ARMOR FINANCE

DESCRIPTION OF EVENTS

"Armor is a decentralized brokerage for cover underwritten by Nexus Mutual's blockchain-based insurance alternative." "Armor is a smart cover aggregator for DeFi which provides Pay as You Go coverage for user funds across various protocols." "Protect your investments against smart contract risks across popular protocols such as Uniswap, Sushiswap, AAVE, Maker, Compound, Curve, Synthetix, Yearn, RenVM, Balancer and more." "Armor insurance is underwritten by Nexus Mutual, with added features: Permissionless (No sign-up required), Pay as you go coverage across various protocolsFlexible amount/ duration coverage, only pay what you owe."

"Where there is no regulation, reputation is key, and we were too quick to judge the events based on previous stories involving certain characters."

"I am certainly not happy with how Armor has handled the situation. I think it is totally unacceptable that the CEO of Armor would make statements in order to induce people to stake valuable assets, promising us that we get to keep the benefits of the cover NFTs and could withdraw and claim at any time during this phase of the project. I deposited my cover NFTs relying on this information. All of a sudden after my cover NFT became very valuable, they suddenly decided that the CEO's words don't have any effect."

"If the CEO's words don't have any effect, and they can secretly upgrade the staking contract to allow the admin to transfer my NFT out to his personal wallet (this actually happened), and the documentation doesn't reflect the working system but they decide they will selectively enforce a few phrases in their favor that are never presented during the staking process… Well, I don't know how you could describe this as anything other than a scam."

"They stole $1.6 million belonging to me."

"[T]here is on-chain evidence that Armor stole the insurance NFT from kferrret before restaking it using their own contracts and submitting the claim for themselves."

According to Azeem from Armor, "He claimed to rely on my ambiguous (and definitely not meaning what he wants it to mean) messages in discord, when in fact he staked a day before the messages he claimed to rely on. Completely discredits his claims."

"We have stood firm against a social media storm that would have taken weaker people down. Surely that shows character and should instill confidence in the team behind Armor."

"It's not about morality. The system is designed specifically to prevent his kind of actions and he knows it, so he tried to create a social media storm to pressure us into breaking protocol. You are missing a key point. He claims to have relied on ambiguous statements before he staked, when in fact he staked a day before the statements. This discredits his entire argument as he did not in fact rely on those statements at all for staking. When staked the coverage is assigned to Armor. This is made clear in the documentation. If you want to retain coverage then don't stake. There are several other NFTs who were not staked and successfully claimed with no issue."

"We are not far from the old world where one should always make sure to read the fine print before taking out an insurance policy..."

Armor Finance offers insurance for smart contracts, however there was a dispute over whether the policy applied to staked assets. The affected user understood one thing, and was not covered when they expected they were. The payout of $1.6m remained with the Armor Finance team.

HOW COULD THIS HAVE BEEN PREVENTED?

These types of exploits can be avoided by not storing funds in smart contract hot wallets. In our industry-based insurance model, all claims have the opportunity to be covered through a vote of 3 members. Where assets are lost due to a hack, they would generally be covered.

Check Our Framework For Safe Secure Exchange Platforms

Rekt - Under the Armor (Sep 28)
Rekt - Armor - rekt (Sep 28)
armor.fi official response - Pastebin.com (Oct 19)
@kferretcrypto Twitter (Oct 20)
Armor.fi Living Documentation - Armor (Nov 7)
Armor.Fi Reviews and Pricing 2021 (Nov 8)

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