Have to agree with Barry here. This kind of thing unfortunately happens quite often on Ethereum, and when it does that value is usually irretrievably extracted by MEV bots. Sometimes, someone in the affected user’s shoes can find recourse with the flashbots community or by messaging the searcher on chain, but recovery in these instances is rare.
In this case, it’s clear that the arb opportunity went to Protorev, and given that’s clear I do think it’s appropriate for Fig and the affected user to be raising this question with Osmosis governance (I’m sure any of us would do the same).
This is obviously a really unfortunate situation, and I feel for all parties involved here, but there are broader governance policy considerations at play for Osmosis in this decision. As @JohnnyWyles mentioned, a proposal will shortly be going on chain to decide the disposition of collected protorev funds.
Regardless of whether or not that proposal passes, at some point those funds will have a concrete purpose, after which requests like these will no longer be technically feasible. The only reason that this proposal is even possible now is because governance has still not decided, as a matter of policy, what will be done with the protocol revenue collected by the module.
That being the case, I think that governance should treat this case as it would if the disposition of protocol revenue had already been decided. Because choosing to refund this user would set a precedent that could not be adhered to in the future, I personally think this proposal should be voted down. As @bpiv400 mentioned, if Osmosis decides to refund this user, we should do so as a matter of a policy by which protorev funds are allocated to traders that suffer from arbitrage. Imo this is a discussion that should happen in a separate forum and not here.
It seems to be a UI issue and the front-end involved here is from dYdX, not Osmosis. This unfortunate event isn’t related to the Osmosis front end
I don’t believe we should reimburse users because they suffered from a high price impact. Imagine having to reimburse everyone who suffered from price impact at some point. What limit should we set to reimburse a user? I think this would set a bad precedent for the future.
I am very sorry for the user, but it shouldn’t be Osmosis role to reimburse for an issue on the dYdX front-end
Maybe the burn proposal waits until after this swap proposal is concluded? Depending on the direction it takes, the burn proposal may need to be revisited.
At some point we can’t hand hold or post enough warnings when it comes to users making careless transactions as indicated here.
At the end of the day nobody held the user at gunpoint or showed them faulty returns. If the user simply paid attention to the more than half a million dollar transaction they performed this would never happen.
You can use the excuse of “This would never happen on eth” but again if you’re moving from the most liquid eco in eth at SOME point we have to put some kind of responsibility on the user.
It the developers from DYDX / Squid would like to refund the funds by all means they should do so, however this shouldn’t be Osmosis’ responsibility.
Yes: big improvement in a user’s life, who has been presented with deficient UX. Osmosis still gets 20% bounty for Protorev. User is still punished a significant amount of money for their mistake, but stays in the ecosystem.
No: tokens are burned and the only benefit is a small reduction in the circulating supply. The user is severely set back financially. No precedent is set.
Actually, a precedent of personal accountability and responsibility would be set. It’s a no with veto for me too.
You were using dYdX and the Squid router, your chosen platform was dYdX. Had you been using the Osmosis front end, you would have received a price impact protection error. I know this because I get it all the time.
Squid and dYdX are who you should be seeking to resolve this with, not the Osmosis community.
Additionally, for a transaction that size, you should have at the very least ensured to confirm amount to be received. You don’t remember whether you did or didn’t which means you were not paying attention, and that should not become a community problem.
I have personally helped more than a handful of people find out what happened in situations exactly like this, only with much less value involved. (although still not just peanuts for sure)
I think the users do have a responsibility to be aware of what they are doing and do test swaps or sends etc, whatever other “best practices” are reasonable in any given situation. This is afterall defi and not by any means an established well known sector that is polished on all sides.
HOWEVER, the frequency with which this has been happening [and after doing my own testing, realizing the clear lack of warnings or hold-points at any part of the process] makes me a little more sympathetic to the side of the users here.
If one person does something incredibly stupid and harms themselves, most would assume that person is not very smart, or careless.
If many people do the same incredibly stupid thing, it might be an indication that the platform or process needs a serious overhaul.
100% agree, except for the fact this is not an Osmosis user who was transacting on Osmosis. The UI in question is that of dYdX.
As such, this should be brought up where the user chose to transact.
Fwiw, I am a user as well and my opinions come from the POV of a user.
Had this trade been one done via Osmosis, the swap would have been blocked and he would have received a price impact protection error.
I’m sympathetic to the user too btw, but I value accountability more especially where large values of funds are involved; and given the fact he wasn’t even using Osmosis.
He was using an API that relies on smart contracts that live on Osmosis, which were created specifically for this purpose and which were given explicit approval by Osmosis governance. All of them were.
I’m undecided on whether it should be refunded, at what amount, or if there should be some cutoff or any other stipulations considered.
However it is a no brainer that these teams need to get serious and start taking responsibility or lay down some very very clear warnings for anyone using their platforms to let them know they may very well lose 50% or more of their funds by using that service.
This will be my final comment on this topic. He should have verified what he was getting in any case. These are the basics of literally any exchange, even if we want to go as far back as barter trade.
To be fair, Osmosis only whitelisted the addresses of the team. Governance never gave explicit approval of that specific contract, which is irrelevant imo.
Question is, should ProtoRev revenue be given to users? The answer from the community has been No, with the most likely outcome for that revenue to burn those tokens.
I feel compelled to respond to Barry’s comment at Skip, finding it particularly ironic. Recently, I experienced a similar loss, albeit a smaller amount ($600). The distinction lies in the fact that my loss resulted from a routing error facilitated by Skip Protocol through the Keplr Wallet frontend. There were no warning indicators, and the swap details appeared correct. Despite notifying Barry and the Skip Protocol team, they fully acknowledged the error in their routing, which led to my fund loss. However, despite this admission, they declined any form of compensation, even a partial amount. While I understand the policy against refunding trades, there should be consideration for special circumstances. It seems that if I were a prominent influencer or held significance in the industry, an exception might have been made.
Cross chain routing is in its infancy. Squid is young project and huge value driver to Osmosis and key distribution channel for Osmosis liquidity to Ethereum users.
I don’t think Osmosis or Cosmos in general should operate in a way that doesn’t take reasonable measures to undo user harm.
The opportunity in front of Osmosis is so large (cross-chain DEX better than a CEX) that revenue forgone now will pale in comparison to revenue if the vision plays out. Every decision on made by the DAO should be viewed through this lense, and try to make it more likely to happen.
A better user experience is making it harder to make stupid mistakes / minimising losses if it does happen. Users / protocols will prefer Osmosis over other options making the vision more likely. Protorev should go back to the user.
Barry’s suggestion is a rational way to resolve the posters issue.
Agreed. Also it’s a shitty feeling to make a high slippage swap and then the built-in protocol module backruns you and takes the money. In general I would be supportive of a portion of protorev profits being paid back to the swapper that induced it (not all).
I’m in favor of the refund. We have a chance of doing something unique to correct this big mistake. Saying ‘no’ sounds more of a creedy and faceless web2 stance. Let’s show the power of true crypto community.
Proposed 20% haircut is still a lot of money, so it should sting enough to be a good lesson.
This of course should be considered one time deal.
Proof of Skip Protocol actually admitting fault for me losing my funds in a similar fashion as the person in this thread. Yet, completely denying me any kind of compensation what so ever. It’s great they fixed the issue, that doesn’t give my money back. This behavior is absolutely disgusting in the crypto space and shouldn’t be tolerated any longer. He could have just done the right thing and compensated me for their admitted mistake.
money back the UI as of lately has been sub pair…