Stargate Finance (STG) to Reissue All Tokens Following FTX Hack
Cross-chain bridge protocol Stargate Finance has announced plans to reissue all STG tokens in response to the FTX hack and its ties with Alameda Research, leading to a significant surge in STG’s price.
According to a proposal posted early on February 2, Stargate Finance (STG) will reissue all STG tokens to mitigate the negative impacts resulting from the November 2022 FTX attack.
Stargate Finance, a cross-chain bridging protocol built on the LayerZero platform, had a Total Value Locked (TVL) of over $382 million at the time of this update. The project made headlines in March 2022 when it launched the STG token sale to the community.
However, the sale ended abruptly with the revelation that Alameda Research had purchased the entire 100 million STG tokens (10% of the total supply) available for sale. The CEO of Alameda Research at the time, Sam Trabucco, made the memorable comment:
There's been some chatter about the recent @StargateFinance auction, and I wanted to clarify a few things about Alameda's involvement.
— Sam Trabucco (@AlamedaTrabucco) March 22, 2022
“We indeed bought up the entire allocation.”
Alameda had committed to locking the entire amount of tokens until March 2025, but it was later accused of using its 10% allocation to farm STG, causing the token’s price to plummet.
In November 2022, the collapse of FTX also brought down Alameda Research. Following the exchange’s bankruptcy declaration, a mysterious hack occurred, perpetrated by an unidentified individual, causing approximately $400 million in user losses and raising serious security concerns for FTX and Alameda.
Read More: U.S. Department of Justice Investigates FTX Hack
The Stargate Finance proposal acknowledges the risk that malicious actors could gain control of Alameda’s STG tokens and use them to harm the protocol and its community.
To address this, Stargate Finance will reissue all STG tokens, replacing the old smart contract with a new one and conducting a 1:1 airdrop of the new tokens to current STG holders. The snapshot for the airdrop will be taken on March 15, 2023.
For clarity on the discussion post in the forums -- as writtenhttps://t.co/OTWv19dbmu
— Stargate (@StargateFinance) February 1, 2023
The tokens from the initial launch auction are in a contract where the keys of the intended owner have likely been compromised by a malicious party
In the 24 hours leading up to the snapshot, Stargate will instruct exchanges to halt STG deposits and withdrawals and will also suspend liquidity pools managed by the protocol.
After the airdrop, all STG farming contracts will distribute rewards in the new tokens, and users will need to deposit the new tokens to continue farming. Tokens that were previously locked as veSTG and aaSTG will receive the new tokens upon unlocking, with no changes to the lock period or voting rights.
The 100 million new STG tokens representing Alameda Research’s investment will be locked in a separate wallet to protect them from being considered part of bankruptcy assets according to U.S. court rulings.
Following the announcement of the reissue proposal, STG’s price surged over 30% in the past 24 hours.
1-Hour Chart of STG/USDT on Binance as of 10:00 AM February 2, 2023
