During the launch on Songbird, we encountered an error with PSB contracts. Here are the findings, how the error is being handled, and how it affects you.
Shortly after the launch of the Songbird-native DEX and token, we learned that there was an issue with minting the full supply of the token. Immediately the team went into action and have been working around the clock to address the issue. We’re taking action now to create an equitable solution and keep users’ funds safe.
On 12th of September 2022 at 1500 PM UTC we added liquidity for PSB-SGB, allowing for our coin to be traded. This triggered a price to set on chain at $0.01 USD. At 17:25PM UTC, beta contracts were merged to the main app, and we announced the DEX went live. Emissions were scheduled to start shortly after. At 17:52 PM UTC, there was a problem minting the full supply of the token. The remaining 96% of tokens that weren’t preminted for liquidity and the airdrop were locked in contracts forever.
We quickly met as a team and started identifying solutions. The first was to keep the total supply at 9.2 million PSB (i.e preminted 4%) and use everything outside of the airdrop balance as LP rewards. This was a viable option, and technically the simplest one to perform. It was quickly abandoned since it would go against our Litepaper which was approved by our legal counsel and had major changes to our tokenomics.
The next proposed solution was a 1:1 swap of newly minted PSB tokens and the original PSB token. After discussions about the length of time it would take to build a user interface for the claim, we decided as a team it would not be a fast enough solution for community members.
The planned solution
After discussing viable options, as a group the fastest and fairest solution was to refund SGB to holders to at minimum cover the value of their PSB. Here is the amount for users:
3x the value of PSB they held at snapshot in SGB to make up for any impermanent loss accrued
PSB holders and single-sided stakers
1.5x the value of PSB held/staked at snapshot in $SGB to compensate for any inconveniences
With this solution, even if an LP lost all the SGB from their LP pair, they should profit or break even.
To accomplish this, we needed:
- DEX contracts to be redeployed
- An airdrop snapshot to be taken
- A new treasury vester contract to be prepared
- Communications to be made in the fastest way possible
The first thing Pangolin did as a team was pledge to return any profits made and commit to further audits within the team to disclose investments in PSB.
Next was to do all of this without setting off any alarms so users couldn’t actively benefit from these mistakes. We’ve kept all communications about the minting error within a circle of key dao members and have worked nonstop for almost 24hrs to create new contracts and communications.
We hope the ramifications of this incident are properly covered, and no-one is unfairly affected. We know that this experience will make us as a team and a product more resilient and thorough for years to come.