Slashing Penalty on Vesting Wallet Changes

(1) Introduction and Objective

K9 Finance DAO proposes implementing a slashing penalty for vested users who need to change their receiving wallet in the vesting contract. Users have requested wallet changes for various reasons, including losing access to their original wallet, forgetting the wallet they used, and wanting to move their wallet for privacy, among others.

Changing vesting wallets requires the multisig wallet owners to convene and involves significant time and effort from skilled smart contract users to ensure the changes are made safely. Additionally, there is a risk of errors with each change. The terms and conditions of owning KNINE tokens state that the responsibility for one’s wallet lies with the user and not with K9 DAO. While the DAO aims to be helpful to all users, it is necessary to acknowledge the time and precision these actions require and solve for operational efficiency

(2) Benefits to K9 Finance Community

This proposal offers several advantages to the K9 Finance community:

  • Operational Efficiency: Reduces the time and effort required from the multi-sig and smart contract users by discouraging frequent wallet change requests.

  • Security: Minimizes the risk of errors associated with changing vesting wallets.

  • Resource Allocation: Ensures that the DAO’s resources are used efficiently and effectively.

  • Community Benefit: The penalties collected will be used for purposes that benefit the community, such as burns, additional liquidity, and marketing opportunities.

(3) Proposal Details

(a) WHAT

The DAO proposes the following penalties for requesting wallet changes to the vesting contract:

  • Q3: 10% penalty
  • Q4: 20% penalty
  • Onwards: 35% penalty

The penalty will be applied to the total unclaimed holdings from the user’s vested wallet. The tokens received through the penalty will be placed in the k9safe.eth DAO wallet, and the community will collectively decide on their use. Potential use cases include:

  • Burns
  • Additional liquidity
  • Marketing opportunities

(b) WHO

The stakeholders impacted by this proposal include:

  • Vested Users: Those who request changes to their receiving wallets will be subject to the proposed penalties.

  • K9 Finance DAO Members: All KNINE holders will benefit from the improved operational efficiency, security, and the DAO potentially acquiring more tokens from vested users

  • Management Council: Responsible for overseeing the implementation of the penalty system and ensuring alignment with DAO goals.


The implementation will occur on the operational layer with the k9safe.eth multisig and with the management council members receiving vesting change inquiries

(d) WHEN

The proposed timeline for the project is as follows:

  • Approval: Next Roundtable meeting.
  • Implementation: Within one week of approval by the dev/management team of K9 Finance DAO.

(e) HOW

The resources required for this proposal include:

  • Technical Support: Skilled smart contract users to implement the penalty system within the vesting contract.

  • Community Involvement: Feedback and participation from the community to refine the proposal and decide on the use of collected penalties.

(4) Impact Assessment

The potential impact of this proposal on the K9 Finance DAO ecosystem is significant:

  • Short-Term: Reduced frequency of wallet change requests, leading to increased operational efficiency and security.

  • Long-Term: The penalties collected can be used to benefit the community through burns, additional liquidity, and marketing opportunities, thereby supporting the long-term growth and stability of K9 Finance DAO.

  • Risks and Uncertainties: There may be user dissatisfaction with the penalties, which will be mitigated through clear communication and community engagement. It is clear in the terms and conditions that user wallet management is their responsibility. While K9 DAO has tried to fulfill all requests thus far, it is believed that this is a healthy balance to reduce these requests and to have a benefit for the DAO when and if the requests do occur.

Metrics for success include a decrease in wallet change requests, efficient implementation of the penalty system, DAO potentially earning KNINE tokens, and positive community feedback on the use of collected penalties.


I appreciate the need for security and efficiency in changing vesting wallets, and I share some of the concerns mentioned. It does seem unusual for many users to frequently change wallets, which might suggest attempts to conceal activities. Losing access to a wallet should be rare, and the penalties seem justified in most cases. Given the significant resources involved, it makes sense for users to bear the cost. The proposed solution of directing the penalty fees to the community is a reasonable and fair approach.

Thumbs up from me :+1:


Support this 100%
Awesome explanation :clap:t4:


100% in support also,


I support this proposal :100:


I see both sides of this issue. One one hand, as stated, the investors are responsible for their wallet accesses and making sure they are organized and all that. On the other hand, making changes takes time, efficiency, and accuracy to accommodate.

I suggest a middle ground. We want everyone to be responsible, yes, but life does happen (I’ve lost access to wallets a couple times myself).

Middle ground:
1st time: 10% penalty
2nd time: 25% penalty
3rd time: 50% penalty

3 strikes you’re out. No more changes after the 3rd time.

This removes the Quarterly schedule and moves it to a 3 strikes and your out policy. The terms were clear, so the fact that the team is willing to bend shows they have heart, but at some point, you have to make people fully responsible for their own actions (or lack there of).

IMO, it makes the most sense to put the penalty funds directly into the liquidity of the project. Seeing as the DAO voted to lower taxes, there is no dedicated burn mechanism, and we already have a marketing budget. We’ve already reached out to 3rd parties to help with liquidity, so my focus would be to get liquidity where it needs to be as fast as possible. This seems like a perfect opportunity to say thank you to seeds and KOLs that can’t keep their wallets in order and benefits the chart during price action.


This is reasonable! I support this proposal! :+1:


I support as is, and could get behind Couches suggestion for the 3 strikes penalty as an alternative as well. Either way reinforces personal accountability and that is a good thing in my opinion.


As rightly said - it is holders responsibility to ensure safety of their assets and their wallets.
Ideally the DAO members shouldn’t be taking on any extra risk due to individual member’s circumstances.

Having said that, I would add a single cut-off date for Q3 and Q4 and 2025 changes - so all change requests must be submitted by that date and will be executed by the Devs in a single multisig transaction (3 in total).

That will minimise their workload and the risk of meddling with the contract too many times.

Any requests received after the cut-off date will move to the next quarter (or in case of 2025 cut off date - will not be entertained). People have enough time until then to ensure their wallets are safe and sound and should refrain from risky activities.

Safety procedures to verify ownership must be in place to ensure no fraudulent requests are executed.

No One has spoken.:vulcan_salute:t3:


I support this proposal :100:


I love it! Seems like a great idea! Well written


Now I have a small issue.

It appears that bad actors would be able to create a means of a social hack to gain access to another’s rewards. So my new question is: How do you prove you are the wallet holder? What policies are set in place for wallet changes? What are the steps for recovery? This is all something new to me, as I am not in the vesting pool yet, but this has become a major concern.

While having a slash on the returns generated is fine with me as a penalty, it has me concerned about the safety of my vestiture being held in the hands of customer service representatives. How does one know if their reward wallet has been changed? how are they notified of the changes? What if someone were to take my wallet address and claim to be me? How would I know this change was made?

And on the flip side: If K9 were to be compromised, either through a credential hack access to admin privileges, or machine code injection that exposed a 0-day to make changes, what policy is put into place for such surprises?


Changes like this can only be made by the multisig, so there’s no single point of failure. Additionally, anyone who has made this request in the past or makes it in the future has to verify ownership of the wallet in question with an on-chain transfer. Due to these factors, the risk is very low for any sort of compromise like you’ve outlined.

The real issue is the time it takes for the dev team and multisig holders to confirm, review, and make these types of changes, which brings us to this slashing proposal.


35% seems steep, this is a tough one for me but something should be in place to encourage better self management of personal assets.


Yes is my vote, the quicker they move to change wallet, the lower the penalty.

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I fully support this proposal.

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