Via Protocol Grant Misuse

Accountability 🗂️ Grant Misuse Reports
1

Accusation:

Tokens were transferred to the personal wallet without any permission from Optimism and used as collateral for trading.

Link - [GF: Phase 1 Proposal] Via Protocol

Total Amounts:

Total token involved: 250,000 OP from Token House Grant - [GF: Phase 1 Proposal] Via Protocol
Total grant amount misused: 95,000.00 OP transferred from the miltisig to unknown wallet (TX 12 OCT 2023) OP Mainnet Transaction Hash (Txhash) Details | Optimism

Breakdown of misused tokens:

After the withdrawal, they were used as collateral on Sonne to trade ETH.

There are too many transactions so you can see all the manipulations with OP -

Summary:

Via Protocol received a Grant from the Token House (The following text was taken from this post Analysis Report: Via Protocol Phase 1 Grant Proposal)

The tokens were originally secured in the Via Safe Multi-Sig Wallet at address 0xeC93157084dcE64F7E4c0F0EDF383114b5C805aA 1. This wallet employs a 2-threshold security measure, with two designated addresses assigned specific roles:

L2 Recipient Address (0x1A27cdf069F2E8cc5b77b72BeA43851086aF5D83 1): This address serves as the primary recipient of the 100,000 OP tokens.

Owner-2 Address (0x67E785af25156A1dcDB4920e0Cb72d22204F096A):

Additionally, two other addresses are significant in this context:

Airdrop Contract Creator (0xA256661Ca438e102Ec27ac49FA107308D7F992bF)

Airdrop Contract (0x41bC6b41Fb617220263871B9F7c4ba35F9A45417)

A chronological overview of key transactions involving the granted OP tokens is as follows:

March 18, 2023:

250,000 OP tokens were transferred to the L2 recipient address.

March 18, 2023:

These 250,000 OP tokens were transferred 1 into the Safe Multi-Sig Wallet.

March 29, 2023:

A transaction of 150,000 OP tokens was initiated, directing them back to the Optimism Foundation.

May 5, 2023:

3310 OP tokens were transferred 2 to Owner-2.

May 25, 2023:

1000 OP tokens were transferred to Airdrop Contract

3310 OP tokens were transferred 1 to Airdrop Contract.

October 12, 2023:

94,690 OP tokens were transferred to the Unknown wallet

Involved Parties:

To avoid accusing the innocent ex-workers, there will be some annotation of how Via collapsed. All co-founders and employees left the project, and here is proof that the CEO is the only person involved in this. - Telegram: Contact @serafimcloud

“6. К сожалению разошелся с кофаундерами, как с Даней, так и позже с Максом и Ерой. Но это отличный опыт.”

Which can be translated as “Unfortunately, all co-founders left the project. Dan (CTO) was the first. After that, Max and Era. But still, it was a great experience” - December 23, 2023.

Here is a message from Alpha_Omega_Cat from August that Dan and Alpha left the project - [GF: Phase 1 Proposal] Via Protocol - #12 by Alpha_Omega_Cat

The project multi-sig owner is still a serafim.eth, mainnet with ENS.

Telegram channel - https://t.me/serafimcloud

Twitter/X - https://twitter.com/SerafimCloud

Instagram - Serafim Korablev (@serafimcloud) • Instagram photos and videos

Timeline of events:

Time: October 12, 2023:

Description: 94,690 OP tokens were transferred to the Unknown wallet

Transaction: OP Mainnet Transaction Hash (Txhash) Details | Optimism

Supplemental Evidence:

January 2, 2024:

Alpha_Omega_Cat reported that funds were stolen from the multisig - Analysis Report: Via Protocol Phase 1 Grant Proposal - #2 by Alpha_Omega_Cat

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5 Likes
4

There is nothing personal.

Facts:
The project will be sold to another party after one grant misuse without any allowance from the OP team. Additionally, Via scammed people with an Ally wallet for a couple of tens of thousands.

Here are two posts where we can see how Via tried to convince people to mint NFT.

But after the mint, they deleted the profile and moved assets to the same wallet that you can see as an Unknown wallet - DeBank | The Web3 Messenger & Best Web3 Portfolio Tracker

Here is their website - https://myally.xyz/

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Yup, about my post on my channel. I made it to save VCs money on a project with such a story.

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In this screenshot, you can also see his comment about me as a person and his state that this was coordinated with OP.

“Эти транзы согласованы и лежат на соседнем кошельке.” - which can be translated - “These transactions are reported and approved (by who?) and are on a different wallet (original wallet).”

“ПС. Новые овнеры виа тоже согласованы с гаверненсом и теми людьми с кем ты типо общался.” It can also be translated as “PS. The new Via’s owners are also accepted by the Governance and the people you’ve been talking to” (Vonnie, Palash and Katie, where Katie told me that this is a case for the Foundation)

This story could not be added to the report because it is about a different project. But it is connected to the serafim.eth wallet, so it is best to add it in the comments.

Here is his wallet on zksync with the major part of earnings from the scam NFT sale - zkSync Era Block Explorer

6

@serafim & @Serafim2

As this is the first Grant Misuse Report I will give you some leeway. The Grant Misuse Reporting Process has very strict and explicit rules about addressing the reporter. Please address the claims directly - not the reporter. The onchain evidence is what you should be defending/explaining.

Protection for Involved Parties

Reporters

[…]
Should the accused reach out to the Reporter directly, the accused will immediately be in violation of the Rules of Engagement (see Intimidation) and will result in their suspension from all Optimism platforms. This will happen regardless of if the accused has responded to the report yet.
[…]
Note that the accused may not attack or even address the reporter, and are ONLY allowed to respond to the evidence provided. Accused may ONLY refer the the reporter as “the Reporter”.

Please update your replies as soon as possible to remove your accusations against the reporter (as these are direct violations of the rules, and are not relevant to the report), or these posts will be edited for you.

Additionally, to clarify, doing anything with OP from a Grant that was not EXPLICITLY outlined in the original Grant is a misuse of the Grant.

2 Likes
7

Thank you for the clarification. I will edit my posts once it is possible, but now this thread is in slow mod and I can’t do it.

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8

Thank you.

  1. Regarding the use of OP tokens: I acknowledge that the decision to use a portion of the OP tokens as collateral on Sonne to generate yield was made with the intent to increase available funds for refunding gas fees to Optimism users. This decision was made without the intention of violating the initial grant conditions. All proceeds were transferred back to the multisig wallet.

  2. Concerning the project sale and the use of the Ally wallet: The consideration to sell the project was viewed as an opportunity to preserve and further develop it. All communications regarding this matter were transparent and coordinated with community members. Palash and Kellen were informed that we want to sell the company, and they provided us with instructions on what to do next. The Ally project was unrelated to the OP grant conditions. Any actions within this project were conducted separately from the grant funds and on different blockchains.

Furthermore, I understand that the transfer to Sonne was a misuse of the grant, but I believe it constitutes a minor violation, given that we had good intentions and did not alter the grant usage plans.

I also want to highlight that accusations against other projects and personal actions not directly related to the use of OP grant funds should not be considered in this discussion. This could violate the anonymity and objectivity-oriented process established for addressing grant misuse cases.

In conclusion, I am open to further dialogue and ready to provide any additional evidence and explanations necessary to resolve this issue. My goal is to uphold principles of transparency and accountability to the Optimism community.

9

@vonnie610
Unfortunately, I had to delete the old posts because I didn’t have the opportunity to edit them.

If you could also ask the reporter to follow the discussion rules and remove everything that is not related to this grant and project, I would be grateful.

1 Like
10
  1. Twitter account is not a domain service.
  2. OP use. The portion of the generated yield has not left the wallet on which the yield was generated. The generated yield was earned at the risk of losing 95k OP.
  3. There have been 0 announcements on Twitter since November, and a Discord server is full of “Rug” messages.
    Discord - Via Protocol
  4. If the grant was in use, why were there no announcements or updates on eligibility for users to claim a gas refund?
  5. So why did Via hold it if it was useless for its users?
  6. Does this make the project’s selling price higher because of the grant?

This is unrelated to OP, but it helps understand the whole situation.

  1. If Ally is a failed project, why are raised funds still on related to serafim.eth wallet and not sent back to users/available to claim a refund?
  2. After all the rugs and closures, serafim.eth TG channel closed all comments and limited all reactions + made some edits to his old posts because of the hate.

Unfortunately, as it was mentioned, “doing anything with OP from a Grant that was not EXPLICITLY outlined in the original Grant is a misuse of the Grant.”

11

@vonnie610 could you please ask the reporter to follow the discussion rules and remove everything that is not related to this grant and project. In the last message nothing related to transactions or the grant.

12

@Alpha_Omega_Cat The update of eligibility goes automatically every first date of the month and is available to claim on the dapp, as we committed on the start.

Everything else is not related to the grant and the discussion. Please follow the discussion rules.

13

@Alpha_Omega_Cat please remove your comments that are not directly related to the report. The “Ally” comments are by your own words unrelated. Lets keep this discussion on topic and scoped to what you have brought up in the report.

@serafim / @Serafim2 please do not use your two accounts to sidestep the slowmode.

14

Half of the first one and the last one, right?

I do not fully agree with you since this can help reviewers understand the situation, but okay, I will delete those parts.

15

Having reviewed the discussion in this thread and examined the allegations, I am submitting this report in my capacity as a numbaNERD.

2 Likes
16

So, basically, to avoid a severe violation of the “no selling rule,” I can use the granted OPs as collateral for trading and only get Minor violations, right?

Like: “I am not selling; it is just collateral, and you don’t have any rules about collateral.”

But what if I use OP on Sonne and then go to Dydx and go long on YFI? Is it still a Minor Violation, or is it x2 high-risk strategy that can result in a total loss of granted OPs?
Should all projects then deposit their grants into Exactly to boost their TVL? (and most likely lose all OPs because of the risk of a hack)

17

I am a NumbaNERD and this is a verification report of the Via Grant Misuse Report.

1 Like
18

Thanks for the feedback.

Every misuse can be interpreted separately while following the broader rules set in the Process. This misuse can qualify as a “severe violation” but digging further into where the OP stands, how the response was and considering that these violations are to be a public repo with little direct consequence my analysis weighed more towards considering it as a “minor violation”.

The scenario described might require a detailed analysis based on various factors, I would refrain from bundling them into “minor violations”.

This is the first report in the new process so I’ll let it be interpreted with a different lens until we have real objective ways to classify.

I believe with a 2/3 majority it will most likely end up in “severe violation” but would like you to allow liberty of individual assessment.

P.S.- If the interpretation needs to be hard lines among all the types of violation, I’ll make the necessary changes @vonnie610

2 Likes
19

@Chain_L I am curious why you clasified it as a “Minor Voilation” and not a “No Sale Violation”?

20

I understand there is a “No Sale Violation” but considering that the owner has responded promptly and clarified the intention not to take the funds for building or divert elsewhere.

@serafim could have chosen not to respond if there was mal intention.

Also, the grant use guidelines were not clear earlier. If it had been, I believe from the response that this misuse might not have occurred.

So, I have weighed in that the tokens are still visible on-chain and the misuse is more of not distributing in time which many grantees have done.

But again, if there is no subjective space here & we are to act on a mistake done once is enough to qualify as a “Severe Violation”, I can edit the report.

Thank you.

21

As one of NumbaNERDs, I can verify the claimed accusation valid in this grant misuse report based on evidences I found. You can find the full verification report here:

Evidence

  1. Is the amount in question reaching the required minimums? (see report Criteria)
    :white_check_mark:Yes. Reported misused amount of tokens is 95K OP (>50k OP or $50k).

  2. Does the evidence support the claim? Is there enough onchain data to back up the claim?
    :white_check_mark:Yes. The claimed misuse transaction and the transaction to return OP tokens can be verified on chain.

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    Additional evidence comes from the acknowledgement of misuse from CEO of Via protocol @serafim:

    • “I acknowledge that the decision to use a portion of the OP tokens as collateral on Sonne to generate yield was made with the intent to increase available funds for refunding gas fees to Optimism users. This decision was made without the intention of violating the initial grant conditions. All proceeds were transferred back to the multisig wallet.”

Conclusion

Based on the scope of misuse defined Grant Misuse Reporting Process, the verified accusation shall fall into the following category:

  • Breaking Commitments: Using tokens differently from Commitments is against the grant policies.
    • Severe violations: Using tokens for actions well outside of the scope of the associated Commitments. Actions that constitute “well outside the scope” are actions that were not defined in the Commitments, or are substantial and impactful deviations from the specified execution plan in the Commitments.

The verified accusation falls under the category of severe violation due to the unauthorized transfer of tokens for personal use and collateralization, breaching the commitment to use tokens as specified in the grant policies.

3 Likes
22

Seems like a happy ending considering the funds could have been lost in the Sonne attack last night

3 Likes
23

Yeah,
But loss for many on-chain users, very sad & painful.