I would like to express my sincere gratitude to the Interlay team for their guidance and support throughout the proposal process. Special thanks to Alexei, Gregory Hill, and Dom Harz for their valuable assistance, which has enabled me to proceed with a legitimate fund recovery application.
Proposal Summary:
This proposal addresses two main points:
A public denial of involvement in the malicious Referenda #143, which is a governance attack exploiting my liquidation incident.
A formal request to recover the unfairly liquidated vDOT (or equivalent value in USDT) from the reserve account due to incorrect oracle pricing on April 13.
Part 1: Statement on Referenda #143
Referenda #143 was not initiated by me. It is a governance attack where someone maliciously used my liquidation situation to propose minting unbacked iBTC and extracting additional funds for their own benefit.
I have already voted NAY on this proposal and have urged my friends and supporters to do the same. The attacker’s proposal must be rejected to protect the integrity of Interlay’s governance and treasury.
Part 2: Request for Compensation for Unfair Liquidation
Discussion thread link:https://interlay.subsquare.io/posts/66
On April 13, the Hyperbridge hack caused a sudden drop in vDOT price on Ethereum, but vDOT price in the Polkadot ecosystem remained unaffected.
The oracle used by Interlay at that time did not pull the correct price from Bifrost, which led to the unfair liquidation of my vDOT collateral, even though my loan health rate was around 47% and should not have been liquidated.
On-chain evidence shows that:
My liquidated vDOT was swapped into USDT and sent to the lending pool:
wd9yNSwR5jsJWJZ6yzpWRRhe59Z8xLQvZpxrPF7ux76mKaBZ6
Liquidation transaction hashes:
0xdb7c9221e092b56de56783309bd876ecc038ec53e95353e5551ef732d5184245
0xfc84969e041e11ce7d569741b7fd6e1b6b1073bed0f2a085388ffe00631e4aa5
Liquidation details:
Collateral provided: ~4,257 vDOT
Borrowed amount: ~4,000 USDT
vDOT price at the time (Polkadot ecosystem): ~$2
Total collateral value: ~$8,500
Compensation requested: 4,500 USDT (Funds are sourced from the reserve account)
Why This Should Be Approved:
This was not a market liquidation but an oracle failure.
This is a clear case of protocol-oracle misalignment——Thomas from the Bifrost team has confirmed the issue, while the same problem did not occur on Hydration.
The amount is verifiable on-chain and does not inflate the treasury.
User protection is essential for trust in DeFi. Too many tragedies have occurred this month—we should not let users down again.
Proposal Action:
Refund from the reserve account to my address:wdCqxq8RoyA9eW7AMcWxm11CMqcr3avEXj8V661VnUZpoG1kb