The past four weeks have been incredibly challenging for not just our community but our entire team. In addition to the relentless pursuit of the exploiter, we have been devising a compensation plan to address the worst-case scenario. The investigation continues, our war room remains active, and we are in communication with legal authorities. While we are committed to recovering the stolen funds, we recognize that this process may take time.

In the interim, we have developed a comprehensive compensation plan and a strategy to continue operations at Sonne Finance.

Current State of Sonne Finance

As you are aware, Sonne Finance does not have a treasury apart from locked veVELO and veAERO positions and protocol-owned liquidity. The value of these assets, approximately $1M including the rebase, is insufficient to fully compensate the victims. However, despite the exploit, Sonne Finance’s core functionalities, including tokenomics and the bribe-reward mechanism, have been operating more effectively than our competitors.

There will be an auction to sell these tokens, to seed initial liquidity of Sonne v2. We believe leveraging our work and experience is our chance to both compensate the victims and build stronger.

The Compensation Plan

Introducing Sonne v2

We are pleased to announce the launch of a new token, SONNE v2.

Similar to LGE, initially 2.5M SONNE will be paired with the funds coming from the veAERO/veVELO token sale (apprx $1M).

1.25M SONNE will be paired with half of the funds on Aerodrome, and the other half will be paired on Velodrome.

The initial liquidity markets will be the same as just before exploit, including VELO markets on Optimism.

Here are the key points:

• Liquidity Distribution: The initial liquidity will be evenly distributed between Aerodrome and Velodrome Finance.
• Compensation for Victims: A total of 22.5M SONNE (v2) tokens will be held in the Sonne treasury on behalf of the victims. Once the protocol demonstrates stability, an OTC deal will be executed. The funds from the OTC deal will then be distributed to the victims of the exploit on a pro-rata basis.

• Token Exchange: Current SONNE holders can exchange their tokens for SONNE v2 at a 1:10 ratio (1 SONNE v2 = 10 SONNE v1), applicable to team tokens as well. No additional tokens will be reserved for protocol growth or team.

• Incentives Distribution: Money market incentives will be split evenly between Optimism and Base markets. Incentives deposited to Aerodrome/Velodrome will be matched in amount.

• Revenue Allocation: 80% of revenue will be distributed to stakers, 10% allocated for security and marketing, and 10% for salaries and growth expenses.

Token Distribution

• 8M — Sonne v1 holders
• 22.5M — Victims of the exploit
• 2.5M — Initial liquidity
• 67M — Rewards and incentives

Enhanced Security Measures

Moving forward, security is our top priority. We will implement the following measures:

• New Money Markets: We will open new money markets funded by the treasury, ensuring no room for human error.
• Renewed Timelock Contracts: All timelock contracts will be renewed.
• Comprehensive Audits: Our code will undergo another thorough audit. Former OP grant will be used in this.

• Integration of Hypernative: From the launch of Sonne v2, we will integrate Hypernative, which can pause markets in the event of a potential exploit and will operate 24/7.
• Future Bug Bounty Program: Once our treasury allows, we will launch a bug bounty program to incentivize the identification and resolution of vulnerabilities.

We are dedicated to not only recovering from this setback but emerging stronger and more resilient. Thank you for your continued support and trust in Sonne Finance.

We are extremely sorry to announce that Sonne Finance (Optimism)has been exploited with known donation attack to Compound v2 forks.

We avoided the issue in the past, by adding the markets with 0% collateral factors, adding collateral and burn them, only then increase the c-factors according to the proposals.

As you might know, we recently passed a proposal to add VELO markets to Sonne.

https://twitter.com/SonneFinance/status/1786871066075206044

We scheduled the transactions on multisig wallet, and because there is 2 days timelock, we also scheduled c-factors to be executed in 2-days :

https://optimistic.etherscan.io/tx/0x18ebeb958b50579ce76528ed812025949dfcff8c2673eb0c8bc78b12ba6377b7

Our multisig execution is not permissionless Base, but permissionless on Optimism.

The exploiter executed 4 of the transactions when 2-day timelock ends for the creation of markets, and after that, executed the transaction for adding c-factor to the markets :

https://optimistic.etherscan.io/tx/0x45c0ccfd3ca1b4a937feebcb0f5a166c409c9e403070808835d41da40732db96#eventlog

https://optimistic.etherscan.io/tx/0x9312ae377d7ebdf3c7c3a86f80514878deb5df51aad38b6191d55db53e42b7f0#eventlog

After the execution of the markets without us noticing, the attacker was able to exploit the protocol for ~$20M with the known donation attack.

https://optimistic.etherscan.io/tx/0x9312ae377d7ebdf3c7c3a86f80514878deb5df51aad38b6191d55db53e42b7f0

Thanks to Seal contributors noticing the issue fast, the remaining ~$6.5M is saved through adding ~$100 worth of VELO to the markets.

https://twitter.com/tonyke_bot/status/1790547461611860182

Sonne team became aware of the issue 25 minutes after the exploit.

After noticing the issue war room has been assembled. Despite not being able to save the funds, the investigation on the exploiter’s identity is still going on.

Related addresses to attacker:

0xae4a7cde7c99fb98b0d5fa414aa40f0300531f43

0x4ab93fc50b82d4dc457db85888dfdae28d29b98d

0x02fa2625825917e9b1f8346a465de1bbc150c5b9

0xbd18100a168321701955e348f03d0df4f517c13b

0x7e97b74252b6df53caf386fb4c54d4fb59cb6928

0xae4a7cde7c99fb98b0d5fa414aa40f0300531f43

0x9f09ec563222fe52712dc413d0b7b66cb5c7c795

0x5d0d99e9886581ff8fcb01f35804317f5ed80bbb

0x6277ab36a67cfb5535b02ee95c835a5eec554c07

We paused the markets as fast as we can to mitigate further damages.

https://twitter.com/SonneFinance/status/1790535383005966554

We are ready to give bounty to exploiter as well as not to commit pursuing the issue further, in case of returning the funds.

We are sincerely sorry about the situation, and we are doing everything in our power and we are in contact with anyone that can help with recovering the funds.

For further information or to coordinate to recover the funds, please visit our project’s Discord.

We’re excited to announce that Sonne Finance is officially joining the Chainlink BUILD program. As a part of BUILD, we aim to accelerate ecosystem growth and long-term adoption of onchain lending/borrowing by gaining enhanced access to Chainlink’s industry-leading oracle services and technical support, as well as incentivizing greater cryptoeconomic security, in exchange for a commitment to provide network fees and other benefits to the Chainlink community and service providers, including stakers.

Sonne Finance has long been an active participant and believer in Chainlink, currently using Chainlink Price Feeds. Our participation in BUILD furthers our integration with Chainlink, with added benefits of priority support from the Chainlink ecosystem, increased access to dApps needing an EVM-compatible lending/borrowing protocol, and stronger incentive alignment between the Chainlink and Sonne Finance communities.

We’re confident that through enhanced support, secure off-chain services, and the backing of Chainlink’s vibrant community, we can accelerate awareness of Sonne Finance and realize the adoption of onchain finance.

Sonne Finance: Fully Decentralized, Transparent, and Non-Custodial Peer-To-Peer Lending

Sonne Finance is an EVM-compatible lending/borrowing protocol that launched on Optimism and expanded to Base. Our mission is to be the prime liquidity market for OP Stack chains and enable cross-chain lending operations. In the future, we strive to provide a solution for collateralizing real-world assets, such as real estate, onchain.

Why We Joined Chainlink BUILD

Sonne Finance joined BUILD to maximize the benefits of security and reliability that Chainlink’s oracle infrastructure provides. As part of BUILD, Sonne Finance will receive key benefits, including access to and integration of Chainlink CCIP and Automation, access to new Chainlink product alpha and beta releases, among other benefits.

In exchange for these services, Sonne Finance will make 3% of its native token supply available to Chainlink service providers, including stakers, over time. These mutually aligned economic incentives enable both communities to support one another.

“We’re excited to join Chainlink BUILD to gain access to industry-standard oracle services, technical support, and a robust cryptoeconomic model that empowers us to build Sonne Finance with greater security assurances. Chainlink is critical for helping to secure our protocol and enable liquidity to flow across the onchain economy. ” — Atakan Yelkovan.

About Chainlink

Chainlink is the industry-standard Web3 services platform and has enabled trillions of dollars in transaction volume across DeFi, insurance, gaming, NFTs, and other major industries. As the leading decentralized oracle network, Chainlink enables developers to build feature-rich Web3 applications with seamless access to real-world data and off-chain computation across any blockchain and provides global enterprises with a universal gateway to all blockchains.

Learn more about Chainlink by visiting chain.link or reading the developer documentation at docs.chain.link. To discuss an integration, reach out to an expert.

About Sonne Finance

Sonne Finance is a decentralized lending protocol for individuals, institutions, and protocols to access financial services. It is a permissionless, open-source, and Optimistic protocol serving users on Optimism. Users can deposit their assets, use them as collateral and borrow against them.

We’re excited to announce that Sonne Finance — the first native liquidity market on Optimism — has integrated Chainlink Price Feeds on Optimism mainnet. By integrating the industry-leading decentralized oracle network, Sonne Finance has access to high-quality, tamper-proof price feeds needed to secure on-chain lending and borrowing activity. This will provide our users with stronger assurances that the prices of assets are highly accurate and up-to-date.

Our initial integration involves the use of the following Chainlink Price Feeds:

• DAI/USD
• OP/USD
• USDC/USD
• USDT/USD
• SNX/USD
• sUSD/USD
• wETH/USD

We chose Chainlink as our go-to oracle solution because its infrastructure is seamless to integrate and time-tested in production. Chainlink already helps secure leading DeFi protocols responsible for tens of billions of dollars in smart contract value, maintaining robust security and high availability even amidst unexpected events, such as exchange downtime, flash crashes, and data manipulation attacks via flash loans.

Sonne Finance is an EVM-compatible lending and borrowing protocol that launched on Optimism. Sonne Finance provides peer-to-peer lending solutions that are fully decentralized, transparent, and non-custodial. Similar to (and based on) existing lending platforms like Compound Finance and AAVE, users will be able to lend any supported asset on our platform and use their capital to borrow supported assets.

In order to help secure collateralization and establish asset borrowing limits, we needed access to fresh asset prices that are supplied directly on-chain in a highly reliable manner. Fair market asset prices should reflect a volume-weighted average from all trading environments. Thus, we needed to make use of an oracle network to fetch aggregated price data off-chain and deliver it on-chain to be consumed by our application.

After reviewing various oracle solutions, we integrated Chainlink Price Feeds because they provide a multitude of critical features such as:

• High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators, leading to price data that’s aggregated from hundreds of exchanges, weighted by volume, and cleaned of outliers and wash trading. Chainlink’s data aggregation model generates more precise global market prices that are inherently resistant to inaccuracies or manipulation of any single or small set of exchanges.
• Secure Node Operators — Chainlink Price Feeds are secured by independent, security-reviewed, and Sybil-resistant oracle nodes run by leading blockchain DevOps teams, data providers, and traditional enterprises. Chainlink nodes have a strong track record of reliability, even during high gas prices and infrastructure outages.
• Decentralized Network — Chainlink Price Feeds are decentralized at the data source, oracle node, and oracle network levels, generating strong protections against downtime and tampering by either the data provider or oracle network.
• Reputation System — Chainlink provides a robust reputation framework and set of on-chain monitoring tools that allow users to independently verify the historical and real-time performance of node operators and oracle networks.

“Chainlink is by far the leading oracle of DeFi, and highly trusted among all of the ecosystem contributors. It’s not a choice to work with Chainlink services, but a must.” — Atakan, Co-Founder of Sonne.

About Chainlink

Chainlink is the industry-standard Web3 services platform that has enabled trillions of dollars in transaction volume across DeFi, insurance, gaming, NFTs, and other major industries. As the leading decentralized oracle network, Chainlink enables developers to build feature-rich Web3 applications with seamless access to real-world data and off-chain computation across any blockchain and provides global enterprises with a universal gateway to all blockchains.

Learn more about Chainlink by visiting chain.link or reading the developer documentation at docs.chain.link. To discuss an integration, reach out to an expert.

About Sonne Finance

Sonne Finance is a decentralized lending protocol for individuals, institutions, and protocols to access financial services. It is a permissionless, open-source, and Optimistic protocol serving users on Optimism. Users can deposit their assets, use them as collateral and borrow against them.

Website: https://sonne.finance

Discord: https://discord.gg/sonnefinance

Users who deposit USDC into the LGE contract at any time during the LGE will be apportioned a proportional share of the LGE regular allocation. (3,2% of the total supply of SONNE)

As an additional incentive, users who deposit during the first day will be apportioned a proportional share of the LGE bonus allocation. (0,3% of the total supply of SONNE)

50% of the token rewards will be instantly unlocked. Other 50% will be unlocked linearly in 6 months.

Claimable SONNE will be based on share of the total deposits at the end of the bonus period. There is no front-running and being first or last to deposit for either distribution doesn’t matter.

After the LGE event ends, 3,5% of the total supply of SONNE will be claimed by users who participate in the event.

The entire USDC proceeds from the LGE, along with 2,5% of total supply of SONNE will be used for the SONNE/USDC pair on Velodrome.

With these conditions, LGE participants will receive 28% more tokens than they paid for.

(For example, if you participated with 100 USDC, you’ll receive 128USDC worth of SONNE tokens at launch.)

The LP tokens received by the LGE contract will be locked in the LGE contract for a minimum of 180 days, ensuring plenty of early liquidity. After the lockup period ends, LP tokens will be transferred to the protocol reserves, where the strategy for their usage will be at the discretion of governance.

LP tokens will be staked on Velodrome to earn VELO. 80% of the earned VELO will be distributed to SONNE stakers.

How to participate

There will be a “LGE” tab in the main website. (https://sonne.finance)(link is not live at the moment.) You can just click “deposit USDC” and it will be done. Follow our Discord channel for further information.

(Sonne Finance Discord)

Why LGE?

We believe that DeFi should be fair for everyone, therefore we wanted to stay away from presales, seed investments or venture capitals.

We also didn’t want bots to have an unfair advantage. Because of that, we didn’t want to go for IDO.

It will be a cozy launch without rush, and it will be fair for everyone who participates in the event.

Target for launch is next week. Follow Discord announcement for further information.

Join us:

Twitter: https://twitter.com/SonneFinance

Discord: http://discord.gg/sonnefinance

Docs: https://docs.sonne.finance/

Telegram: https://t.me/SonneFin

Overview

Sonne Finance is the first native lending and borrowing market on Optimism based on Compound Finance, with a unique bribe-reward tokenomics.

Goals

DeFi activity on Optimism started to gain traction and we believe it has huge potential going forward.

We have 2 main aims:

• Gather TVL to Optimism with great yields without impermanent loss.
• Be the prime liquidity market with competitive incentives compared to other money markets thanks to being native.

Sonne Finance will have no governance at start, instead it has revenue generating token earning the platform fees and VELO rewards that are coming from Velodrome Finance. (See documentation for further information.)

(How bribing works) (Staking and revenue sharing)

Utility

Sonne Finance is generating revenue through different reserve factors for different pools when users borrow from the liquidity markets. 80% of this revenue goes to sSONNE stakers.

Also, Sonne Finance introduces a unique bribe-reward mechanism leveraging Velodrome Finance for SONNE/USDC liquidity. In short it can be explained in these steps:

1. Sonne bribes VELO stakers.
2. $SONNE goes to VELO holders.
3. VELO holders vote for SONNE/USDC
4. SONNE/USDC LP farm APR on Velodrome increases.
5. Sonne stakes LP from LGE on Velodrome to earn VELO. Sonne Finance distributes 80% of the VELO rewards to sSONNE stakers.

sSONNE stakers will both get the revenues from Sonne Finance and VELO tokens.

Liquidity Generation Event (LGE)

The SONNE token launch will be one of the fairest of DeFi, and it will be based on TAROT token liquidity generation event.

Participants will put USDC into our LGE contract, it will paired up with 2,500,000 $SONNE. The initial liquidity will be locked for 180 days, ensuring early deep liquidity.

Users who deposit USDC into the LGE contract at any time during the LGE will be apportioned a proportional share of the LGE regular allocation. (3,2% of the total supply of SONNE)

As an additional incentive, users who deposit during the first day will be apportioned a proportional share of the LGE bonus allocation. (0,3% of the total supply of SONNE)

Claimable SONNE will be based on share of the total deposits at the end of the bonus period. There is no front-running and being first or last to deposit for either distribution doesn’t matter.

Visit docs for further information.

Launch Airdrop

The launch airdrop will target the following:

• Velodrome Finance users (veVELO holders included.)
• Sonne Finance Discord members
• First week sSONNE stakers

The airdrops will be claimable in https://sonne.finance after launch. Further details will be announced in Sonne Finance discord channel in the coming days.

Links

Twitter: https://twitter.com/SonneFinance

Discord: https://discord.gg/SonneFinance

Docs: https://docs.sonne.finance/

Telegram: https://t.me/SonneFin