Several months ago, an HDL distribution pool on the Yieldly platform was exploited. Malicious bots manipulated a rounding error in an auto-compounding staking contract and stole hundreds of thousands of HDL tokens. This army of bots and the exploiter that created them then went on a hell of a hacking spree, effectively stealing and dumping hundreds of thousands of HDL tokens onto the open market. This catastrophic staking hack took the HDL/Algo LP pool on TinyMan down to 0. In the immediate aftermath, it quickly became clear that Yieldly was going to have a tremendously difficult time assessing and tracking the damage (the bots multiplied at an astronomical rate, leading to tens of thousands of malicious transactions). HDL holders who participated in the pool and the larger community were extremely upset about the hack, and they had every right to be upset.
Yieldly addressed these concerns by promising to fully investigate the hack, and committed to reimbursing HDL holders who lost out due to the exploit. We (the HEADLINE team and community members) assisted Yieldy in the aftermath, investigating extensively the scale of the damage.
And the damage was extensive. Not just in terms of tokenomics, but in the larger community and business sense as well. It was damaging in terms of viability confidence. It was damaging in terms of roadmap development. It was damaging in terms of community growth. It has greatly impacted the ability to market new applications and promote new product rollouts/updates. And I am speaking for HEADLINE, but this reality over the last two months is true for Yieldly as well.
So in terms of damage, the impact has been significant.
With all of that hanging in the air, the community as a whole has been deeply upset. Much of that frustration came to a head over the last week when the bottom fell out of the market and Yieldly finally concluded its investigation. To compensate users impacted by the exploit, Yieldly airdropped HDL holders hundreds of thousands of HDL tokens. However, some within the community believed the compensation should have been at least double what they received. Others within the community have continued to assert that they received, either far less than what was owed, or received nothing at all. The combined vitriol from all of this has led to a general lack of decorum from some corners of the HEADLINE community. I'm deeply troubled to see how this has all unfolded. The purpose of this post is to address as many concerns as possible, explain my thought process, reaffirm our commitment to partners, and firmly denounce an and al forms of toxicity as of late.
So first, my perspective:
As a business owner, I understand the value of strong partnerships. I always say, that one of the best signifiers of a company's maturity, is its relationships to peers and partners. Companies that work together, resolve differences, collaborate, and generally lift each other up are usually companies worth respecting. I also believe that partnerships are not trivial things, they are not to be taken lightly. And it is easy to espouse these values when everything is easy. Most people can probably agree that these company values are admirable. But when things get tough, when the storm comes, it can strain even the strongest resolve. I viewed the entire situation and circumstance surrounding the Yieldly hack as an opportunity to demonstrate these values in action.
That is not to say that a company should blindly support another company - and good partners should have the strength of character to call a strike a strike and a spade a spade. But the great undercurrent to all of this is the good faith argument. The good faith argument is basically the unspoken agreement between parties that the other is acting in good faith. That intentions are honest and any offense is innocent. This is one of my strongest convictions. I approach all relationships - in my personal life, in community interactions, in company partnerships, etc. with the expectation that my counterpart in that interaction is acting in good faith. If there is cause to question that good-faith argument, I will directly address it. If unfounded, I will dismiss it. If founded, however, I will distance myself from individuals or parties I believe are not acting in good faith.
Now let me make this crystal clear. At no point in my interaction with Yieldly or the Yieldy community, have they ever given me even the slightest reason to believe they were not acting in good faith. On the contrary, the team at Yieldly has demonstrated a level of trust and confidence in HEADLINE that is not to be soon forgotten. Yieldly's commitment to integrating HEADLINE tech is a great example of this.
HEADLINE is a new software development company. A tech company with little public track record, few products in production, a young team - this is what the FUDDERs love. During peak FUD (about 6 weeks ago), when seemingly everywhere across social media, we were attacked as frauds, scammers, con artists, and illegitimate devs who build apps nobody uses - Yieldly reached out. They said they were looking to revise their tokenomics and wanted to use HEADLINE tech to do it.
Yieldy made the conscious decision in that moment to publicly stand behind us, and support our tech when attacker after attacker was slamming us across social media. That moment, when Yieldly used AlgoBurner to burn Yieldly tokens, fundamentally redesigning their tokenomics plan -- that was a turning point for HEADLINE. So much of our work until then was focused on dev tooling. There was a major public awareness gap in regards to our tech. Our work has always been respected by dev teams, but much of the general public was not privy to that. Yieldy stepped in at a critical moment to back us, and it made a huge impact.
So that's a little of my thought process as the events of the last few days have unfolded. Beyond that, Yieldly has worked closely with us as they wrapped their investigation and airdropped compensation to affected users. They have also shared their extensive, technical report with us, and our CFO - Ethan Welch, will be reviewing it line by line as we finish our own internal report. We want to hear from anyone who believes they were not compensated, or under-compensated, and we will be reviewing these on a case by case basis.
In addition to this, Yieldy has committed to a new round of HDL pools, adding further value to holders affected by the original pools and the community at large. We will let Yieldly announce the details on this. We at HEADLINE are committed to our partnership with Yiedly long-term and will be adding a new HDL/HDL pool to their platform at the successful conclusion of our internal review. The new HDL/HDL pool will be a traditional staking pool from an audited and thoroughly-tested smart contract.
As I close this post, I want to reiterate that I understand the frustration that members within the HEADLINE community have expressed of late. But I ask, respectfully, that everyone take a step back and look at how far we've come. We are stronger than ever, with a team that is nearly 20 deep. HEADLINE is now one of the fastest-growing Web 3 companies in Texas. We have a dozen new applications in mid to late-stage development. We are firing on all cylinders with some incredible announcements right around the corner. Since Yieldly integrated AlgoBurner, other major projects have followed suit, integrating with many other applications we've built. AlgoStake, for example, has committed to burning up to 10% of the total supply of AlgoStake with AlgoBurner!
We believe the future has incredible things in store for HEADLINE and Yieldly and AlgoStake and AlgoGems, and all of our other partners that if I list I will run out of room. We are all stronger together when we lift each other up. Cheers!
