LunarDAO Firn Statement

LunarDAO & Firn

LunarDAO in its first investment round invested $45k worth of Ethereum ($1891.95 USD/ETH = 23.784ETH) into Firn Protocol in exchange for $67,500 worth of $FIRN token ($14.33 USD/FIRN = 4710 $FIRN) locked in an escrow contract 0xF6c9D03b76B845f6e3B9AbA22af4fB51856a58A6 for one year. The proposal labeled as LIP-0003 was executed on June 7th 2023, in the midst of bear winter. LunarDAO was one of the first Firn investors at that time, and it helped the project to get an audit by Blocksec. Adding the social spaces for Firn advertisement, it's fair to say that LunarDAO was an important milestone in early days of Firn development.

The squad didn't do it solely for monetary profit. There had been a research done prior to the proposal to find the best project to fill the vacuum after the Tornado Cash incident and Aztec ended their activity. Firn, their niche solution, and a humble team was found to be the most fitting. After price negotiation, proposal and voting, the investment took place. A year later the token was un-vested appreciating 237% profit.

As we can see on Etherscan, there was only a tiny amount of treasury FIRN RageQuited (withdrawn) by the members since the unlock, which proves a trust towards Firn Protocol team and support of squad wealth philosophy promoted by LunarDAO.

This relationship led us to collaborate with Firn devs on a new primitive, allowing anonymous donations on ETH LIP-005. Donations for DarkFi R&D was supposed to be the first implementation of this model.

Bitter News

In the recent days Firn Protocol shared two concerning announcements. In a post on August 26th Firn shares: "...thanks to @zachxbt's diligence, and to prompt actions on our part, we were able to freeze and recover about 80 ETH of funds deposited by the attacker". This message is followed by another one on August 30th, stating that Firn is closing down:

"I have made the difficult decision to begin winding down Firn. as recent events (see quoted tweet) have made clear, the personal risk to me—i.e., @captainmcateer—of continuing to singlehandedly run, host and manage Firn is simply too great. I have transitioned http://firn.io to be a withdrawal-only service. I will continue running the relay, in order to facilitate withdrawals, until the end of this year. I have readjusted liquidity, so as to create a uniform buy wall at the fixed cashout rate of 0.0014 ETH / FIRN."

Firn is closing down overnight, without any communication with any members of LunarDAO Squad - an initial, decentralised, community based and philosophy driven supporter of the project. The early loyal token holders price at the time of writing is $3.30, a DAO bag of FIRN token going down from almost $170k to $15k, without a word.

LunarDAO Position

We are not here to judge what's behind @captainmcateer's statements. We saw them as allies in pursuit of privacy and anonymity and wished them to be succesful. Neither are we in favour of malicious actors stealing funds from others. Unfortunatelly in pursuit to play it "safe", LunarDAO Squad ended up in a position of de facto being fooled by the people who acted according to the best intentions. One has to count that unpleasant conditions will come, especially in the dangerous land of privacy and anonymity development. This is why we build this technology in the first place, to protect individuals from the threats imposed by mass surveillance, allowing for forests of autonomy and freedom.

Secondly we are against centralised control. Web3 is about distributed governance, sovereignty and trustless tech. To be able to "freeze funds" on a protocol level without any decentralized and democratic governance is a fragile system, in opposition to fundamental principles of LunarDAO. Well audited tech and user education should be the way to prevent such attacks.

Third, the part about a stolen money by a cofounder in 2022 was never shared with any of us:

"I must recall an event that happened two years ago, which some already know. in late 2022, an initial cofounder of Firn—who was promptly removed from the team—embezzled about half of Firn's initial fundraise into his personal control, without my knowledge, permission or consent.

We would like to bring transparency to these events, decisions and future of our aliance and invite Firn developers to a public space, to explain this to the community.

Conclusion