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Stargate DAO Recommends Against Reissuing STG Tokens

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Stargate DAO 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 tweeted that the Stargate Foundation recommended against reissuing its STG tokens. This decision is based on the belief that the key to the FTX/Alameda wallet is vulnerable to being leaked and shared between FTX liquidator/Alameda and hackers.

Last year, the FTX exchange suffered from key leakage or internal problems, resulting in an attack by hackers that led to a loss of about $500 million. The liquidator of the exchange is expected to transfer all assets to a new wallet, with the assurance that the key will be kept secure to prevent further hacking incidents.

However, Stargate DAO is skeptical about the safety of the new wallet and believes that there is a likelihood of the key being leaked to hackers or even shared with FTX liquidator/Alameda. As a result, the DAO advocates for reissuing STG tokens to transfer these funds safely out of the wallet and avoid any potential loss.

It is important to note that the decision to reissue tokens has pros and cons. On the one hand, it could prevent potential losses and ensure the security of funds. On the other hand, it could create confusion among existing investors and lead to a loss in trust. Furthermore, it is unclear whether a token reissuance would be legally permissible.

Overall, Stargate DAO’s decision not to reissue tokens is a cautious move that prioritizes the safety and security of its investors. It remains to be seen whether this choice will have negative consequences or whether it will prove to be the right decision in the long run.

In summary, the Stargate DAO has advised against the reissue of STG tokens, citing concerns about the safety of the FTX/Alameda wallet key. This move is a cautious approach aimed at ensuring the safety and protection of investors’ funds. However, it raises questions about the legality and consequences of token reissuance.

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