Proposal #28
Referendum #130

[Democracy] Public proposal #28

[Deleted Account]
Democracy
5d ago
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0%Aye
Passing thresholdSuperMajorityApprove
100%Nay
Aye
230.72PHA
Nay
669.9KPHA
Turnout
111.88KPHA
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0PHA
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Due to technical constraints, I was unable to edit the proposal before the voting phase. Therefore, I would like to provide the following clarifications in this comment

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System-Generated Address Error: Urgent Recovery Request for 8,849 PHA

The Technical Situation

When I attempted to make a transfer using the Phala dashboard, a critical system behavior issue occurred. Instead of protecting users by rejecting an invalid cross-chain transfer (KSM address G4bsXhKHQ4v1o5TRdqRfB2Crvau8qSWAoNcfgKKgDYhs7St ) , the system automatically generated a Khala address linked to this KSM address and locked 8,849 PHA tokens in this inaccessible location.

Original Address (41x1etEFF1Lc7vLnErX1sqSYyco3iTfXLruFiewnqmNH6n5X)

Attempted transfer to KSM address (G4bsXhKHQ4v1o5TRdqRfB2Crvau8qSWAoNcfgKKgDYhs7St)

System auto-generated Khala address (44757Jrc3YZGPSQSnYU6EQU6xWb8fy55T8tHtpKkeACMjxAU)

8,849 PHA now locked in inaccessible address

The following evidence demonstrates this is a system-level issue:

  • Original transaction: https://khala.subscan.io/extrinsic/3630637-15
  • KSM address involved: G4bsXhKHQ4v1o5TRdqRfB2Crvau8qSWAoNcfgKKgDYhs7St
  • System-generated Khala address: 44757Jrc3YZGPSQSnYU6EQU6xWb8fy55T8tHtpKkeACMjxAU
  • Amount locked: 8,849 PHA tokens
  • Return address: 41x1etEFF1Lc7vLnErX1sqSYyco3iTfXLruFiewnqmNH6n5X

System Error vs User Error

This situation demonstrates a system-level flaw rather than user error for several reasons:

  1. The system should have rejected the invalid cross-chain transfer immediately
  2. Instead, it created a new Khala address 44757Jrc3YZGPSQSnYU6EQU6xWb8fy55T8tHtpKkeACMjxAU linked to KSM address G4bsXhKHQ4v1o5TRdqRfB2Crvau8qSWAoNcfgKKgDYhs7St without warning
  3. The system then accepted and processed a transaction that should have been impossible
  4. The tokens are now locked in an address that no one - not users, not developers, not even the system itself - can access

Step-by-Step System Behavior

The full technical sequence shows how the system created this unrecoverable situation:

  1. Initial Attempt:

  2. System's Automatic Address Generation:

  3. Result of System's Actions:

    • New Khala address created: 44757Jrc3YZGPSQSnYU6EQU6xWb8fy55T8tHtpKkeACMjxAU
    • 8,849 PHA transferred to this system-generated address
  4. Required Recovery Path:

    • Force transfer from: 44757Jrc3YZGPSQSnYU6EQU6xWb8fy55T8tHtpKkeACMjxAU
    • Return to sender: 41x1etEFF1Lc7vLnErX1sqSYyco3iTfXLruFiewnqmNH6n5X
    • Timeline: Before Khala chain deprecation
    • Method: Governance-approved force transfer

Established Precedent

Other prominent blockchain networks have already established how to handle these situations:

  • Bifrost has officially recognized similar cases as system-level edge cases
  • They have approved force transfers in comparable situations
  • Their approach acknowledges that system-generated inaccessible addresses require governance intervention
  • This precedent shows that recovery is the standard solution for such system behaviors

Critical Timeline and Urgency

The situation requires timely action because:

  • The Khala chain is scheduled for deprecation
  • Once deprecation occurs, these tokens will be permanently lost
  • No recovery will be possible after the chain is deprecated
  • 8,849 PHA tokens will be permanently removed from circulation

Why Recovery is Warranted

  1. This is a documented system behavior issue
  2. The address is provably inaccessible
  3. Similar situations have precedent for recovery
  4. Chain deprecation creates urgency
  5. Recovery prevents permanent token loss
  6. The entire situation is fully verifiable on-chain
  7. No other users are affected by this recovery
  8. The solution maintains the intended token supply

This recovery action serves both individual justice and system integrity, preventing permanent loss from a system-generated error while following established blockchain governance precedents.

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I remain available to answer any questions you may have about this proposal. Please feel free to ask for any clarifications needed in the comments.

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How did you generate the KSM address? Do you have it on a browser wallet, mobile wallet, or a hardware wallet? You may have the access to the fund right now.

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I'm totally suporting this request from an old user of Khala. Kucoin should solve the problem but they refuse to help. So the token would be lost, in this case we should help him to recover his PHA.
Gatorkorps

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Kucoin just don't want to help (but in general they are able to recover those funds).
I'm against forced transfers. But if someone official from Kucoin wrote he accept forced transfer from their account I could vote Aye.
Sadly I don't believe they will do that - as it opens way for violations in future.

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A Solemn Statement to the Phala Community:

I come forward with complete transparency. For two years, I have patiently worked through proper channels to resolve this situation. The French Phala ambassadors support my case, and I have consistently demonstrated my commitment to transparency by sharing my real identity through the Google Drive documentation provided above. I have:

  1. Provided full transparency
  2. Followed democratic processes
  3. Shared verifiable documentation and my real identity
  4. Supplied all evidence
  5. Answered every question
  6. Demonstrated the system error
  7. Shown proof of ownership

These are my tokens. I am not trying to take anything from anyone. The system created an address that no one can access, and this can be verified through the blockchain.

After providing such extensive documentation, including my personal identity, and following every proper procedure for two years, I must ask: Why are some still refusing to help? What are the real motivations behind this resistance when all evidence has been provided and verified?

I have played by every rule, been completely transparent about my identity and claims, and yet still face resistance. This raises serious questions about the true reasons behind this opposition.

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Unfortunately i don't have PHA anymore to support the proposal.

I can understand that chains don't necessarly want to open a 1st case for such events, but it's a the only option here.
Bifrost did it for few rare cases, especially in the early days when cross-chain transfers where in their infancy and when people made mistakes. CEX won't even notice it moreover.
As long as the community agrees to it, on a decentralized chain, it's not anymore on the CEX hand, especially when the CEX acts badly with no intention to help users.

As long as the user can prove the ownership of the origin address and ackowledging that Kucoin won't do anything even if it's technically feasible on their, and considering the chain is going to be halted, i do not understand why we would deny the force_transfer.

I also endorce Laurent on his request to retain his PHA, he's a known user in the eco.

Thomas - Community Lead Bifrost

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A message of gratitude and reflection:

I sincerely thank everyone who supported my proposal. Though it appears headed for defeat, your support means a great deal.

This outcome raises concerning questions about decentralization and governance in crypto:

  • Why refuse a solution that benefits everyone?
  • Why has the Khala team remained silent and not responded to my emails despite their ability to help?
  • Is this truly decentralization when CEXs hold such power?
  • Does "one token = one vote" truly represent democratic values?

This situation reflects broader issues in crypto governance:

  1. Wealth concentration affecting decision-making
  2. Distance from Satoshi's original vision
  3. Centralization despite claims of decentralization
  4. Team unresponsiveness to community concerns

The 8,849 PHA tokens will be inaccessible after Khala deprecation - a loss that serves no one's interests. The lack of response to emails and support requests from the team is particularly disappointing.

Special thanks to the French ambassadors and all who supported transparent, fair governance. ❤️"

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