Announcement from the Kassandra Core Team

A Transparent Overview of Kassandra’s Current Challenges and Next Steps

5 min readAug 3, 2024

A Brief History of Kassandra

Kassandra was conceived around 3 years ago, with a mission to empower individuals by providing a decentralized platform for managing investments without the need for traditional financial intermediaries.

Our journey began with the introduction of V1, featuring social pools on the Avalanche network. This initial version laid the groundwork for our more advanced V2, which allows anyone to create and manage decentralized portfolios.

Our development has been transparent and continuously updated on GitHub, and anyone can track and verify how committed we have always been.

Despite these advancements, one of our most significant challenges has been gaining substantial traction. The lack of user engagement with the platform (not the token) and market penetration has been a persistent issue, impacting our ability to fully realize the project’s potential.

Additionally, our operational funds have been depleted over the years without achieving the revenue necessary to sustain our activities, adding another layer of difficulty to our efforts.

Throughout this journey, the Core Team has never sold any tokens, neither for personal profit nor to sustain the project. We have always believed that selling tokens and potentially harming the community with the consequent drop in price was neither a sustainable nor an honest way to manage the project. The integrity of our holdings can be verified on the leaderboard, reflecting our commitment to the project’s long-term success and our alignment with the community’s best interests.

The Governance “Attack”

Recently, a governance proposal initiated by a single wallet led to the unauthorized transfer and subsequent sale of all 2,268,000 KACY tokens from our DAO Treasury, significantly impacting the market price and trust within our community. This event occurred unnoticed by both the Core Team and the broader community, highlighting a serious lapse in our governance oversight.

We acknowledge that this oversight is a reflection of insufficient engagement from both the community and the Core Team. This incident essentially stems from a deeper, more persistent issue: the project’s lack of traction since its inception. Like many startups, we have faced numerous challenges, and despite our best efforts, we have not achieved the success we aimed for.

As developers and significant stakeholders in Kassandra, we recognize our responsibility in this failure.

Addressing the Financial and Trust Damage

The unauthorized transfer and sale of 2,268,000 KACY tokens have severely damaged both the financial stability of our community and trust in our project.

Our Action Plan

After extensive internal discussion and analysis, the Kassandra Core Team has determined the following course of action:

1. No New Token Creation
We have decided not to create a new token for several reasons:

The Kassandra protocol and platform are fully functional, with no compromise in managed pools or governance.
Creating a new token solely to eliminate the approximately 100k KACY held by the attacker in a 45-day locked pool would require extensive effort. Most users’ tokens are not in wallets but in contracts such as staking or LP, complicating the process of determining fair distributions.
The protocol relies heavily on KACY, and changing permissions would require governance proposals using the old KACY, adding to the complexity.
We concluded that the effort required to create a new token outweighs the benefits.

2. Buyback and Liquidity Provisioning
We have secured approximately $12,000 from KACY liquidity, which was safeguarded before the attacker could impact this reserve. Our plan is to utilize these funds to conduct a controlled buyback of KACY tokens and to add liquidity to the market. This initiative aims to stabilize and possibly elevate the market value of KACY, providing a more favorable exit point for those community members looking to liquidate their holdings. We anticipate this process will take up to 60 days, allowing ample time for those with tokens in locked pools to access and sell their holdings if they choose. Additionally, to ensure long-term stability, the added liquidity will be burned, meaning it will be permanently locked and made inaccessible, thereby remaining in the platform and protocol indefinitely.

3. Allocation of Core Team Tokens for Future Incentives:
The Core Team will make available all 2 million of our foundation reserved KACY tokens to be used for future incentives and campaigns. Currently, we believe it is best to maintain these funds in a multisig wallet controlled by the Core Team for security and control reasons. If the community wishes, we are open to discussing transferring these funds to the DAO treasury. This would increase community control but requires careful consideration to prevent issues like the recent unauthorized transfer. We emphasize that shifting these tokens to the DAO should be approached with stringent governance improvements to safeguard against similar incidents in the future.

4. Future of Kassandra
This is not the end for Kassandra; in fact, we see it as a new beginning. The Core Team remains committed to actively maintaining the platform, both frontend and backend, and will continue to cover all associated costs. We hold a substantial amount of KACY and believe in the project’s potential for recovery and future success. Moreover, we view this as an opportunity to genuinely transition Kassandra into a community-led project. We will explore new ways to facilitate community involvement in both the technical and business development aspects of the project. We need your active participation to propose and refine these ideas.

Conclusion

While many in the Kassandra community have suffered due to recent events, it’s important to acknowledge that there is a substantially larger issue at hand — the lack of traction.

The proposed plan aims to mitigate the financial damage to all affected parties. However, it does not resolve the current state of the project.

Let it be clear, the project will not die. The platform will remain operational, and the core team will continue to seek applications and managers interested in using it.

However, there are absolutely no guarantees of token appreciation.

All of you who were affected by this incident effectively bought a lottery ticket in hopes of the project’s success, and unfortunately, this ticket did not win. It’s a common outcome; most startups and initiatives do not succeed. However, we do not want this to happen again.

Moving forward, I invite all those who see Kassandra as a passive way to get rich — those who only complain and blame others — to sell their tokens as part of the buyback process.

From this point on, I expect those who choose to keep their tokens to take an active role in the success of the protocol, contributing both on the technology and business sides.

It must be clear that from now on, we need to function as a community. While there is no money to cover costs, all of us — whether core team members or community — are here because we are significant stakeholders seeking the platform’s success.

And everyone who remains should be prepared for both failure and success.

About Kassandra

Kassandra is a decentralized autonomous organization (DAO) asset management platform that simplifies creating and investing in tokenized portfolios. It utilizes Balancer Labs Managed Pools and offers a unique approach compared to other asset management platforms.