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Stargate Foundation Recommends Against Reissuing STG Tokens

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Stargate Foundation Recommends Against Reissuing STG Tokens

On March 13, Stargate, a cross-chain liquidity agreement based on LayerZero, tweeted that the Stargate Foundation recommended DAO not to reissue STG tokens. After the bankruptcy of FTX last year, the FTX/Alameda wallet suffered from key leakage or internal problems, and was attacked by hackers and lost about $500 million. The FTX liquidator will eventually transfer all assets to the new wallet, and the key will not be leaked to hackers. Stargate DAO believes that the key of the wallet is likely to be leaked and shared between FTX liquidator/Alameda and hackers, and proposes to reissue STG tokens to transfer these funds out of the wallet.

The Stargate Foundation advised the DAO not to reissue STG tokens, and the FTX liquidator may seek compensation

Analysis based on this information:


Stargate, a cross-chain liquidity agreement based on LayerZero, recently made a tweet recommending that DAO not reissue STG tokens. This recommendation was made in light of the bankruptcy of FTX last year, which saw the FTX/Alameda wallet suffer from key leakage or internal problems. Consequently, hackers were able to breach the system and steal approximately $500 million.

The tweet suggests that Stargate DAO (Decentralized Autonomous Organizations) considers it risky for the key of the wallet to be leaked and shared between FTX liquidator/Alameda and hackers. Consequently, they have proposed a solution in which they would reissue STG tokens to transfer the funds out of the wallet safely.

The key issue in this scenario is the safety of the assets in the wallet. After the FTX liquidator takes over, they intend to transfer all assets to a new wallet. However, Stargate DAO is concerned that the key to this new wallet may still be leaked to hackers or shared between Alameda and hackers. Therefore, the DAO group recommends against reissuing STG tokens as a way to safely transfer the assets out of the wallet.

Reissuing STG tokens should be seen as a last resort, as it can have serious implications both financially and for the reputation of the project. Reissuing tokens reduces the value of the token and implicates the integrity of the project. It can also cause panic among investors, leading to a volatile market. Therefore, it is crucial to find alternative solutions to manage the safety of assets in the wallet.

In conclusion, Stargate Foundation recommending against reissuing STG tokens is a wise move, as it promotes safety and considers the financial and reputational implications of such a decision. It is essential to find alternative solutions to safeguard the funds and avoid incidents like the FTX hack in the future. DAO satisfaction is a crucial benchmark for any project, and Stargate must prioritize their safety over anything else.

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