This post is in regards to the following grant and really is as bad as the title sounds
Summary
In regards to the Furucombo-$ARB Bi-weekly #5 reward epoch
- Furucombo in their rewards program with Arbitrum, was designed to incentivize user transactions, reimbursing users the fees they charged as well as earning user some rewards.
- Furucombo charged user $52,171 in the form of $ETH in fees.
- Furucombo did not distrubte Arbitrum rewards - On April 10, 2024 Furucombo proposed it will not even reimburse the fees taken but instead they will keep the majority of fees to themselves as well as the rewards. Only a very small portion of the fees in the form of 8500 $ARB (~$9,500) were to be distributed. (8500 ARB distributed as of April 17th)
The entire situation can be sumed up as an incentive structure that you could say trapped users into using the protocol in a way where Furucombo could later say was misuse. Allowing Furucombo to steal $42,671 from users and claiming innocence all while
Hsuan-Ting is suggesting Arbiturm is supporting their actions of stealing users funds.
Furucombo never stopped the campaign, never tried to inform users of misuse. After the campaign ended Furucombo never gave any user an opportuntity to discuss anything related to the campaign missunderstanding. It is almost as if Furucombos actions were intentional.
Time Line of Events
- Furucombo submitted a claim to the STIP campaign
- Granted 59,500ARB through the backfunding of the original STIP campaign that passed quorum but wasnât allocated via the original proposal
- Created campaign as detailed in th original proposal
- Feb 23rd, altered the details of the campaign to include 'ANY trading action on the Lending Dashboard (as per this post: https://twitter.com/FurucomboDB/status/1761019495869460775)
- March 28th Round 5 campaign ends
- April 10th, announced the new âreward scheduleâ from the anticipated 57,028ARB to 8,500ARB
- Aprill 17th 8500 ARB distributed
Furucombo claims
My Response
I do not deny the claim that there was some users doing multiple swaps, this is likely. What I challenge is Furucombo deciding that they hold no fault in incentivizing âwash tradingâ and then they are okay with taking those users funds without ever making any effort to seek an actual reasonable outcome. There is no evidence of theft from users as Furucombo control all the rewards as well as the fees they took. Hsuang-Ting has even threatend to take all the funds it has taken from users and returning nothing.
As stated below, the wallets are obvious and the high swapping didnât occur until the last several days allowing any user to participate in rewards up until the last day. Does that really sound like âmalicious actorsâ trying to get away with something âwrongâ? Maybe not everyone in crypto knows about this âwash tradingâ that was incentiviezed isnât allowed.
Meanwhile, after holding $52,171 of fees taken from users for several weeks Hsuang-Ting threatens taking all the fees. It is possible he will still do this and the users are just individuals at his mercy who try to make their voice heard. I just hope that if he goes this route Arbitrum at least get these fees back from them, I see in no way why he should be allowed try and steal from users and therefor indirectly be stealing from Arbitrum.
The community tried to speak with Hsuang-Ting, CEO of Furucombo publically and privately but unfortunatly most of the responses from Hsuan-Ting was threats (above), name calling, laughing/mocking react emoji, and/or just ignoring. There was never at anytime that I am aware of that he was engaged in constructive conversation about a solution.
Hsuan-Ting Laughs at users frustration with him ignoring his DMâs
I guess Hsuan-Ting is suggesting he deserves the fees he has taken to pay for his time???
There are many more text from users in discord, Blazar is part of the Furucombo core team. Users are seeking collaboration, understanding, feedback and it appears Blazar is giving filtered canned responses.
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Here are some more responses from Hsuan-Ting in the tg. suggesting he is working with Arbitrum saying they are not to reward wash traders. I am curious, did Hsuan-Ting disclose to Arbitrum that he was infact incentivizing what he is calling âwash tradersâ and then taking those fees for himself.
Does arbitrum know Furucombo has taken $52,171 from users by dangling $ARB rewards?
Event Details
Furucombo had several rounds of funding from Jan 8 - March 28.
Looking into the distribution of rewards during these weeks youâll find usage of the protocol pretty much was non-exsistant with the first week having about 14 addresses and by week 3 only 9 addresses using the protocol.
In an effort to drive up usage furucombo posted on Feb 23 that now swapping would be rewarded. As a result there was a slight increase in usage but not much. By the last week and leading up to the last days of the rewards program there was still much of the rewards unclaimed. It wasnât until a few days before the entire event ended, March 14th when swap functions were starting to be performed. These swap functions were performed over the remaining days of the event with a significant portion being traded on the last day. It appears of the ~45 address in the last epoch maybe 30 of them performed a significant amount of the swapping volume collecting significant rewards.
How were the rewards are distributed
Furucombo incentived various interactions on their protocol but built in a fee for each of these interactions.
The fees Furucombo takes is roughly 50-60% of the $ARB rewards in the form of $ETH fromt their users. So after the each epoch the user would be returned their fee they paid in $ARB + the reward as an incentive to attract usage. Each of the epochs the rewards were distributed within several days. The last epoch which ended on March 28, 2024 however has yet to be distributed.
What this means is from March 4 - March 28
- Furucombo has collected $52,171 in the form of $ETH in fees from users
- In return Furucombo was suppose to send 57,028 $ARB ($66,153 todayâs price)
- However, Furucombo has proposed rather than paying the promised amount they are suggesting they only send 8,500 $ARB ($9,859).
Essentially what this means is Furucombo is suggesting they steal $42,312 from their users
PROPOSAL
I am asking all users recieve $0 in rewards, due to a poorly handled PR I believe it is beyond fair to just zero everything out. I only ask all users simply get the funds Furucombo has taken. I am not even asking for interest or any rewards, just a reimbursement from what was taken.
What I think Arbitrum Should Propose
Due to miss handling of grant funds and poor PR from Hsuang-Ting. Arbitrum should distance itself from Furucombo and support the following:
1.) return all stolen funds to users
2.) All remaining funds to be returned to Arbitrum DAO
3.) Furucombo to permenantly be disqualified from any future Arbitrum grants
Last Words
I am sorry to have to bring this up to the the Arbitrum DAO I feel this could have been resolved in a professional manor between the users and Furucombo. I tried reaching out to Hsung-Ting and here is the message I had prepared for him which he never gave me the opportunity to share. Instead I was ignored and then on April 10 thats when I found out of the fees I paid and expected reimbursed 80% would be sent to Hsuan-Ting pockets.
Hey Hsuan-Ting,
Iâve been a participant of the most recent rewards program. In regards to the rewards program, I saw the updated post about including swaps in the program. I had done a few and then even shared in some tg groups about the furu program.My thought was furu is incentivizing swaps so if they are incentivizing it then itâs fair game. But in any case I waited until the last week to allow others to participate till the end of the campaign.
After I heard the rewards were under review I re-read the campaign rules again (for a 3rd time) this is when I noticed for the first time that furu had a statement about to not abuse and that it would be reviewed. I had no idea that was stated. I donât know if others were careful about their transactions but clearly looking at the dune analytics users would have been a lot more secretive about doing swaps if I or others were intentionally trying to hide and do something malicious.
I canât speak for everyone but I fully believed I wasnât doing anything wrong and still at this point am a bit unsure of the problem. My ask would be if there is a problem to reimburse the fees taken from the transactions. I think that is a fair ask. I and I am guessing others simply saw any activity as a win win, furu gets some users, rewards, as well. I had no intentions on other users being negatively affected as you see the rewards stayed available until the very end of the epoch to allow anyone an opportunity for the program. This was an honest oversight that seemed acceptable since it was incentived. It was not intended to hurt the community, protocols, or users.
UPDATE
Before posting this I have tried to reach out again to Hsuan-Ting. I wanted to give him time to respond about 3 days but when I saw his status turn from âlast seen recentlyâ to âlast seen a long time agoâ inn one day, that indicates he has blocked me. Without posting all the screenshots, you can see I gave a kind request and shared with him with full transparency what I intend on posting. Before escalating I went to him both privately and then kindly in their public tg. Once again ignored so I feel this is the next appropriate action.
Thank you for your input I look forward to hearing from community on this.
