Dopple Finance’s $KUSD and Synthetic Assets Manual Minting Analysis

https://docs.dopple.finance/twindex/synthetic-assets-tassets/meta-liquidity

Overview

We have summarized the money flow into the following diagram:

The complete transaction details are in the following sheet:

https://docs.google.com/spreadsheets/d/1gmHbhgL9gTghg6xIrB5CoY9--SbldYY8qO_uhDjgO9k

The details have been summarized as follows:

Manual Minting of $KUSD

With the minter role, the deployer minted 1.6M $KUSD for itself without any asset to back for the value of the minted token. Whereas in the normal case, $USDC and $DOPX are required for the minting of $KUSD.

Liquidity Provision for Synthetic Asset Pairs

The LP token gained from the liquidity provision were then burned by sending them to the null address.

1,563,011.74 $KUSD was used in the creation of Meta Liquidity from the total of 1,600,000 $KUSD minted.

This creation of liquidity without any backing asset causes other the liquidity providers to gain less fees, with questionable benefits to the platform users.

Repeated Redemption and Buyback of $KUSD

The $KUSD transferred was redeemed, and the $USDC from the redemption was used to buy $KUSD from Twindex AMM. The redemption and buying were repeated for several times, moving $USDC from the $KUSD pool to Twindex AMM’s USDC-KUSD pool.

As a result, the $KUSD price on the USDC-KUSD pool was increased. However, the $USDC collateralized by the platform users in the $KUSD pool was drained with unbacked $KUSD. This indicates that the platform owner used the platform users’ funds to manipulate the $KUSD price.

Redemption of Leftover $KUSD and Transfer of Asset to Binance

As mentioned earlier, the $KUSD used was minted without any backing asset. These tokens created out of thin air were used to redeem $USDC with real monetary value, undeniably moving users’ funds from the platform.

$DOPX Inflation from Redemption

Dopple Finance Deployer: Only one redemption action was performed and 7,945,577,379.65 $DOPX was minted from the unbacked $KUSD.

Dopple Treasury: Multiple redemption actions were performed and unbacked $DOPX was minted multiple times as shown in the following transactions:

In a nutshell, 45,924,129,559.04 $DOPX was created out of thin air, resulting in an inflation of the total supply of $DOPX which directly affects $DOPX holders in such a way that the value of the rightfully minted $DOPX was significantly reduced.

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