GIP-59: Authorize Warbler to implement onchain solutions to recover funds related to Stratos and Tugende

Authors : @mikesall @blakewest

Summary :
Stratos and Tugende are in the midst of negotiating amendments to the offchain loan agreements to recover value for Goldfinch participants. This proposal is to approve Warbler Labs to help in implementing the necessary technical changes onchain to reflect the amended offchain agreements. This is to account for legal contract changes where the loan is in default and the terms of the agreement (eg. principal being accelerated, or timelines changing) have changed. These technical changes will be scoped for the Stratos and Tugende pools and will not affect other pools.

Motivation
Warbler is committed to supporting the Goldfinch community recover the maximum amount from these two pools and this proposal is in line with that commitment. Once offchain legal docs are negotiated and finalized for the Stratos and Tugende deals, it may be necessarily to adjust the expected interest or principal amounts, waterfalls, or maturity within the smart contracts. Therefore, it will require updating the smart contracts to align with the terms of the legal agreements. We believe an onchain solution will be the least difficult and fastest way to get the recovered funds in the hands of community members.

Specification & Requirements :
There are no specifications yet except that if and when agreements are finalized for either pool, it will involve upgrading or changing the loan contracts and perhaps the pool tokens for involved investors. The general purpose of changes will be to reflect an onchain state for loans that are in default and where recovery is expected. In nearly all cases, when a loan defaults, the principal is accelerated (due immediately), but some of it may also be deferred to a later time. The current protocol mechanics do not contemplate an accelerated principal scenario and makes implementation of nuanced off-chain recoveries on the Protocol impossible in the current state.

Before any changes are made, a detailed update will be provided to the community.

Benefits :

  • Junior backers and senior pool participants will realize their maximum onchain recovery possible from the Stratos and Tugende situations as soon as possible.

Downside : Making smart contract changes always carries risk.

Voting :

  • Yes”: Authorize Warbler to implement a technical recovery solution if deemed necessary on behalf of the Goldfinch community. Detailed information will precede any action once documents are completed.
  • No”: Do not implement an ohchain solution for recovering funds. Warbler believes the recovery will be much more difficult and potentially impossible without an onchain component to the solution.

Resources :

5 Likes

I vote Yes to this proposal.

I see no risks in updating and adjusting smart contracts according to off-chain agreements. Believe, that it will help us to recover funds asap.

I will vote “YES” for this proposal on the snapshot.

I think that the features and functionality of a smart contract should correspond to accepted off-chain decisions. Implementing accelerated loan repayment may be one of the few options that will allow you to avoid additional losses in the future.
Of course, I vote “YES”.

Q: Is there any audit expected (and is it necessary) after updating a smart contract?

It is in the best interest of all parties of the protocol, I support

I will vote “Yes”, as I can only see the positive impact on the Tugende and Stratos situation if approved

Yes :sunglasses: authorize mmmm

I consider this acceptable within the current process, and I’ll vote “yes”.

// Yes.

voted yes for all goldfinch participants

Update! I just did an edit, and wanted to clarify the sentence in the “yes” section. It used to say “a detailed technical proposal will follow when documents are completed”, which might imply that we would do a separate community governance post for that. That is not the intention. The intention was to mean that we would provide the community with detailed technical information about what changes are being made. Hence it now says “Detailed information will precede any action once documents are completed.”

The whole point of this GIP is to avoid having to do many approvals for various technical implementation details. But it’s still good for the community to know what will be done as it will of course affect them economically.

Council has approved the proposal