The Fantom Foundation's Vested Interest in Tomb Finance
Take a look at this transaction (opens in a new tab). On April 30th, the Fantom Foundation chose to lend 10 Million FTM to Harry Yeh to prevent his impending TOMB/WFTM liquidations. Sadly, Harry Yeh still ended up liquidated (opens in a new tab) after leveraging his protocol's tokens and treasury.
You might assume this to be a simple favor to support Harry Yeh, who is major asset to Fantom and its ecosystem. The actual truth is significantly more alarming, and requires a deep-dive into the origins of a certain wallet.
Take note of this wallet address: 0x1bfFB3a232E06E06A5D9e93C8DF3321f768197c2 (opens in a new tab)
It is the Foundation's payroll wallet controlled by Michael Kong:
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It has control over the Foundation’s Gnosis Safe and was funded 100M FTM from the safe: Link (opens in a new tab)
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It has received Fantom from a known Foundation Wallet: Link (opens in a new tab)
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The address is connected to the wallet where the Foundation collects its validator rewards (they have dedicated wallet to collect all the rewards for all eight of their validators): Link (opens in a new tab)
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Early ETH transactions (2020) show payroll payments to several wallets presumably Fantom Employees: Link (opens in a new tab)
Why does it matter whose wallet this is?
The wallet has been DCAing into TOMB since February 19th for a total token amount of 2.97 million TOMB. Not a big deal, the Foundation can do whatever they want with their funds. However, that line gets blurry knowing that their Harry Yeh loan bailout was not altruistic and potentially to protect their investment from going underwater.
It matters because the Foundation had reasons beyond saving Harry to ensure that TOMB remained pegged and to prevent Harry Yeh's TOMB liquidation. The reaction to this loan would have been completely different if users knew that the Foundation had vested interest to prevent TOMB liquidations from occurring. In the end, the bailout did not prevent Harry’s liquidation and the wallet ended up selling (opens in a new tab) all its TOMB tokens at a for a net loss of 2.3 million FTM.
Conclusion
The connection between the Fantom Foundation and Harry Yeh's Tomb Finance reveals a complex web of vested interests and potential conflicts. The Fantom Foundation's decision to lend 10 million FTM to Harry Yeh was not just an act of support for a key player in the ecosystem, but also an attempt to protect their own investments in TOMB. This raises questions about the transparency of the Foundation's actions and the motivations behind their financial decisions.
Depreciated Original Article: https://trulyunchained.vercel.app/blog/foundationalconcern (opens in a new tab)
