On January 7th, 2023, Mycelium shared details on an ETH-USD price arbitrage that impacted the value of MLP. The net effect of which was a loss of approximately 4.5%. A broader explanation regarding what happened was published on January 16th, 2023.
Today, we are sharing details on the methodology to compensate LPs, in a fair and equitable way.
The snapshot of LPs was taken at block 51210000 (12:01 PM JAN 6TH 2023 UTC). Where the exploiting wallet address was first noticed. The exploit was over by block 51310000 (9:56 PM JAN 6TH 2023 UTC). Which allows for a slight buffer period.
There is a total of 164 ETH being distributed. Which is made up from:
- 157 ETH from fees collected over the exploit period + Mycelium’s share of fees from that entire fee week;
- 5 ETH from Mycelium’s share of fees from the following fee collection period; and
- 2 ETH from Mycelium’s share of fees from the next fee collection period.
A block-by-block analysis was completed to equitably allocate rewards issued to LPs on a pro-rata basis. Where the total number of blocks that LPs had exposure to MLP during the exploit was assessed and will be paid out based on the relative number of blocks exposed. Where an LP who held the entire duration of the exploit would be eligible for higher rewards than an LP that withdrew funds prior to block 51310000.
When you navigate to https://swaps.mycelium.xyz/earn, under the Rewards section you will see an Airdrop Rewards section where eligible LPs can claim their eligible Rewards by clicking the “Claim LPs Airdrop” button.
The total rewards collected during this (exploit) period was 182 ETH:
- 18.9 ETH distributed to LPs
- 4.05 ETH distributed to Stakers
- 1.35 ETH distributed to Traders
- 0.7 ETH distributed to Referrers
- 157 ETH from initial exploit + Mycelium eligible distribution directed to LPs
The total rewards collected during the following period was 62 ETH:
- 43 ETH distributed to LPs
- 9.3 ETH distributed to Stakers
- 3 ETH distributed to Traders
- 1.44 ETH distributed to Referrers
- 5 ETH Mycelium eligible distribution directed to LPs
The total rewards collected during the period two periods following the exploit was 32.314 ETH:
- 22.631 ETH distributed to LPs
- 4.84 ETH distributed to Stakers
- 1.6 ETH distributed to Traders
- 1.07 ETH distributed to Referrers
- 2 ETH Mycelium eligible distribution directed to LPs
All rewards not claimed within a 4-week period will be rolled over into MLP rewards over the following weeks (smoothed out proportionally to provide a multi-week boost).
