Proposal re recovering 10 eth - help / support please

Proposals
1

Hello everyone - first post.

I am starting this threat to look for support in navigating this situation, and for conversation if a Snapshot follows from it (which I am hoping will follow).

On 9 May, I made a terrible mistake and transferred $19,970 in USDT out of my metamask wallet. I thought I was sending it to my hardware wallet, but mistakenly sent it to the Uniswap V3: Router 2 smart contract - txn 0x427 . This is a lot of money for me and my family. It’s cringy, but I was moving the money to pay for school fees.

An MEV Account 0xa19 picked up the funds straight from the smart contract in txn 0xd9f in the same block, swapping it for eth, and sending it to 0x333 . 0x333 then, in the same block, sent 10.4 ETH to 0x388 Lido: Execution Layer Rewards Vault in txn 0xc569 .

This is my money, that 0x9df / 0x333 has picked up, and started controlling, and seems to be held by the Lido vault 0x388 at the moment.

(As an aside, in trying to figure out what to do, it’s been put to me that this is analogous to me sending the funds to 0x00…00 - I don’t agree however as the funds didn’t disappear into a hole, they just transformed and manifested in another person’s single account. The funds deposited in account 0xa19 in that block are directly from my transfer (and the fact that they came into existence, and the size of the deposit is a direct consequence of the transfer I made). It’s not at all like me setting paper cash on fire and asking everyone who benefited from the deflation to compensate me - it’s much more analogous to dropping cash on the floor and someone else picking it up.)

I would like to put forward a proposal to have the funds returned to me - I presume via Snapshot / Aragon voting.

I am out of my depth here however, and would like a steer on setting up the Snapshot (or other method to put this to the community). I see there are some analogous situations that have happened, e.g. compensation from DAO Treasury in the BloXRoute situation - also in which the ‘wrong pocket’ funds were help in the execution layer.

Is there anything else I should do before creating a Snapshot on this? Any other things I should understand or read? Any other proof I should show/create (signed message, etc.)?

All support appreciated.

Thanks.

2

This type of proposal is more likely to succeed or receive a sympathetic ear if it is deliberately accurate.

You are proposing the reversal and redirection of fees collected for using software, along a chain of fee collection events, which is something different than moving your “property” from one place to another and then discovering it there.

1 Like
3

Thanks for that feedback.

I was trying to keep the description understandable - sorry if I said something inaccurate. I am not a technical DeFi specialist, so do not know here what is technically the underlying property, and what is a fee which arose because of the transfer of the property.

The following is true though:

  • I tried to transfer 19970 USDT to myself (for simplicity, let’s assume this is worth the same as 10 eth)
  • My mistake meant that either:
  1. the underlying property became available/controllable by the MEV; or
  2. my property was destroyed, and a fee of the same quantum (or less) became available to the MEV.

If any of that is technically wrong, please reply here. If anyone can say which of (1) or (2) it is, that’s helpful.

In either case though, I had no intention of giving it to a third party, and my mistake meant I have nothing, and the MEV has 10 eth. I don’t see how the transformation from ‘property’ to ‘fee’ materially changes the analysis - the property and the fee seem inextricably linked to me¬: the destruction of the property created a disproportionately large fee, connected in size to the underlying property. The MEV couldn’t have collected a 1000 eth fee - it was 10 eth because the property destroyed was 10 eth. On the flip side, if it always ‘cost’ a fixed 0.1 eth fee to process a mistaken transaction like this, and that 0.1 eth went to the MEV, I wouldn’t have a problem - I would understand that as clearly being a fee that relates to the operation of the system, brought about by my mistake, but not being the property which was the subject of the mistake.

However because they are connected in time (same moment), and size (fee is limited by size of property), and have a direct cause/effect (the destruction of the property was sufficient and necessary for the creation of an equivalent size fee) - I don’t see how they should be considered different property.

If I have missed the point, please let me know. Any more technical details gratefully received.

4

A similar situation happened recently, where a Sushiswap trader lost money by authorizing a bad transaction and then approached LidoDAO about it (Thread 1, Thread 2.) LidoDAO did not vote to send money to the trader and should do the same in this one.

Fact is, the funds in the EL rewards vault don’t belong to LidoDAO but to stakers, and the DAO has no control over them. Acting as an arbitrator between third parties who lost money to MEV and stakers would be highly problematic for Lido for three reasons:

  1. An MEV arbitration policy opens a significant attack surface on Lido.
  2. Lido is neutral middleware.
  3. Lido should minimize the role of governance.

For the full arguments, please read the threads linked above.

I understand that you didn’t mean to send your funds to the wrong address, and I am very sympathetic to this request on a human level. However, the DAO doesn’t and cannot think and operate at the level of individual humans but in units of broad policies that treat all Ethereum users equally. If users could appeal any transaction they regret, almost every block would get appealed later, and being a validator would be super complicated. That would completely erode the neutrality and robustness of Ethereum’s base layer.

5

Thanks for making the connection and these comments @hasu. I’ll read through the whole thing. As an initial set of thoughts however, I’d say the following:

I would say the funds belong to me (notwithstanding property <> fee debate above). They are controlled by a staker-DAO combination (the details of which I don’t understand, and is part of what I’m trying to explore) - but I think important to be clear about legal title versus control here.

I agree any blanket policy here raises complications. But it seems that the DAO is internally self-sovereign and can decide what to do in any circumstances based on a Snapshot / Aragon vote (notwithstanding stated ‘policy’). Any decision to never actively return property to people is also itself a policy, which (even if could be enforced against the wishes of a majority) the policy makers would need to get comfortable with in all circumstances, with no exceptions under any circumstances. If there are exceptions, then we’re back to it being discretionary…

Thank you for your sympathy. I am not looking for special treatment (e.g. do this because of who I am), I’m asking for this to be assessed based on the facts / standard processes & votes.

I don’t quite follow. Users can already appeal any transaction, e.g. what I’m asking for here. It feels you’re worried that a precedent of approving an appeal would: (a) be binding on the DAO in the future; or (b) encourage further appeals which are either themselves sham appeals, or would be bona fide appeals, but the volume would be too high.

I’m not suggesting a blanket policy that any appeal being approved or considered, I’m asking for this block to be considered. Equally, I’m not suggesting a binding precedent.

If this sort of thing does mean that the volume of appeals becomes too high, then it feels more like a filtering problem, resolved by guidance on how the community is asked to vote/typically votes/‘should’ vote & what sort of appeals / remedies are technically feasible or not might be put together. Again, it seems like a filtering / UX problem however.

6

In my opinion, this is your main mistake.

You yourself created the transaction and you signed it digitally with your private keys and you broadcasted it to the ethereum network. That is, you yourself voluntarily digitally transferred ownership by your means to another address. This means that these funds no longer belong to you due to actions you have performed by you of your own free will.

This is not going into the details of this particular situation.
If we go deeper into the specific situation, then, as you described, the funds have already changed ownership in connection with other signed transactions on Ethereum network after that. So even if you think it’s your property, it seems logical to me to make a proposal to whoever (apparently this is some Uniswap entity) controls the address (0x68b3465833fb72A70ecDF485E0e4C7bD8665Fc45) where you mistakenly sent funds.

7

Thanks for engaging with this. I appreciate your viewpoint.

Yes, and quite a mistake. I completely agree that I made, signed and broadcast the transaction, using my private keys, and did so voluntarily, with my own free will. I did not voluntarily pass title to a new person however - as that was not my intention. Take 2 examples:

  • if a person posts cash to themselves from one physical location to another, but puts a typo on the envelope so the cash goes to a neighbour, or puts their old address down by mistake - they clearly weren’t intending to give that money to someone else, and I don’t think many people (or courts) would say the cash belonged to the lucky recipient. Of course, the sender will be in a tough spot trying to unwind this - they won’t have much evidence, the recipient would likely play dumb, the police wouldn’t care, ‘you should be more careful’, etc. - but I don’t think it’s right to say that proper legal title to the property belongs to the lucky recipient, and that they have a better claim to ownership than the sender. Is that your position?

  • in a wrench attack, we have very similar facts, except the intention is to send it to a third person (whether crypto or cash in the post) - but it is done under duress, and I think most people (and courts) would say that the recipient of the funds does not have a better legal claim to title of the funds than the sender that was forced to send the funds. Do you also think that the funds don’t belong to the victim of a wrench attack? If not - you see that ownership and control are distinct concepts.

It’s an option I’ve considered (and am still considering as a fallback). I don’t think it’s held by a Uniswap entity, but by a separate MEV/flashbot - and so I expect if I ask for it directly (aside from the admin of how to do that? issue an NFT to the account asking for the funds back?) the funds will become unstaked and there will be no community of good, honest, accountable people that I can appeal to for help.

8

Disclaimer: Opinions expressed are solely my own and do not express the views or opinions of any organisation including DAO.

My personal position is that operations in the crypto space are irreversible, and that’s the first thing you should have learned when starting to do anything in the cryptospace. And there is no need to compare decisions in the usual vertical (goverment) management structure with how one could act in the cryptospace, where everyone acts on the basis of their economic initiatives. This is exactly what the crypto space was built for, so that there is no single body with complete power, but everything is in balance thanks to the architecture with the right initiatives.

This should be the first thing you do, not what you consider, since the further movement of funds was only economic agreed-upon transactions. First you need to come to a consensus with the address where you sent the money, that this is your money and the one who controls this address agrees with this, and then, when this agreement is reached, discuss there the technical possibilities of their return.

9

Yes, we have different views here. My view is that the concepts of property and property rights do apply in crypto, and that the underlying assets are owned by a person (not just abstract actions based on economic incentives) and remain owned by a person until they relinquish those rights. My view is that these property rights arise on their own merits/foundations based on culture & law, and are not something that individuals can elect for them not to exist. It’s ok that we differ here - I think we just have different perspectives on what ‘being property’ means. I think (and hope) you’re in the minority however :wink:

Apologies for the fiat analogy again, but here’s how I saw it: an opportunist regularly camps out at a place where people typically drop their cash. The opportunist has invested in good technology to pick up the dropped cash faster than anyone else. The opportunist then goes and puts the money in a bank account. If the real world, if you have the right evidence, you could recover your money from the bank. This would generally be a better idea than trying to recover directly from the opportunist, as they might disappear once you talk to them. I appreciate my analogy is not 1:1 - whether this is the principal vs a fee of equal size, staking is not necessarily a deposit, etc. - but in broad terms, that’s the model on which I am making this appeal.

10

We can play analogies for a very long time, given that your analogies are mostly related to the fiat world, which is built on completely different basic principles than cryptospace in my opinion. But I think this is more of a waste of time.

I looked through all your posts again, and never found a place where you actually take responsibility for your mistake, not in the form of words, but in the form of material responsibility. In my opinion that is the basic thing here. You made a mistake and are just looking for a way out of the situation without any material loss to yourself.

Forgive me for saying this directly and not very politely and without much text where I apologise for telling the truth.