Stargate Foundation has been advised by FTX liquidators to avoid its DAO (Decentralized Autonomous Organization) from reissuing the STF token. Stargate Finance (STG) token is the native token of the Stargate Foundation.
FTX liquidators believe that reissuing the STF token would cause the automatic stay to be violated, and this can have various legal consequences.
This all started in March 2022, when a crypto trading company named Alameda Research won the STG auction for $25 million. The November of the same year, FTX filed for bankruptcy.
Immediately after these developments, cryptocurrency wallets of both the FTX and Alameda were hacked, and the hackers stole $500 million worth of tokens. All of the assets were transferred to new crypto wallets by the affected liquidators.
After these events, Stargate’s DAO has proposed reissuing its STG tokens to relocate the funds to a secure wallet, and FTX liquidators have opposed the proposal.
Stargate DAO opposed the FTX liquidators and mentioned that reissuing the STG token won’t affect the automatic stay in any way. Stargate tweeted that FTX liquidators have no idea how smart contracts work, and how the foundation will secure its funds without violating the automatic stay.
While exchanges and external parties are doing their best to secure the funds, Stargate Foundation is following the advice of FTX liquidators and stands against the reissuing of STG tokens.
More About Stargate Foundation
Stargate Foundation is a DAO that helps develop new solutions and decentralized technologies. The DAO is completely run on a blockchain and is owned by a community of STG token holders.
STG or Stargate Finance Token is the native token of Stargate Foundation.The token can be staked by its holders in return for interest. The staking process provides the DeFi platform with liquidity. The token is used to process transactions on the blockchain, and can also be used as a governance token to vote on proposed changes and updates to the platform.
As we mentioned above, FTX’s bankruptcy and the successful hacking attempt that followed have raised many questions regarding the security of STG tokens. This is why the foundation has proposed to reissue the STG tokens to move them to a new and secure wallet.
While FTX liquidators have opposed the suggestion, Stargate Foundation stands by its stance of reissuing the tokens.
The whole Stargate dilemma highlights the increased need for clear communication and transparency in the Decentralized Finance sector.
Moreover, the issue also highlights the importance of clear regulations and guidelines to safeguard DeFi platforms and to keep the money on their investors safe. This must be done immediately by every DeFi platform to ensure the safety of their investors.