1. Restoring Impacted Margin Accounts:
   1. Equitable Distribution of Frozen Protocol Losses:
      1. To address losses stemming from the protocol exploit, we will initiate a fair distribution of these losses across the protocol's community (socialized losses).
      2. By adding specific instructions into the contract and removing funds, users will be able to efficiently withdraw their funds through a dedicated redemption interface.
      3. While assessing spot positions as they stand, we will evaluate perpetual positions (perps) based on their value at the time of contract freezing.
   2. Calculation of Outstanding Funds:
      1. Following the loss distribution snapshot, work will be undertaken to determine the remaining owed funds.
      2. A debt token will be issued to impacted users at time of IDO, representing the dollar amount deficit for a user after socializing losses. This token will be redeemable for USDC generated from protocol activity.
   3. User-Centric Fund Allocation Priority:
      1. Our foremost priority is to direct funds towards impacted users, underscoring our dedication to rectify their financial losses.
2. Audits and Open Source Initiatives:
   1. Audit Approach Post-Restitution:
      1. Following the complete restitution of affected users, our priority shifts to ensuring the utmost security and transparency.
      2. Engaging auditors, Otter Sec and Mad Shield, for comprehensive public audits, reaffirms our commitment to a robust and trustworthy protocol.
   2. Advancing Open Source Protocol:
      1. We are dedicated to fostering collaboration and enhancing the protocol's integrity. The next step involves fully open-sourcing the protocol's code.
      2. This action empowers our community to participate in scrutinizing, refining, and enhancing the protocol's functionality.
   3. Smart Contract Freeze for Audit Completion:
      1. In our commitment to the highest standards of security, we choose to maintain the smart contract's frozen state until both audits and open sourcing are accomplished.
      2. The protocol's resumption will only take place after a meticulous evaluation, ensuring every potential vulnerability is addressed.
   4. Funds Return Preceding Protocol Resumption:
      1. Before unfreezing the protocol, participants of Cypher will have their funds returned to them.
      2. This act reflects our dedication to participants' financial security and well-being.
3. Enhancement of Insurance Fund Size:
   1. Fortify The Security and Longevity of the Cypher Protocol
      1. Upon the successful completion of Steps 1 and 2, allocation of resources to augment the size of the insurance fund, a measure aimed at bolstering risk management and safeguarding the interests of users.
4. Creating a Protocol Treasury:
   1. Continued Development:
      1. After completing Steps 1-3, involving user compensation, audits, and insurance fund reinforcement; remaining funds will establish a protocol treasury, sustaining protocol growth, development, and ecosystem expansion.
      2. This move ensures a dynamic, resilient future, aligning immediate needs with long-term vision. Clear communication with our community remains at the heart of our approach.

We are currently working simultaneously on Steps 1-4 and actively engaging with multiple teams, individuals, and relevant authorities to track and assist in the retrieval of the funds that were exploited. We recognize that the process of fund retrieval is likely to be time-consuming, given its complexity and nature.

In the event that the token launch proves successful and the exploited funds are eventually recovered, we are committed to returning these funds to their rightful owners, in addition to fulfilling all the initiatives outlined above.

AIRDROP

There will be a 50M token airdrop of tokens to those directly affected by the exploit. This airdrop will be executed based on the pro rata amount of a users remaining deficit. We hope this action shows commitment to the individuals who played a pivotal role in the initial success of Cypher. Through these collective efforts, we aim to reaffirm our support for the community and demonstrate our dedication to rectifying the situation.