OptiFi Accidental Shutdown Command - Revision history

Azoundria: 30 minutes. Reviewing and improving the wiki article wording. Integrated additional Twitter reactions. This article still needs more information and updates in the future.

2024-04-12T17:25:00Z

30 minutes. Reviewing and improving the wiki article wording. Integrated additional Twitter reactions. This article still needs more information and updates in the future.

← Older revision		Revision as of 11:25, 12 April 2024
Line 12:		Line 12:
	Utilizes portfolio margin and partial liquidation to enhance capital efficiency, and offers the first ever on-chain options AMM with delta-neutral strategy to ensure continuous liquidity across all financial instruments on OptiFi.		Utilizes portfolio margin and partial liquidation to enhance capital efficiency, and offers the first ever on-chain options AMM with delta-neutral strategy to ensure continuous liquidity across all financial instruments on OptiFi.

	Unlike typical margin requirements that set margins independent from each instrument, Portfolio Margin takes all instruments with the same underlying asset into account, and nets them against one another, creating lower margin requirements and offsets risks for the user."</blockquote>Programs (equivalent to smart contracts) on Solana can be designed to be updatable, which allows for new functionality to be added or security flaws to be corrected<ref name="halborn-10632" />.		Unlike typical margin requirements that set margins independent from each instrument, Portfolio Margin takes all instruments with the same underlying asset into account, and nets them against one another, creating lower margin requirements and offsets risks for the user."</blockquote>Programs (equivalent to smart contracts) on Solana can be designed to be updatable, which allows for new functionality to be added or security flaws to be corrected<ref name="halborn-10632" />.

	== The Reality ==		== The Reality ==
Line 51:		Line 51:
	\|August 29th, 2022 12:07:39 AM MDT		\|August 29th, 2022 12:07:39 AM MDT
	\|Smart Contract Close Operation		\|Smart Contract Close Operation
	\|~~The~~ transaction was performed which permanently shut down the OptiFi smart contract<ref name="solanaexplorer-10626" /><ref name=":3">[https://twitter.com/OptifiLabs/status/1564367468457365504 OptifiLabs - "Without fully understanding the impact, we used 'solana close program'" - Twitter] (Mar 30, 2023)</ref>. This command was run without knowing the full impact of what it would do<ref name=":3" />. The intended action was simply to close the "buffer account" to retrieve the balance it contained<ref name=":2" />. The developers did not realize that they would not be able to relaunch the smart contract.		\|A transaction was performed which permanently shut down the OptiFi smart contract<ref name="solanaexplorer-10626" /><ref name=":3">[https://twitter.com/OptifiLabs/status/1564367468457365504 OptifiLabs - "Without fully understanding the impact, we used 'solana close program'" - Twitter] (Mar 30, 2023)</ref>. This command was run without knowing the full impact of what it would do<ref name=":3" />. The intended action was simply to close the "buffer account" to retrieve the balance it contained<ref name=":2" />. The developers did not realize that they would not be able to relaunch the smart contract.
	\|-		\|-
	\|August 29th, 2022 3:40:00 PM MDT		\|August 29th, 2022 3:40:00 PM MDT
Line 59:		Line 59:
	\|August 29th, 2022 5:17:23 PM MDT		\|August 29th, 2022 5:17:23 PM MDT
	\|OptiFi Incident Report		\|OptiFi Incident Report
	\|OptiFi publishes their incident report to Medium<ref name=":7">[https://web.archive.org/web/20220829231723/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 29th, 2022 5:17:23 PM MDT] (Mar 29, 2023)</ref>. They "sincerely apologize for a program incident leading to the sudden closure of the OptiFi mainnet program"<ref name=":4">[https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium] (Mar 29, 2023)</ref>.		\|OptiFi publishes their incident report to Medium<ref name=":7">[https://web.archive.org/web/20220829231723/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 29th, 2022 5:17:23 PM MDT] (Mar 29, 2023)</ref>. They "sincerely apologize for a program incident leading to the sudden closure of the OptiFi mainnet program"<ref name=":4">[https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium] (Mar 29, 2023)</ref>. The original version states that the program closure incident cannot be recovered<ref name=":7">[https://web.archive.org/web/20220829231723/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 29th, 2022 5:17:23 PM MDT] (Mar 29, 2023)</ref>.
	\|-		\|-
	\|August 30th, 2022 5:08:59 AM MDT		\|August 30th, 2022 5:08:59 AM MDT
	\|OptiFi Revisions		\|OptiFi Revisions
	\|OptiFi's incident report has been revised<ref name=":7" /><ref name=":8">[https://web.archive.org/web/20220830110859/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 30th, 2022 5:08:59 AM MDT] (Jun 29, 2023)</ref>. The revised version adds a statement expressing sincere apologies for the incident. ~~The original version states that the~~ program ~~closure~~ incident ~~cannot be recovered~~, ~~while the revised version mentions that the closure incident resulted in the program being closed permanently and not recoverable at the time of writing~~. Both versions promise to compensate all users' funds, but the revised version adds that the settlement will be done manually according to Pyth oracle at a specific time. The revised version clarifies that the deployment process was aborted due to the deployment transaction taking longer than usual and mentions the amount of SOL transferred into a new buffer account. The original version states that the deployer did not understand the impact and risk of closing the program, while the revised version emphasizes that the program closure is irrecoverable and cannot be redeployed. The original version mentions the need for a rigorous deployment process and suggests adopting a peer-surveillance approach, while the revised version focuses on preventing reckless deployment and suggests adding warnings and double confirmation for closing a program. The revised version removes the proposals related to Solana officials and instead shares an open question to all devs and protocols about managing deployment risks and whether closed programs should be allowed to be recovered or redeployed. The revised version adds more clarity and emphasis on the irrecoverable nature of the program closure, includes compensation details, and removes some proposals while introducing an open ~~question~~ for discussion<ref name=":8">[https://web.archive.org/web/20220830110859/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 30th, 2022 5:08:59 AM MDT] (Jun 29, 2023)</ref>.		\|OptiFi's incident report has been revised<ref name=":7" /><ref name=":8">[https://web.archive.org/web/20220830110859/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 30th, 2022 5:08:59 AM MDT] (Jun 29, 2023)</ref>. The revised version adds a statement expressing sincere apologies for the incident<ref name=":8">[https://web.archive.org/web/20220830110859/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 30th, 2022 5:08:59 AM MDT] (Jun 29, 2023)</ref>. Both versions promise to compensate all users' funds, but the revised version adds that the settlement will be done manually according to Pyth oracle at a specific time<ref name=":8">[https://web.archive.org/web/20220830110859/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 30th, 2022 5:08:59 AM MDT] (Jun 29, 2023)</ref>. The revised version clarifies that the deployment process was aborted due to the deployment transaction taking longer than usual and mentions the amount of SOL transferred into a new buffer account<ref name=":8">[https://web.archive.org/web/20220830110859/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 30th, 2022 5:08:59 AM MDT] (Jun 29, 2023)</ref>. The original version states that the deployer did not understand the impact and risk of closing the program<ref name=":7" />, while the revised version emphasizes that the program closure is irrecoverable and cannot be redeployed<ref name=":8">[https://web.archive.org/web/20220830110859/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 30th, 2022 5:08:59 AM MDT] (Jun 29, 2023)</ref>. The original version mentions the need for a rigorous deployment process and suggests adopting a peer-surveillance approach<ref name=":7" />, while the revised version focuses on preventing reckless deployment and suggests adding warnings and double confirmation for closing a program<ref name=":8">[https://web.archive.org/web/20220830110859/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 30th, 2022 5:08:59 AM MDT] (Jun 29, 2023)</ref>. The revised version removes the proposals related to Solana officials and instead shares an open question to all devs and protocols about managing deployment risks and whether closed programs should be allowed to be recovered or redeployed<ref name=":8">[https://web.archive.org/web/20220830110859/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 30th, 2022 5:08:59 AM MDT] (Jun 29, 2023)</ref>. The revised version adds more clarity and emphasis on the irrecoverable nature of the program closure, includes compensation details, and removes some proposals while introducing open questions for discussion<ref name=":8">[https://web.archive.org/web/20220830110859/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium Archive August 30th, 2022 5:08:59 AM MDT] (Jun 29, 2023)</ref>.
	\|-		\|-
	\|August 30th, 2022 6:26:00 AM MDT		\|August 30th, 2022 6:26:00 AM MDT
	\|CoinDesk Article		\|CoinDesk Article
	\|CoinDesk releases an article on the situation, which references the original blog post<ref name="coindesk-10624" /><ref>[https://web.archive.org/web/20220830123316/https://www.coindesk.com/business/2022/08/30/solana-based-defi-protocol-optifi-loses-661k-in-programming-blunder/ Solana-Based DeFi Protocol OptiFi Loses $661K in Programming Blunder - CoinDesk Archive August 30th, 2022 6:33:16 AM MDT] (May 2, 2023)</ref>. The article states "OptiFi accidentally closed its mainnet platform in a programming blunder". The article reports the issue happened when the protocol accidentally closed its mainnet platform while attempting to update its program code, resulting in the permanent closure of the platform and the loss of $661,000 in user funds. The platform has pledged to reimburse all users' deposits and settle positions manually on Friday, although the estimated process time will be two weeks. This is one of the first cases where a programming error has resulted in the complete loss of customer assets in the DeFi space<ref name="coindesk-10624" />.		\|CoinDesk releases an article on the situation, which references the original blog post<ref name="coindesk-10624" /><ref>[https://web.archive.org/web/20220830123316/https://www.coindesk.com/business/2022/08/30/solana-based-defi-protocol-optifi-loses-661k-in-programming-blunder/ Solana-Based DeFi Protocol OptiFi Loses $661K in Programming Blunder - CoinDesk Archive August 30th, 2022 6:33:16 AM MDT] (May 2, 2023)</ref>. The article states "OptiFi accidentally closed its mainnet platform in a programming blunder"<ref name="coindesk-10624" />. The article reports the issue happened when the protocol accidentally closed its mainnet platform while attempting to update its program code, resulting in the permanent closure of the platform and the loss of $661,000 in user funds<ref name="coindesk-10624" />. The platform has pledged to reimburse all users' deposits and settle positions manually on Friday, although the estimated process time will be two weeks<ref name="coindesk-10624" />. This is one of the first cases where a programming error has resulted in the complete loss of customer assets in the DeFi space<ref name="coindesk-10624" />.
	\|-		\|-
	\|August 30th, 2022 7:25:00 AM MDT		\|August 30th, 2022 7:25:00 AM MDT
Line 75:		Line 75:
	\|September 1st, 2022 5:36:37 PM MDT		\|September 1st, 2022 5:36:37 PM MDT
	\|Reddit Comedy Show		\|Reddit Comedy Show
	\|The situation is shared on Reddit, where the community finds it very entertaining<ref name="reddit-10622" />.		\|The situation is shared on Reddit, where the community finds it very entertaining<ref name="reddit-10622" />. The situation was compared to a game of Russian roulette or hitting Alt + F4<ref name="reddit-10622" />. It was suggested that the developer was on vacation in Cancun or enjoying a day off after the mistake<ref name="reddit-10622" />. Fun was poked at the developer's mistake by referencing the "Leslie, I tried to make ramen in the coffee maker and I broke everything" meme<ref name="reddit-10622" />. The lack of testing and quality assurance was mocked by saying, "Who needs QA when you can just execute {DELETE}?" It was humorously suggested that the developer should have hired QA to keep the process in order<ref name="reddit-10622" />. The incident was compared to a "resume generating event" or a "Daisy chain" of mistakes<ref name="reddit-10622" />.
	\|-		\|-
	\|September 3rd, 2022		\|September 3rd, 2022
Line 177:		Line 177:

	Overall, the revised version added more clarity and emphasis on the irrecoverable nature of the program closure, includes compensation details, and removed some proposals while introducing an open question for discussion.		Overall, the revised version added more clarity and emphasis on the irrecoverable nature of the program closure, includes compensation details, and removed some proposals while introducing an open question for discussion.

			=== Reactions on Twitter ===
			Reactions on Twitter appeared to be largely constructive and supportive of the team<ref>[https://twitter.com/Nelis_sol/status/1564537148900085760 Nelis.sol - "Oh man, I feel for you guys. But thorough explanation of what happened, clear communication. You’ll get there. Wish you all the best. This is something that can happen to anyone, painful lesson but keep up the good work." - Twitter] (Accessed Apr 12, 2024)</ref><ref>[https://twitter.com/thejackheavy/status/1565329444369272834 thejackheavy - "have you reached out to circle for help with this? they could potentially blacklist those funds and re-issue" - Twitter] (Accessed Apr 12, 2024)</ref><ref>[https://twitter.com/Ooojin482/status/1564710371402735616 Ooojin482 - "Would indeed be good if the underlying Solana protocol or Anchor framework had some sort of a warning. I don’t believe that in a traditional blockchain, one can “close” a blockchain address and lose access to funds without losing a private key." - Twitter] (Accessed Apr 12, 2024)</ref><ref>[https://twitter.com/JPoolSolana/status/1565289505086644232 JPoolSolana - "sorry that happened to you, and kudoz for reimbursing your community" - Twitter] (Accessed Apr 12, 2024)</ref><ref>[https://twitter.com/TurnerNovakArt/status/1564534261830455297 TurnerNovakArt - "Good job owning mistakes and being accountable for them. Don’t see alot of negative replies shows community has your back if you have ours." - Twitter] (Accessed Apr 12, 2024)</ref>.<blockquote>"Oh man, I feel for you guys. But thorough explanation of what happened, clear communication. You’ll get there. Wish you all the best. This is something that can happen to anyone, painful lesson but keep up the good work."</blockquote><blockquote>have you reached out to circle for help with this? they could potentially blacklist those funds and re-issue</blockquote><blockquote>Would indeed be good if the underlying Solana protocol or Anchor framework had some sort of a warning. I don’t believe that in a traditional blockchain, one can “close” a blockchain address and lose access to funds without losing a private key.</blockquote><blockquote>sorry that happened to you, and kudoz for reimbursing your community</blockquote><blockquote>Good job owning mistakes and being accountable for them. Don’t see alot of negative replies shows community has your back if you have ours.</blockquote>However, there was some criticism of the project for having limited external adoption, as well as of smart contracts/blockchain in general.<ref>[https://twitter.com/hallam/status/1564636221694959622 Phillip Hallam-Baker - "It's not decentralized if a single mistake by one developer can brick the entire system. There is an old saying in AI, 'if you have to call something smart, it's because it isn't.' Smart contracts are stupid. Always were and always will be." - Twitter] (Accessed Apr 12, 2024)</ref><ref>[https://twitter.com/mwaddip/status/1565272748796043267 mwaddip - "So you had a team member prop up your TVL and only 5% was from actual users? Fitting..." - Twitter] (Accessed Apr 12, 2024)</ref><ref>[https://twitter.com/LongHairedLoser/status/1565852519443709952 LongHairedLoser - "Financial system of the future everybody..." - Twitter] (Accessed Apr 12, 2024)</ref><blockquote>It's not decentralized if a single mistake by one developer can brick the entire system. There is an old saying in AI, 'if you have to call something smart, it's because it isn't.' Smart contracts are stupid. Always were and always will be.</blockquote><blockquote>So you had a team member prop up your TVL and only 5% was from actual users? Fitting...</blockquote><blockquote>Financial system of the future everybody...</blockquote>

	=== Reactions on Reddit Community ===		=== Reactions on Reddit Community ===

Azoundria: Another 30 minutes complete. Additional sources merged in.

2023-10-10T21:58:17Z

Another 30 minutes complete. Additional sources merged in.

← Older revision		Revision as of 15:58, 10 October 2023
Line 26:		Line 26:

	== What Happened ==		== What Happened ==
	On August 29, 2022, an incident occurred with the OptiFi program on Solana mainnet, resulting in its closure and the locking of all user funds totaling 661K USDC<ref name="coindesk-10624" /><ref name="halborn-10632" /><ref name=":4" />. The incident was caused by mistakenly using the 'solana program close' command during an upgrade attempt<ref name=":4" />. The funds, including AMM vaults and user accounts, were not recoverable at the time<ref name=":4" />. The company says one of its developers was trying to update the program on the Solana blockchain and accidentally used a command that shut the ~~whole thing~~ down ~~irreversibly~~<ref name=":4" />.		On August 29, 2022, an incident occurred with the OptiFi program on Solana mainnet, resulting in its closure and the locking of all user funds totaling 661K USDC<ref name="coindesk-10624" /><ref name="halborn-10632" /><ref name=":4" />. The incident was caused by mistakenly using the 'solana program close' command during an upgrade attempt<ref name=":4" />. The funds, including AMM vaults and user accounts, were not recoverable at the time<ref name=":4" />. The company says one of its developers was trying to update the program on the Solana blockchain and accidentally used a command that permanently shut the smart contract down<ref name=":4" />.
	{\| class="wikitable"		{\| class="wikitable"
	\|+Key Event Timeline - OptiFi Accidental Shutdown Command		\|+Key Event Timeline - OptiFi Accidental Shutdown Command
Line 55:		Line 55:
	\|August 29th, 2022 3:40:00 PM MDT		\|August 29th, 2022 3:40:00 PM MDT
	\|OptiFi Twitter Post		\|OptiFi Twitter Post
	\|OptiFi posts on Twitter about the incident<ref name="optifilabstwitter-10627" /><ref name="optifilabstwitter-10628" />. (TBD - Check for other relevant posts on Twitter.)		\|OptiFi posts on Twitter about the incident<ref name="optifilabstwitter-10627" /><ref name="optifilabstwitter-10628" />. "We accidentally closed the OptiFi mainnet program and it's not recoverable." We will compensate for all users’ funds" (TBD - Check for other relevant posts on Twitter.)
	\|-		\|-
	\|August 29th, 2022 5:17:23 PM MDT		\|August 29th, 2022 5:17:23 PM MDT
Line 80:		Line 80:
	\|Halborn Article Explanation		\|Halborn Article Explanation
	\|Blockchain security company Halborn publishes a summary of the failure on their website. They report that the OptiFi team encountered a glitch while deploying an update to their program on Solana, resulting in the permanent lock of 661,000 USDC held in the contract. The majority of the locked funds, 95%, belonged to team members. During the update process, network latency caused delays, leading the team to terminate the update and transfer the USDC to a buffer address. However, attempts to recover the transferred assets using the solana program close command resulted in an error. The team later discovered that this command is meant to permanently close a program, making the assets inaccessible with a new program ID. According to their opinion, the incident highlights the need for a thorough understanding of the workings of blockchain programs and commands, as well as the importance of developing robust processes for handling unforeseen events when dealing with high-risk activities like program updates on blockchains<ref name="halborn-10632" />.		\|Blockchain security company Halborn publishes a summary of the failure on their website. They report that the OptiFi team encountered a glitch while deploying an update to their program on Solana, resulting in the permanent lock of 661,000 USDC held in the contract. The majority of the locked funds, 95%, belonged to team members. During the update process, network latency caused delays, leading the team to terminate the update and transfer the USDC to a buffer address. However, attempts to recover the transferred assets using the solana program close command resulted in an error. The team later discovered that this command is meant to permanently close a program, making the assets inaccessible with a new program ID. According to their opinion, the incident highlights the need for a thorough understanding of the workings of blockchain programs and commands, as well as the importance of developing robust processes for handling unforeseen events when dealing with high-risk activities like program updates on blockchains<ref name="halborn-10632" />.
			\|-
			\|September 5th, 2022 2:01:26 PM MDT
			\|Largest Reimbursement Transaction
			\|The first and largest reimbursement transaction for 4,808.08 USDC was completed on the Solana blockchain<ref name=":9">[https://solscan.io/tx/3jeZnCPemNV9CY1eo5bq8QMqyKpz8XDpvkiU4YE3SiQKW2w2btKcYAVqto3K9kYhvqfqdwHknjwcDGYYzD9Jt4Tq Reimbursement of 4,808.08 Solana - Solscan] (Oct 10, 2023)</ref><ref name=":10">[https://solscan.io/account/J5JNcFsLGuYp2QUq7WUqo1gQT9S53mN76Leht9XNJEWy Reimbursement Wallet - Solscan] (Oct 10, 2023)</ref>.
			\|-
			\|September 5th, 2022 2:22:31 PM MDT
			\|Final Reimbursement Transaction
			\|The final and smallest reimbursement transaction for 0.000298 USDC was completed on the Solana blockchain<ref>[https://solscan.io/tx/22bgW4NLiptT68uZfHv5aCWKmje6REzAJ1kpxX8bje5uWs2ye3Uy465ERMdcjZ2AsevrD5nzZjkpuWLcTvBFu8xJ Final Reimbursement For 0.000298 USDC - Solscan] (Oct 10, 2023)</ref><ref name=":10" />.
			\|-
			\|September 5th, 2022 9:42:00 PM MDT
			\|Reimbursement Completed
			\|OptiFi Labs reported the reimbursement completion to all affected users<ref name=":11">[https://twitter.com/OptifiLabs/status/1566995219689934848 OptiFi Labs - "We've already completed the fund transfer to all users as promised" - Twitter] (Oct 10, 2023)</ref>.
	\|-		\|-
	\|September 6th, 2022 10:06:00 PM MDT		\|September 6th, 2022 10:06:00 PM MDT
	\|Solana Program Recovery Proposal		\|Solana Program Recovery Proposal
	\|Support on program recovery proposal<ref>[https://twitter.com/OptifiLabs/status/1567363740454240257 OptiFi Labs - "much appreciate the support from @solana_devs on the program recovery proposal" - Twitter] (Jun 5, 2023)</ref>.		\|Support on program recovery proposal<ref>[https://twitter.com/OptifiLabs/status/1567363740454240257 OptiFi Labs - "much appreciate the support from @solana_devs on the program recovery proposal" - Twitter] (Jun 5, 2023)</ref>.
			\|-
			\|September 8th, 2022 4:54:00 AM MDT
			\|Mention In CoinBerry Article
			\|The OptiFi situation receives a mention in an article on the CoinBerry platform exploit and resulting lawsuit<ref>[https://www.coindesk.com/business/2022/09/08/canadian-crypto-exchange-coinberry-files-lawsuit-against-50-users-after-losing-120-btc/ Canadian Crypto Exchange Coinberry Files Lawsuit Against 50 Users After Losing 120 BTC - CoinDesk] (Dec 2, 2022)</ref>. "Last week, a Solana-based decentralized finance (DeFi) protocol lost $660,000 worth of crypto when it made a programming blunder."
			\|-
			\|September 19th, 2022 7:19:47 PM MDT
			\|Unknown Transaction From Reimburse Wallet
			\|The reimbursement wallet gives a final transaction, likely just emptying the last Solana from the wallet<ref>[https://solscan.io/tx/2J8jNfK9756sizyxS8uao9vXcJpQr6adnGdsAGLGt62ZcgoRUsVhZ8U8YzxYpGCXQWhN3JzMfAd6ayq3Fd1cZiEW Final Transaction For 0.09778572 SOL From Reimbursement Wallet - Solscan] (Oct 10, 2023)</ref>.
	\|-		\|-
	\|October 11th, 2022 10:56:00 PM MDT		\|October 11th, 2022 10:56:00 PM MDT
Line 114:		Line 134:

	Therefore, the total amount lost has been estimated at $661,000 USD.		Therefore, the total amount lost has been estimated at $661,000 USD.



	== Immediate Reactions ==		== Immediate Reactions ==

Line 159:		Line 176:
	# Closing remarks: The revised version adds a closing statement encouraging comments and suggestions and provides links to OptiFi's website, Twitter, Discord, and GitBook.		# Closing remarks: The revised version adds a closing statement encouraging comments and suggestions and provides links to OptiFi's website, Twitter, Discord, and GitBook.

	Overall, the revised version ~~adds~~ more clarity and emphasis on the irrecoverable nature of the program closure, includes compensation details, and ~~removes~~ some proposals while introducing an open question for discussion.		Overall, the revised version added more clarity and emphasis on the irrecoverable nature of the program closure, includes compensation details, and removed some proposals while introducing an open question for discussion.

	=== Reactions on Reddit Community ===		=== Reactions on Reddit Community ===
Line 175:		Line 192:

	== Total Amount Recovered ==		== Total Amount Recovered ==
	The OptiFi platform ~~has~~ stated that it ~~will~~ reimburse user's funds<ref name="coindesk-10624" />.		The OptiFi platform stated that it would reimburse user's funds<ref name="coindesk-10624" /> and reported that all users were reimbursed on September 5th, 2022<ref name=":11" />.

	~~There do not appear to have been any funds recovered in this case~~.		In total, roughly 11,000 USDC was paid out<ref name=":12">[https://docs.google.com/spreadsheets/d/1czqsnEEMrKAK5CYqH-C6DIOEfa-OvJFA/edit#gid=1406151357 OptiFi Settlement As Of September 2nd, 2022 - Google Doc] (Oct 10, 2023)</ref>, with the largest settlement being for 4,808.08 USDC<ref name=":9" />.

	~~What~~ funds ~~were~~ recovered~~? What funds were reimbursed for those affected users?~~		The remainder of the funds reportedly belonged to the OptiFi team themselves<ref name=":12">[https://docs.google.com/spreadsheets/d/1czqsnEEMrKAK5CYqH-C6DIOEfa-OvJFA/edit#gid=1406151357 OptiFi Settlement As Of September 2nd, 2022 - Google Doc] (Oct 10, 2023)</ref>. It is unclear if there have been any other funds recovered in this case.

	== Ongoing Developments ==		== Ongoing Developments ==
	What ~~parts of this case are still remaining~~ to ~~be concluded~~?		TBD - What changes have been made to Solana documentation? Are there any changes recommended? Has the protocol changed?
	== Individual Prevention Policies ==		== Individual Prevention Policies ==
	{{Prevention:Individual:Avoid Using Smart Contracts}}		{{Prevention:Individual:Avoid Using Smart Contracts}}

Azoundria: Another 30 minutes complete.

2023-06-29T21:52:55Z

Another 30 minutes complete.

Show changes

Azoundria: Completed another 30 minutes.

2023-06-05T20:46:58Z

Completed another 30 minutes.

← Older revision		Revision as of 14:46, 5 June 2023
Line 59:		Line 59:
	\|August 29th, 2022 5:17:23 PM MDT		\|August 29th, 2022 5:17:23 PM MDT
	\|OptiFi Incident Report		\|OptiFi Incident Report
	\|OptiFi publishes their incident report to Medium<ref>[https://web.archive.org/web/20220829231723/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - August 29th, 2022 5:17:23 PM MDT] (Mar 29, 2023)</ref>. <ref>[https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium] (Mar 29, 2023)</ref>		\|OptiFi publishes their incident report to Medium<ref>[https://web.archive.org/web/20220829231723/https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - August 29th, 2022 5:17:23 PM MDT] (Mar 29, 2023)</ref>. They "sincerely apologize for a program incident leading to the sudden closure of the OptiFi mainnet program"<ref name=":4">[https://medium.com/@OptiFi/optifi-program-incident-report-08-29-22-d8fe6d229bad OptiFi Program Incident Report — 08/29/22 - OptiFi Medium] (Mar 29, 2023)</ref>.
	\|-		\|-
	\|August 30th, 2022 5:08:59 AM MDT		\|August 30th, 2022 5:08:59 AM MDT
Line 76:		Line 76:
	\|Reddit Comedy Show		\|Reddit Comedy Show
	\|The situation is shared on Reddit, where the community finds it very entertaining<ref name="reddit-10622" />.		\|The situation is shared on Reddit, where the community finds it very entertaining<ref name="reddit-10622" />.
			\|-
			\|September 6th, 2022 10:06:00 PM MDT
			\|Solana Program Recovery Proposal
			\|Support on program recovery proposal<ref>[https://twitter.com/OptifiLabs/status/1567363740454240257 OptiFi Labs - "much appreciate the support from @solana_devs on the program recovery proposal" - Twitter] (Jun 5, 2023)</ref>.
			\|-
			\|October 11th, 2022 10:56:00 PM MDT
			\|Mango Markets Comment
			\|OptiFi comments on the Mango Markets exploit<ref>[https://twitter.com/OptifiLabs/status/1580059732773023745 OptiFi Labs - "Mango is the best." - Twitter] (Jun 5, 2023)</ref>.
			\|-
			\|October 20th, 2022 9:18:00 PM MDT
			\|Separated Capital Pool Program
			\|OptiFi implemented a program of separated capital pool<ref>[https://twitter.com/OptifiLabs/status/1583296646544523264 OptiFi Labs - "optifi has implemented an opUSDC program to separate capital pool from main program logic and add on security checks and freeze function to handle extreme or suspicious event." - Twitter] (Jun 5, 2023)</ref>.
			\|-
			\|October 25th, 2022 11:37:00 PM MDT
			\|Multi-Signature Deployment Infrastructure
			\|OptiFi begins implementation of multisignature on the program deployment<ref name=":5">[https://twitter.com/OptifiLabs/status/1585073742295597056 Optifi Labs - "Glad to share that we've implemented multisig smart contract deployment on our main program via @SquadsProtocol" - Twitter] (Jun 5, 2023)</ref><ref name=":6">[https://twitter.com/SquadsProtocol/status/1585143486910586881 Squads - "Excited for @OptifiLabs to join numerous other teams that rely on Squads for managing program upgrades via our multisig infrastructure. It has been a pleasure working with the team in setting this up." - Twitter] (Jun 5, 2023)</ref>.
			\|-
			\|November 11th, 2022 5:46:00 PM MST
			\|OptiFi Still Working On V2
			\|OptiFi posts on Twitter to announce they are still building their v2<ref>[https://twitter.com/OptifiLabs/status/1591231040504631296 OptiFi - "Hey , we’re still building our v2 and it’s the best time for DeFi." - Twitter] (Jun 5, 2023)</ref>.
	\|}		\|}

	== Technical Analysis ==		== Technical Analysis ==
	~~More detailed technical analysis goes here~~.		The OptiFi smart contract was accidentally closed through the use of the "solana program close" command. In particular, a command was run which terminated the project<ref name=":4" />.
			$ solana program close -u mainnet-beta --recipient DpLY9ZAomC35AXfWQmJvu7kVJgaSYyUVyCm9miZ6tj4M -k ~/solana-keys/DpLY9ZAomC35AXfWQmJvu7kVJgaSYyUVyCm9miZ6tj4M.json --authority~/solana-keys/DpLY9ZAomC35AXfWQmJvu7kVJgaSYyUVyCm9miZ6tj4M.jsonerror: The following required arguments were not provided:
			—-buffers

	== Total Amount Lost ==		== Total Amount Lost ==
Line 126:		Line 148:
	== Ultimate Outcome ==		== Ultimate Outcome ==
	What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?		What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

			=== Implementation of Multi-Signature Deployment Infrastructure ===
			The OptiFi team has worked to implement a multi-signature deployment infrastructure through the Squads protocol<ref name=":5" /><ref name=":6" />. TBD fill in more.

	== Total Amount Recovered ==		== Total Amount Recovered ==
Line 136:		Line 161:
	== Ongoing Developments ==		== Ongoing Developments ==
	What parts of this case are still remaining to be concluded?		What parts of this case are still remaining to be concluded?
	~~== General Prevention Policies ==~~
	~~The best prevention strategy surrounds the usage of multi-signature on all key decision points.~~

	~~In addition, having a greater review of the smart contract would likely have identified that funds could be locked up permanently in the event of the protocol closing down.~~
	== Individual Prevention Policies ==		== Individual Prevention Policies ==
	{{Prevention:~~Individuals~~:~~Placeholder~~}}		{{Prevention:Individual:Avoid Using Smart Contracts}}

	{{Prevention:Individuals:End}}		{{Prevention:Individuals:End}}

	== Platform Prevention Policies ==		== Platform Prevention Policies ==
	{{Prevention:Platforms:~~Placeholder~~}}		The best prevention strategy surrounds the usage of multi-signature on all key decision points such as smart contract closure. Having a greater review of the action would likely have identified that funds could be locked up permanently in the event of the protocol closing down.

			{{Prevention:Platform:Implement Multi-Signature}}

			The platform could also set aside some funds in a treasury or as part of an insurance multi-sig.

			{{Prevention:Platforms:Establish Industry Insurance Fund}}

	{{Prevention:Platforms:End}}		{{Prevention:Platforms:End}}

	== Regulatory Prevention Policies ==		== Regulatory Prevention Policies ==
	{{Prevention:Regulators:~~Placeholder~~}}		Solana is a centralized enough blockchain that there may be a pathway to modify the software and enable a future recovery of funds.

			{{Prevention:Regulators:Blockchain Level Exploit Handling}}

			Failing this, an industry insurance fund would need to step in to make whole any customers. Losses in this case are not significant against such a treasury.

			{{Prevention:Regulators:Establish Industry Insurance Fund}}

	{{Prevention:Regulators:End}}		{{Prevention:Regulators:End}}

Azoundria: Another 30 minutes progress made here.

2023-05-02T17:51:08Z

Another 30 minutes progress made here.

← Older revision		Revision as of 11:51, 2 May 2023
Line 63:		Line 63:
	\|August 30th, 2022 5:08:59 AM MDT		\|August 30th, 2022 5:08:59 AM MDT
	\|OptiFi Revisions		\|OptiFi Revisions
	\|OptiFi's incident report has been revised		\|OptiFi's incident report has been revised TBD
	\|-		\|-
	\|August 30th, 2022 6:26:00 AM MDT		\|August 30th, 2022 6:26:00 AM MDT
	\|CoinDesk Article		\|CoinDesk Article
	\|CoinDesk releases an article on the situation, which references the original blog post<ref name="coindesk-10624" />. The article states "OptiFi accidentally closed its mainnet platform in a programming blunder"<ref name="coindesk-10624" />.		\|CoinDesk releases an article on the situation, which references the original blog post<ref name="coindesk-10624" /><ref>[https://web.archive.org/web/20220830123316/https://www.coindesk.com/business/2022/08/30/solana-based-defi-protocol-optifi-loses-661k-in-programming-blunder/ Solana-Based DeFi Protocol OptiFi Loses $661K in Programming Blunder - CoinDesk Archive August 30th, 2022 6:33:16 AM MDT] (May 2, 2023)</ref>. The article states "OptiFi accidentally closed its mainnet platform in a programming blunder". The article reports the issue happened when the protocol accidentally closed its mainnet platform while attempting to update its program code, resulting in the permanent closure of the platform and the loss of $661,000 in user funds. The platform has pledged to reimburse all users' deposits and settle positions manually on Friday, although the estimated process time will be two weeks. This is one of the first cases where a programming error has resulted in the complete loss of customer assets in the DeFi space<ref name="coindesk-10624" />.
	\|-		\|-
	\|August 30th, 2022 7:25:00 AM MDT		\|August 30th, 2022 7:25:00 AM MDT
	\|CoinDesk Article Revision		\|CoinDesk Article Revision
	\|CoinDesk revised their article. They determined that OptiFi was a "platform" instead of a "protocol", that it was Solana blockchain-powered instead of merely Solana-powered, and that rug pulls and frauds were ~~not~~ erroneous behaviour<ref>[https://web.archive.org/web/20220830123316/https://www.coindesk.com/business/2022/08/30/solana-based-defi-protocol-optifi-loses-661k-in-programming-blunder/ Solana-Based DeFi Protocol OptiFi Loses $661K in Programming Blunder - August 30th, 2022 6:33:16 AM MDT] (Mar 29, 2023)</ref><ref>[https://web.archive.org/web/20220830173543/https://www.coindesk.com/business/2022/08/30/solana-based-defi-protocol-optifi-loses-661k-in-programming-blunder/ Solana-Based DeFi Protocol OptiFi Loses $661K in Programming Blunder - August 30th, 2022 11:35:43 AM MDT] (Mar 29, 2023)</ref>.		\|CoinDesk revised their article. They determined that OptiFi was a "platform" instead of a "protocol", that it was Solana blockchain-powered instead of merely Solana-powered, and removed the text stating that rug pulls and frauds were "erroneous behaviour"<ref>[https://web.archive.org/web/20220830123316/https://www.coindesk.com/business/2022/08/30/solana-based-defi-protocol-optifi-loses-661k-in-programming-blunder/ Solana-Based DeFi Protocol OptiFi Loses $661K in Programming Blunder - August 30th, 2022 6:33:16 AM MDT] (Mar 29, 2023)</ref><ref>[https://web.archive.org/web/20220830173543/https://www.coindesk.com/business/2022/08/30/solana-based-defi-protocol-optifi-loses-661k-in-programming-blunder/ Solana-Based DeFi Protocol OptiFi Loses $661K in Programming Blunder - August 30th, 2022 11:35:43 AM MDT] (Mar 29, 2023)</ref>.
	\|-		\|-
	\|September 1st, 2022 5:36:37 PM MDT		\|September 1st, 2022 5:36:37 PM MDT
Line 77:		Line 77:
	\|The situation is shared on Reddit, where the community finds it very entertaining<ref name="reddit-10622" />.		\|The situation is shared on Reddit, where the community finds it very entertaining<ref name="reddit-10622" />.
	\|}		\|}

			== Technical Analysis ==
			More detailed technical analysis goes here.

	== Total Amount Lost ==		== Total Amount Lost ==
Line 102:		Line 105:
	=== OptiFi Incident Report ===		=== OptiFi Incident Report ===

	"We sincerely apologize for a program incident leading to the sudden closure of the OptiFi mainnet program and we could not recover it," the company's blog post on the blunder reads. "We will compensate all users’ funds and prevent it from happening again."		OptiFi published an incident report on their website.<blockquote>"We sincerely apologize for a program incident leading to the sudden closure of the OptiFi mainnet program and we could not recover it," the company's blog post on the blunder reads. "We will compensate all users’ funds and prevent it from happening again."

	"We promise that we will return all users’ deposits and settle all user positions manually according to Pyth oracle at 8 AM Sep 2nd UTC. All transactions and deposits will be based on Solscan. The estimated process time will be two weeks."		"We promise that we will return all users’ deposits and settle all user positions manually according to Pyth oracle at 8 AM Sep 2nd UTC. All transactions and deposits will be based on Solscan. The estimated process time will be two weeks."
Line 114:		Line 117:
	"ALL the users’ margin accounts USDC tokens, option tokens, and AMMs USDC vaults are locked in where they are, because they are using PDAs, which are bound to optFiKjQpoQ3PvacwnFWaPUAqXCETMJSz2sz8HwPe9B."		"ALL the users’ margin accounts USDC tokens, option tokens, and AMMs USDC vaults are locked in where they are, because they are using PDAs, which are bound to optFiKjQpoQ3PvacwnFWaPUAqXCETMJSz2sz8HwPe9B."

	"We suggest Solana officials add the warning regarding the irrecoverable result of closing a program in Solana Docs and Command-Line Interface (CLI) to help Solana devs understand the function."		"We suggest Solana officials add the warning regarding the irrecoverable result of closing a program in Solana Docs and Command-Line Interface (CLI) to help Solana devs understand the function."</blockquote>

			=== Reactions on Reddit Community ===
			The OptiFi situation generated considerable discussion on Reddit<ref name="reddit-10622" /><ref>[https://old.reddit.com/r/CryptoCurrency/comments/x3m4qv/crypto_dev_enters_wrong_command_destroys_entire/imqtn61/ surrender_the_juice - “I don’t always get fired from my job, but when I do, it’s because I deleted the whole company.” - Reddit] (May 2, 2023)</ref><ref>[https://old.reddit.com/r/CryptoCurrency/comments/x3m4qv/crypto_dev_enters_wrong_command_destroys_entire/imq8x9h/ nthgen - "Annnnnnnnnnd... it's gone." - Reddit] (May 2, 2023)</ref><ref>[https://old.reddit.com/r/CryptoCurrency/comments/x3m4qv/crypto_dev_enters_wrong_command_destroys_entire/imqafu2/ deathbyfish13 - "Why don't they simply ctrl + z? /s" - Reddit] (May 2, 2023)</ref>.<blockquote>"I don't always test my code, but when I do, I test it in production." - Most interesting man in the world.

			“I don’t always get fired from my job, but when I do, it’s because I deleted the whole company.”</blockquote><blockquote>"Annnnnnnnnnd... it's gone."</blockquote><blockquote>"Why don't they simply ctrl + z? /s"</blockquote>

	== Ultimate Outcome ==		== Ultimate Outcome ==

Azoundria: /* About OptiFi */ Adding TBD items.

2023-03-31T21:32:40Z

About OptiFi: Adding TBD items.

← Older revision		Revision as of 15:32, 31 March 2023
Line 2:		Line 2:

	== About OptiFi ==		== About OptiFi ==
			TBD - Add information about launch timeline. Add information about team. Add information about headquarters.

	OptiFi was a derivatives-focused<ref name="coindesk-10624" /> Solana-based decentralized exchange which offered new innovation in trading<ref name="youtube-10630" />. Users could interact with the smart contract through their website<ref name="optifiapparchive-10631" /><ref name="solana-10633" />.<blockquote>"OptiFi is the first derivative DEX utilizing "Portfolio Margin" across all financial instruments with the same underlying asset.		OptiFi was a derivatives-focused<ref name="coindesk-10624" /> Solana-based decentralized exchange which offered new innovation in trading<ref name="youtube-10630" />. Users could interact with the smart contract through their website<ref name="optifiapparchive-10631" /><ref name="solana-10633" />.<blockquote>"OptiFi is the first derivative DEX utilizing "Portfolio Margin" across all financial instruments with the same underlying asset.

Azoundria: OptiFi Project Information - Solana "Riptide" Website (Mar 27, 2023) done. All sources have now been resolved.

2023-03-31T21:31:45Z

OptiFi Project Information - Solana "Riptide" Website (Mar 27, 2023) done. All sources have now been resolved.

← Older revision		Revision as of 15:31, 31 March 2023
Line 1:		Line 1:
	{{Case Study Under Construction}}~~{{Unattributed Sources}}~~		{{Case Study Under Construction}}[[File:Optifi.jpg\|thumb\|OptiFi Branding]]OptiFi was a decentralized exchange service which sought to process more transactions, optimize the liquidation process, and enable more liquidity in markets. On August 29th, the developers made a mistake and permanently closed down their smart contract, with the entire market coming to an end and a reported $661k worth of funds being locked in the smart contract.

	[[File:Optifi.jpg\|thumb\|OptiFi Branding]]OptiFi was a decentralized exchange service which sought to process more transactions, optimize the liquidation process, and enable more liquidity in markets. On August 29th, the developers made a mistake and permanently closed down their smart contract, with the entire market coming to an end and a reported $661k worth of funds being locked in the smart contract.

	~~This is a global/international case not involving a specific country.<ref name="solana-10633" />~~

	== About OptiFi ==		== About OptiFi ==
	OptiFi was a derivatives-focused<ref name="coindesk-10624" /> Solana-based decentralized exchange which offered new innovation in trading<ref name="youtube-10630" />. Users could interact with the smart contract through their website<ref name="optifiapparchive-10631" />.<blockquote>"OptiFi is the first derivative DEX utilizing "Portfolio Margin" across all financial instruments with the same underlying asset.		OptiFi was a derivatives-focused<ref name="coindesk-10624" /> Solana-based decentralized exchange which offered new innovation in trading<ref name="youtube-10630" />. Users could interact with the smart contract through their website<ref name="optifiapparchive-10631" /><ref name="solana-10633" />.<blockquote>"OptiFi is the first derivative DEX utilizing "Portfolio Margin" across all financial instruments with the same underlying asset.

	We see there are three main problems with derivative DEXes: Lack of high performance blockchain infrastructure; Inefficient margining and collateral system designs; Not enough liquidity on the order book.		We see there are three main problems with derivative DEXes: Lack of high performance blockchain infrastructure; Inefficient margining and collateral system designs; Not enough liquidity on the order book.
Line 162:		Line 158:
	<ref name="optifiapparchive-10631">[https://web.archive.org/web/20220830225235/https://www.optifi.app/ OptiFi - Portfolio Margining Derivatives DEX - August 30th, 2022 4:52:35 PM MDT] (Mar 27, 2023)</ref>		<ref name="optifiapparchive-10631">[https://web.archive.org/web/20220830225235/https://www.optifi.app/ OptiFi - Portfolio Margining Derivatives DEX - August 30th, 2022 4:52:35 PM MDT] (Mar 27, 2023)</ref>
	<ref name="halborn-10632">[https://www.halborn.com/blog/post/explained-the-optifi-glitch-august-2022 Explained: The OptiFi Glitch (August 2022)] (Mar 27, 2023)</ref>		<ref name="halborn-10632">[https://www.halborn.com/blog/post/explained-the-optifi-glitch-august-2022 Explained: The OptiFi Glitch (August 2022)] (Mar 27, 2023)</ref>
	<ref name="solana-10633">[https://solana.com/riptide/voting/opti-fi Solana ~~\| OptiFi~~] (Mar 27, 2023)</ref>		<ref name="solana-10633">[https://solana.com/riptide/voting/opti-fi OptiFi Project Information - Solana "Riptide" Website] (Mar 27, 2023)</ref>
	</references>		</references>

Azoundria: Explained: The OptiFi Glitch (August 2022) (Mar 27, 2023) completed, one source left only.

2023-03-31T21:30:08Z

Explained: The OptiFi Glitch (August 2022) (Mar 27, 2023) completed, one source left only.

← Older revision		Revision as of 15:30, 31 March 2023
Line 3:		Line 3:
	[[File:Optifi.jpg\|thumb\|OptiFi Branding]]OptiFi was a decentralized exchange service which sought to process more transactions, optimize the liquidation process, and enable more liquidity in markets. On August 29th, the developers made a mistake and permanently closed down their smart contract, with the entire market coming to an end and a reported $661k worth of funds being locked in the smart contract.		[[File:Optifi.jpg\|thumb\|OptiFi Branding]]OptiFi was a decentralized exchange service which sought to process more transactions, optimize the liquidation process, and enable more liquidity in markets. On August 29th, the developers made a mistake and permanently closed down their smart contract, with the entire market coming to an end and a reported $661k worth of funds being locked in the smart contract.

	This is a global/international case not involving a specific country.~~<ref name="halborn-10632" />~~<ref name="solana-10633" />		This is a global/international case not involving a specific country.<ref name="solana-10633" />

	== About OptiFi ==		== About OptiFi ==
	OptiFi was a derivatives-focused<ref name="coindesk-10624" /> Solana-based decentralized exchange which offered new innovation in trading<ref name="youtube-10630" /><ref name="optifiapparchive-10631" />.<blockquote>"OptiFi is the first derivative DEX utilizing "Portfolio Margin" across all financial instruments with the same underlying asset.		OptiFi was a derivatives-focused<ref name="coindesk-10624" /> Solana-based decentralized exchange which offered new innovation in trading<ref name="youtube-10630" />. Users could interact with the smart contract through their website<ref name="optifiapparchive-10631" />.<blockquote>"OptiFi is the first derivative DEX utilizing "Portfolio Margin" across all financial instruments with the same underlying asset.

	We see there are three main problems with derivative DEXes: Lack of high performance blockchain infrastructure; Inefficient margining and collateral system designs; Not enough liquidity on the order book.		We see there are three main problems with derivative DEXes: Lack of high performance blockchain infrastructure; Inefficient margining and collateral system designs; Not enough liquidity on the order book.
Line 14:		Line 14:
	Utilizes portfolio margin and partial liquidation to enhance capital efficiency, and offers the first ever on-chain options AMM with delta-neutral strategy to ensure continuous liquidity across all financial instruments on OptiFi.		Utilizes portfolio margin and partial liquidation to enhance capital efficiency, and offers the first ever on-chain options AMM with delta-neutral strategy to ensure continuous liquidity across all financial instruments on OptiFi.

	Unlike typical margin requirements that set margins independent from each instrument, Portfolio Margin takes all instruments with the same underlying asset into account, and nets them against one another, creating lower margin requirements and offsets risks for the user."</blockquote>		Unlike typical margin requirements that set margins independent from each instrument, Portfolio Margin takes all instruments with the same underlying asset into account, and nets them against one another, creating lower margin requirements and offsets risks for the user."</blockquote>Programs (equivalent to smart contracts) on Solana can be designed to be updatable, which allows for new functionality to be added or security flaws to be corrected<ref name="halborn-10632" />.

	== The Reality ==		== The Reality ==
	~~The OptiFi platform was launched quickly and did not employ~~ a ~~smart contract auditing service~~.		As a decentralized system that relies on the internet, blockchains can experience latency<ref name="halborn-10632" />. When operations are aborted in the middle, funds can be sent to a buffer address<ref name="halborn-10632" />.

	~~A critical vulnerability was that~~ the ~~platform could~~ be ~~shut down by~~ a ~~single developer~~, and ~~all funds would~~ be ~~permanently lost in that case~~.		While the close program command can be used to recover solana sent to a buffer address, this command is intended to permanently close a program<ref name="halborn-10632" />. It does not recover other "program derived" assets (PDAs) such as USDC<ref name="halborn-10632" />, and cannot be reverted<ref name="halborn-10632" />. The program can only be relaunched on a new program ID<ref name="halborn-10632" />.

	~~The~~ Solana ~~blockchain did not provide complete~~ documentation ~~on the effects of closing down smart contracts on their chain~~.		TBD - add information about Solana documentation.

	~~This sections is included if a case involved deception or~~ information ~~that was unknown at~~ the ~~time~~. ~~Examples include:~~		TBD - add information about the smart contract getting audits prior.

	* When the service was actually started (if different than the "official story").		TBD - add any information about past developer experience.
	* Who actually ran a service and their own personal history.
	* How the service was structured behind the scenes. (For example, there was no "trading bot".)
	* Details of what audits reported and how vulnerabilities were missed during auditing.

	== What Happened ==		== What Happened ==
	After launching, OptiFi accidentally closed its mainnet platform, which resulted in $661,000 in USDC being locked up<ref name="coindesk-10624" />. The company says one of its developers was trying to update the program on the Solana blockchain and accidentally used a command that shutting the whole thing down in one fell swoop.<blockquote>"On 29th August around 06:00 UTC, we had an update to our Solana program code, so our deployer tried to upgrade the OptiFi program on Solana mainnet." "At 06:07 UTC - The command line was executed successfully and the OptiFi program was closed."</blockquote>That means over half a million dollars worth of USDC are now "not recoverable at the moment of writing," according to the blog post.		After launching, OptiFi accidentally closed its mainnet platform program<ref name="halborn-10632" />, which resulted in $661,000 in USDC being locked up<ref name="halborn-10632" /><ref name="coindesk-10624" />. The company says one of its developers was trying to update the program on the Solana blockchain and accidentally used a command that shutting the whole thing down in one fell swoop.<blockquote>"On 29th August around 06:00 UTC, we had an update to our Solana program code, so our deployer tried to upgrade the OptiFi program on Solana mainnet." "At 06:07 UTC - The command line was executed successfully and the OptiFi program was closed."</blockquote>That means over half a million dollars worth of USDC are now "not recoverable at the moment of writing," according to the blog post.
	{\| class="wikitable"		{\| class="wikitable"
	\|+Key Event Timeline - OptiFi Accidental Shutdown Command		\|+Key Event Timeline - OptiFi Accidental Shutdown Command
Line 84:		Line 81:

	== Total Amount Lost ==		== Total Amount Lost ==
	The amount lost has been consistently reported as $661,000 USD<ref name="coindesk-10624" /><ref name="defillama-10629" /><ref name="optifilabstwitter-10627" />. As the amount was lost in the USDC stablecoin<ref name="optifilabstwitter-10627" />, there is no volatile exchange rate to consider.		The amount lost has been consistently reported as $661,000 USD<ref name="coindesk-10624" /><ref name="defillama-10629" /><ref name="optifilabstwitter-10627" /><ref name="halborn-10632" />. As the amount was lost in the USDC stablecoin<ref name="optifilabstwitter-10627" />, there is no volatile exchange rate to consider. 95% of the lost funds were owned by the OptiFi team<ref name="halborn-10632" />.

	Therefore, the total amount lost has been estimated at $661,000 USD.		Therefore, the total amount lost has been estimated at $661,000 USD.

Azoundria: OptiFi - Portfolio Margining Derivatives DEX - August 30th, 2022 4:52:35 PM MDT (Mar 27, 2023) complete. 2 sources left.

2023-03-31T21:15:57Z

OptiFi - Portfolio Margining Derivatives DEX - August 30th, 2022 4:52:35 PM MDT (Mar 27, 2023) complete. 2 sources left.

← Older revision		Revision as of 15:15, 31 March 2023
Line 3:		Line 3:
	[[File:Optifi.jpg\|thumb\|OptiFi Branding]]OptiFi was a decentralized exchange service which sought to process more transactions, optimize the liquidation process, and enable more liquidity in markets. On August 29th, the developers made a mistake and permanently closed down their smart contract, with the entire market coming to an end and a reported $661k worth of funds being locked in the smart contract.		[[File:Optifi.jpg\|thumb\|OptiFi Branding]]OptiFi was a decentralized exchange service which sought to process more transactions, optimize the liquidation process, and enable more liquidity in markets. On August 29th, the developers made a mistake and permanently closed down their smart contract, with the entire market coming to an end and a reported $661k worth of funds being locked in the smart contract.

	This is a global/international case not involving a specific country.~~<ref name="optifiapparchive-10631" />~~<ref name="halborn-10632" /><ref name="solana-10633" />		This is a global/international case not involving a specific country.<ref name="halborn-10632" /><ref name="solana-10633" />

	== About OptiFi ==		== About OptiFi ==
	OptiFi was a derivatives-focused<ref name="coindesk-10624" /> Solana-based decentralized exchange which offered new innovation in trading<ref name="youtube-10630" />.<blockquote>"OptiFi is the first derivative DEX utilizing "Portfolio Margin" across all financial instruments with the same underlying asset.		OptiFi was a derivatives-focused<ref name="coindesk-10624" /> Solana-based decentralized exchange which offered new innovation in trading<ref name="youtube-10630" /><ref name="optifiapparchive-10631" />.<blockquote>"OptiFi is the first derivative DEX utilizing "Portfolio Margin" across all financial instruments with the same underlying asset.

	We see there are three main problems with derivative DEXes: Lack of high performance blockchain infrastructure; Inefficient margining and collateral system designs; Not enough liquidity on the order book.		We see there are three main problems with derivative DEXes: Lack of high performance blockchain infrastructure; Inefficient margining and collateral system designs; Not enough liquidity on the order book.
Line 163:		Line 163:
	<ref name="defillama-10629">[https://defillama.com/protocol/optifi OptiFi: TVL and Stats - DefiLlama] (Mar 27, 2023)</ref>		<ref name="defillama-10629">[https://defillama.com/protocol/optifi OptiFi: TVL and Stats - DefiLlama] (Mar 27, 2023)</ref>
	<ref name="youtube-10630">[https://www.youtube.com/watch?v=nuHzY4LgZ8w OptiFi - a BIG leap forward in DeFi - YouTube] (Mar 27, 2023)</ref>		<ref name="youtube-10630">[https://www.youtube.com/watch?v=nuHzY4LgZ8w OptiFi - a BIG leap forward in DeFi - YouTube] (Mar 27, 2023)</ref>
	<ref name="optifiapparchive-10631">https://web.archive.org/web/20220830225235/https://www.optifi.app/ (Mar 27, 2023)</ref>		<ref name="optifiapparchive-10631">[https://web.archive.org/web/20220830225235/https://www.optifi.app/ OptiFi - Portfolio Margining Derivatives DEX - August 30th, 2022 4:52:35 PM MDT] (Mar 27, 2023)</ref>
	<ref name="halborn-10632">[https://www.halborn.com/blog/post/explained-the-optifi-glitch-august-2022 Explained: The OptiFi Glitch (August 2022)] (Mar 27, 2023)</ref>		<ref name="halborn-10632">[https://www.halborn.com/blog/post/explained-the-optifi-glitch-august-2022 Explained: The OptiFi Glitch (August 2022)] (Mar 27, 2023)</ref>
	<ref name="solana-10633">[https://solana.com/riptide/voting/opti-fi Solana \| OptiFi] (Mar 27, 2023)</ref>		<ref name="solana-10633">[https://solana.com/riptide/voting/opti-fi Solana \| OptiFi] (Mar 27, 2023)</ref>
	</references>		</references>

Azoundria: OptiFi - a BIG leap forward in DeFi - YouTube (Mar 27, 2023) moved to the about section of OptiFi - down to 3 sources left.

2023-03-31T21:14:11Z

OptiFi - a BIG leap forward in DeFi - YouTube (Mar 27, 2023) moved to the about section of OptiFi - down to 3 sources left.

← Older revision		Revision as of 15:14, 31 March 2023
Line 3:		Line 3:
	[[File:Optifi.jpg\|thumb\|OptiFi Branding]]OptiFi was a decentralized exchange service which sought to process more transactions, optimize the liquidation process, and enable more liquidity in markets. On August 29th, the developers made a mistake and permanently closed down their smart contract, with the entire market coming to an end and a reported $661k worth of funds being locked in the smart contract.		[[File:Optifi.jpg\|thumb\|OptiFi Branding]]OptiFi was a decentralized exchange service which sought to process more transactions, optimize the liquidation process, and enable more liquidity in markets. On August 29th, the developers made a mistake and permanently closed down their smart contract, with the entire market coming to an end and a reported $661k worth of funds being locked in the smart contract.

	This is a global/international case not involving a specific country.~~<ref name="youtube-10630" />~~<ref name="optifiapparchive-10631" /><ref name="halborn-10632" /><ref name="solana-10633" />		This is a global/international case not involving a specific country.<ref name="optifiapparchive-10631" /><ref name="halborn-10632" /><ref name="solana-10633" />

	== About OptiFi ==		== About OptiFi ==
	OptiFi was a derivatives-focused<ref name="coindesk-10624" /> Solana-based decentralized exchange which offered new innovation in trading.<blockquote>"OptiFi is the first derivative DEX utilizing "Portfolio Margin" across all financial instruments with the same underlying asset.		OptiFi was a derivatives-focused<ref name="coindesk-10624" /> Solana-based decentralized exchange which offered new innovation in trading<ref name="youtube-10630" />.<blockquote>"OptiFi is the first derivative DEX utilizing "Portfolio Margin" across all financial instruments with the same underlying asset.

	We see there are three main problems with derivative DEXes: Lack of high performance blockchain infrastructure; Inefficient margining and collateral system designs; Not enough liquidity on the order book.		We see there are three main problems with derivative DEXes: Lack of high performance blockchain infrastructure; Inefficient margining and collateral system designs; Not enough liquidity on the order book.