AAVE DAO votes for 'rescue plan' to save lost tokens
The plan intends to allow developers to recover tokens from certain AAVE contracts and send them to owners who transferred them by mistake.
Some AAVE users who accidentally sent tokens to the wrong address may soon be able to recover them, according to the text of a proposal passed by the AAVE decentralized autonomous organization (DAO) on March 10. The proposal, called “Rescue Mission Phase 1 Long Executor,” authorized AAVE developers to upgrade smart contracts that have been mistakenly sent tokens in the past, causing the contracts to automatically send the lost tokens back to their original owners.
Here’s your chance to join the rescue mission. Vote now https://t.co/JJr6qhTKAv
— Aave (@AaveAave) March 7, 2023
The confirmed proposal only affects lost AAVE, LEND, Tether (USDT), Uniswap (UNI) and staked AAVE (stkAAVE) tokens that were mistakenly sent to the AAVE token contract, the LEND token contract, the LendtoAaveMigrator, or the stAAVE token contract.
It further authorized the team to initialize a new implementation for these contracts. The Aave DAO said that during the initialization, the lost tokens will be sent automatically to a separate AaveMerkleDistributor contract, where they will afterwards be sent to the owners.
The proposal’s text emphasizes that these tokens will only be transferred during the contracts’ initialization phase, stating: “To be as less invasive as possible, these new implementations only include that extra logic on their initialize() function, with everything else remaining the same.” This seems to imply that only tokens lost in the past will be recoverable. Future tokens mistakenly sent to these addresses may be permanently lost unless a new proposal is passed in the future.
Related: Stablecoin adoption could lead to DeFi growth, says AAVE founder
Losing tokens by mistakenly transferring them to a token contract is a common problem in the crypto community. ChainSafe developer Muhammad Altabba has estimated that hundreds of millions of dollars worth of tokens and Ether (ETH) are locked in the Ethereum null address (0x0) and token contracts. One Ethereum user lost over $500 thousand worth of wrapped ETH (wETH) by transferring it to the wETH token contract instead of calling its “unwrap” function as they intended to do.
If a contract cannot be upgraded, tokens lost in this way are usually impossible to recover.
By their nature, crypto transfers are supposed to be immutable. So even if mistaken transfers can be reversed, attempts to do so are sometimes controversial. In 2016, The DAO, an early version of today’s DAOs, was exploited for $60 million worth of ETH, which the investors in the DAO presumably did not intend to happen. The majority of Ethereum validators implemented a hard fork to reverse the exploit transaction, but some validators rejected this move, creating Ethereum Classic in the process.
The AAVE DAO vote to rescue lost tokens passed was not nearly as controversial. It passed with more than 99.9% of the vote. Only 1 user voted against the proposal, using a single AAVE token to do so.
