Hey everyone. It's been quite a few interesting days here on the Hive blockchain. First, we saw HBD go parabolic - all the way up to $3 thanks to a massive pump on Upbit.
Then a few days later, HIVE followed suit - skyrocketing all the way to $1.2 for a short period of time. We've now settled back down to $0.60.
All of this happened just as we deployed the Multi-Token Bridge Protocol and have been making rapid improvements to it.
In this post, we'll talk about some of the challenges we've faced and what we've done to remedy them now and in the future.
Bridge Wrapping Reliability
Ever since the initial launch of the LEO Bridge (starting with Wrapped LEO and evolving into bLEO, pLEO and Multi-Token Bridge Assets), we've had an issue with Wrapping Reliability.
This simply refers to TXs that get "stuck" on the bridge. They can get stuck for any number of reasons, typically the infamous "node issue" is the blanket statement to cover issues like that.
While sometimes it is an actual node issue and sometimes it isn't, the issues typically stem from the oracle trying to send a transaction and that transaction not getting signed properly on-chain. When that happens, the oracle will attempt 1 refund of the TX. If that refund doesn't work within 48 hours, a manual refund must be issued.
We implemented this strategy to ensure that no double spends can ever take place on the Bridge. This is our #1 priority, always. We haven't had a double spend since the first week of Wrapped LEO going live when we had 3-4 double spend TXs and implemented this fix to prevent them. Luckily, those TXs went to true Leo Lions who promptly sent the extra LEOs back to the oracle 🦁
Being that that was ~1 1/2 years ago, things have changed quite a bit.
We are constantly working on the Bridge and making improvements. That being said, improvements are done quietly and with a high degree of caution - for obvious reasons. Security always takes priority.
BSC Multi-Token Bridge
Have you noticed anything about the BSC Multi-Token Bridge?
If you have wrapped or unwrapped HIVE or HBD through our new BSC Multi-Token Bridge connected to https://cubdefi.com, then you may have noticed that there are significantly less-to-no failed wraps.
The launch of the MTB on CubFinance actually coincided with an entirely new Bridge Overhaul update. We tested this update quietly in the background for our BSC branch of the Bridge to see how it performed under the stress of multiple users.
So far, there have been 0 failed wraps for bHBD and bHIVE. This is pretty incredible. It's our newest and best bridge update yet. This update is being pushed as we speak to pHIVE and pHBD and shortly after that, we'll push it to bLEO and pLEO.
Liquidity Issues
Okay here's where we get to the most annoying part of what has transpired in the last week.
Rewind the tape to when HBD went parabolic - mooning 3x overnight to $3 - this caused a massive exodus of both HBD and HIVE from pHBD and pHIVE as users withdrew to native HBD and HIVE so that they could take advantage of the HBD pump by sending it to exchanges.
With HIVE, many withdrew it to do internal conversions on the Hive blockchain as those became extremely profitable.
The Multi-Token Bridge Oracle protocol stakes 50% of the funds and keeps the other 50% liquid for day-to-day unwraps/wraps.
When this happened, the 50% liquid got eaten up immediately - as a liquidity event like this wasn't expected.
The oracle immediately initiated a full powerdown on pHIVE to re-balance to 50% liquid and 50% staked.
It also immediately initiated an unstaking of HBD to re-balance to 50% liquid and 50% staked.
Obviously, HBD didn't have any issues for us since the unstaking time is just 3 days, we had returned to 50% liquid and 50% staked just in time to service the influx of unwraps and arbitrage.
The HIVE, however, is a much different story. HIVE takes 13 weeks to unstake - paying out in 1/13th chunks each week.
We were actually doing fine on liquidity right after the massive HBD event thanks to our off-chain arbitrage. What we didn't expect was right around the corner - HIVE pumped 70% overnight to nearly $1 and this caused yet another exodus into native HIVE.
The oracle was sitting at about a 15% liquid and 85% staked ratio after the HBD event. This meant that it immediately serviced the influx of wraps and was left with 0% liquid and 100% staked in a matter of minutes during the HIVE pump.
There were about 7-10 users who tried to unstake pHIVE to take advantage of the HIVE pump and were unable to get their wrap through the bridge.
There is nothing worse than something like this happening. The oracle protocol was not prepared for a massive liquidity event like this which essentially caused a huge traffic jam during the exodus to native HBD and HIVE.
In response to this - and in preparation for future unpredictable liquidity events - the oracle staking ratio is changing from 50-50 to 20-80 for pHIVE.
HBD obviously is a much smaller unstake time, we're updating the Oracle to ratio this at 40-60 (staked to liquid) and we'll closely monitor how this performs and be ready to make changes.
For any impacted users - we sincerely apologize for this. The PolyCUB DAO launched the Multi-Token Bridge less than ~45 days ago and this liquidity event was a massive learning curve for us to push through. We hope you understand why the oracle protocol was set to keep a % of liquid funds staked and why we're making these updates to ensure liquidity influx events like this are handled better in the future.
The bridge is now returning to normal as powerdowns have started to come in and our internal arb bot repurchases HIVE to deploy additional liquidity.
As a team and community, we just want to say thank you for your patience 🙏🏽 being on the bleeding edge of this technology brings both incredible benefits but also incredible headaches. We've been working as hard as we can to fix all of the issues laid out above and we know that it's not fun to deal with products that don't always function the way you want them to. We're always in a state of evolution and improvement and we appreciate you sticking with us.
Big Week Ahead
As we always love to say - there is a big week ahead. The CUB Multi-Token Bridge has been performing great and we're deploying these updates to PolyCUB's MTB protocol now.
The official release date for LeoThreads has just been announced: August 4th, 2022 (in 2 days).
https://twitter.com/FinanceLeo/status/1554473817031983110
- FinanceLeo
Our team has been working day and night to get the LeoThreads UI built.
This has been 18 months in the making - ever since the words "Project Blank" were uttered. We began building out all of the key infrastructure to make Microblogging possible - Leo Lightning DB, LeoInfra and the LeoFinance UI (both LeoDesktop and LeoMobile IOS & Android).
LeoThreads is microblogging on Hive without top-level posts. This means that you can make 1000 microblogs per day without worrying about autovoters, downvotes, resource credits, 5 minute delays, etc.
True microblogging is coming to Hive. We've worked so hard on this release and we're now in the final stages of polishing the UI with a small team to find bugs and deploy fixes.
We're so excited to roll this out!
About LeoFinance
LeoFinance is a blockchain-based Web3 community that builds innovative applications on the Hive, BSC, ETH and Polygon blockchains. Our flagship application: LeoFinance.io allows users and creators to engage and share content on the blockchain while earning cryptocurrency rewards.
Our mission is to put Web3 in the palm of your hands.
Twitter: https://twitter.com/FinanceLeo
Discord: https://discord.gg/E4jePHe
Whitepaper: https://whitepaper.leofinance.io
Our Hive Applications
Join Web3: https://leofinance.io/
LeoMobile (IOS): https://testflight.apple.com/join/cskYPK1a
LeoMobile (Android): https://play.google.com/store/apps/details?id=io.leofi.mobile
Delegate HIVE POWER: Earn 16% APR, Paid Daily. Currently @ 2.8M HP
Hivestats: https://hivestats.io
LeoDex: https://leodex.io
LeoFi: https://leofi.io
Polygon HBD (pHBD): https://wleo.io/hbd
Polygon HIVE (pHIVE): https://wleo.io/hive
Web3 & DeFi
Web3 is about more than social media. It encompasses a personal revolution in financial awareness and data ownership. We've merged the two with our Social Apps and our DeFi Apps:
CubFinance (BSC): https://cubdefi.com
PolyCUB (Polygon): https://polycub.com
Multi-Token Bridge (Bridge HIVE, HBD, LEO): https://wleo.io