Hector Network Votes to Liquidate $16M Treasury Following Multichain, Fantom Losses
The Hector Network voted Monday to liquidate its $16 million treasury and distribute the proceeds to HEC tokenholders.
The vote likely marks the beginning of the end for Hector DAO, the Fantom blockchain-based fork of Olympus DAO that suffered major losses this month due to bridge provider Multichain’s collapse.
Since July 6, Hector’s HEC token has lost 60% of its value; its TOR stablecoin is trading at 13 cents. The treasury may have suffered an $8 million loss due to Multichain-linked stablecoins losing their pegs, according to one investor estimate.
“Hector Network has suffered significant damage to its ability to operate,” a community manager with the screen name MayoMyke wrote in the project’s Discord on July 14.
Tokenholders were given two options: liquidate and distribute the treasury’s remaining assets or migrate to a different blockchain, rebrand and rebuild. They soundly rejected the migration plan in a lopsided vote that ended at noon Monday.
Hector now plans to redistribute the proceeds of its treasury to HEC holders proportionally and based on their positions as of July 14. The final amount distributed could be lower than $16 million, as “all contractual, statutory and other legal obligations, including costs of the liquidation, must be fully settled,” first, according to the plan.
The redemption hands what may be a pyrrhic victory to activist investors who for months hounded Hector with demands to return part of its once sizable treasury to token holders disaffected with the project’s direction.
They now get what they asked for – a treasury redemption – but Multichain’s implosion, Hector’s alleged mismanagement of funds and a June hack severely drained what’s left over to redeem.
“The mistakes were too many – its scales too large,” said community member BeNOridas, who is not affiliated with the activist investors.
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Hector leadership brushed aside concerns in late May that issues at Multichain could impact the project. But confirmations the bridge’s CEO was arrested in China and the unexplained transfers of $130 million in assets decimated confidence in Fantom’s stablecoin market, which largely relied on Multichain.
It’s not yet clear how Hector Network will conduct its liquidation and redemption program, or whether it has a plan to deal with unclaimed assets. Project leadership did not respond to a request for comment.