We propose that the Venus DAO formally commits its development resources to engineer and execute a safe recovery of all identifiable user funds from the affected Venus Pool contracts.
The execution of this proposal will involve the following concrete steps:
- Technical Analysis: Venus developers will conduct a full technical analysis of the affected smart contracts to architect a secure and non-disruptive recovery method.
- Fund Recovery & Treasury Custody: Once a secure method is validated, the locked assets will be recovered and transferred to the Venus Treasury. The Treasury will act as the custodian of these funds.
- Permanent Claimability: A secure and publicly accessible claiming mechanism will be established. Claims will be honored from the original, individual depositor addresses that deposited into the Rake Farm contract, verified via on-chain history. These owners will be able to claim their recovered assets at any time in the future, with no expiration date.
- Financial Benefit to the Protocol: While the funds are held in custody, they will be integrated into the Venus Treasury. It is important to acknowledge that a significant portion of these funds is likely to remain unclaimed indefinitely, as some users from 2021 may have lost access to their wallets or private keys. This provides a substantial, long-term financial benefit to the protocol while preserving the right of any original owner to reclaim their assets.
4. Key Benefits for the Venus Protocol
- Demonstrates Unwavering Integrity & Builds Trust: This action sets a powerful precedent. By ensuring funds are permanently recoverable, Venus demonstrates a level of user commitment far beyond any other major DeFi protocol. This builds unparalleled trust and loyalty within the community.
- Powerful Marketing & Public Relations: The recovery of user funds with an estimated value of $2.77 million is a monumental news story. Headlines about a DAO not only recovering funds but guaranteeing lifetime access would generate immense positive press, positioning Venus as the safest and most user-centric lending protocol.
- Substantial Financial Upside for the Treasury: The Venus Treasury gains immediate custody of assets with significant value. While claims will be honored, a substantial portion is expected to remain with the treasury permanently, providing a strong financial upside that directly rewards the DAO for its ethical stance.
- Turns a Past Incident into a Lasting Strength: This proposal transforms a legacy issue into a definitive, ongoing demonstration of the DAO’s values, directly enhancing the protocol’s reputation for safety and integrity.
We kindly request the Venus community’s discussion and support for this proposal. Thank you!