Timeline Between Iron Bank & Alpha Homora v2

Iron Bank
5 min readJun 7, 2023

It is important that the situation between Alpha Homora v2 and Iron Bank are clear and understood by all parties.

The basis of the working relationship is demonstrated below:

Step 1: A user deposits funds on AHv2, relinquishing custody. In return for locking within the AHv2 smart contract, the user receives interest bearing (ibTokens) as a collateral token. As a result, the user holding ibTokens has a claim against AHv2 for the underlying funds.

(Source: Alpha Homora v2 documentation | Original no longer available)

Step 2: AHv2 deposits funds on Iron Bank. In return for locking within the IB smart contract, AHv2 receives iTokens (iDAI, iUSDT, etc…) as a collateral token. As the holder of these iTokens, only AHv2 has a claim to the underlying funds it deposited on Iron Bank.

Transactions between Iron Bank and Alpha Homora had always been between the two protocols.


In February 2021, Alpha Homora V2 was exploited for ~$37million. This was due to the hacker using an AHv2 pool that no one used and was not publicly announced nor documented. Both Cointelegraph and Rekt.news reported on suspicions of an inside job.

Cointelegraph article
Alpha Venture DAO’s tweet on the attacker
Rekt.news article

More details on the exploit here.

An agreement was then brokered by Andre Cronje on behalf of Alpha Homora v2 and Iron Bank. This agreement was documented on chain, but not signed by either party.

Etherscan link to the agreement

One condition of the agreement was that Iron Bank was unable to liquidate the collateral provided by Alpha Homora v2. Either party has the ability to block any movement of funds.

This agreement allowed Alpha Homora v2 to continue operating, and accepting user deposits, despite being technically insolvent.

15% of the total ALPHA token supply was allocated to the AHv2 team. In September 2021, team allocations began vesting with a lump sum payment of 4% of the token supply. During the time Iron Bank was restricted in liquidating ALPHA collateral, there was no such restriction on AHv2 team members from selling their personal ALPHA allocations. They prevented the selling of ALPHA tokens whenever a party other than the AHv2 team benefited; selling only when it benefited themselves.

Source: Binance Research

Despite this, we continued working together on new opportunities — the first major event was co-launching on Avalanche in October 2021.

Example 1, Example 2, Example 3


13 months after partnering with Iron Bank, AHv2 partners with Mars Protocol & their Red Bank product for the Terra ecosystem. While at the time, not directly competing with Iron Bank, it presented a potential conflict of interest.

Mars blog post

Less than 18 months after the hack, AHv2 started to miss payments; however, the benefit of the doubt was given and Iron Bank worked with them to increase their collateral and rebalance their bad debt.

Collateral was not sold due to an agreement reached between IB and AHv2. AHv2 reaffirms that the ALPHA collateral was not to be sold down (liquidated) to pay off the bad debt in their blog.

AHv2’s blog post

Not long after, AHv2’s bad debt position started to create challenges for Iron Bank. RiskDAO and Iron Bank worked together to ensure proper reporting of Iron Bank’s bad debt position

Risk DAO tweet can be found here

Alpha further reinforced the strength of its partnership with Iron Bank by publicly declaring Iron Bank as their exclusive liquidity source.

(Source: Alpha Homora V2 documentation | Original no longer available)

By the end of July additional action was again needed to rebalance the bad debt

Tweet can be found here

The partnership continued, with a co-launch on Optimism along with Yearn in October 2022.

Example 1, Example 2

The partnership extended to a co-proposal for an Optimism grant that was rejected in large part to AHv2’s code not being transparent and verified. This was also the case prior to their 2021 hack.

Optimism Feedback can be found here

AHv2’s bad debt position continues to cause challenges requiring another debt rebalancing action

Tweet can be found here


Further issues arose with AHv2 paying back their debt. Combined with the drop in value of their ALPHA token, a collateral top up was needed. This was requested on February 14th after a call between Alpha and Iron Bank. This request was ignored, along with a follow-up request on February 23rd. On March 1st, Alpha reached out to have a call the following week.

Roughly 1 week after requesting an increase in ALPHA collateral, AHv2 launched a money market protocol to become their own liquidity provider instead of Iron Bank, with unclear migration plans. This money market has since been rebranded to Stella.

Tweet can be found here

AHv2 Blog post can be found here

AHv2 was not managing its debt position by missing payments, ignored collateral increase requests and positioned itself to migrate AHv2’s protocol deposits away from Iron Bank. This would leave Iron Bank with the bad debt and collateral that is worth ~10x less then the time of the original agreement and no more fees to even nominally contribute to the debt pay back.

This removes any incentive for AHv2 to pay back their bad debt, which coupled with their recent behaviour, significantly increased the risk to Iron Bank and it’s depositors. Iron Bank therefore paused AHv2’s protocol lending accounts to prevent AHv2’s accounts from withdrawing into negative balances at the expense of other depositors such as Yearn, Keep3r, Curve (amongst others like daily users).

Iron Bank paused the markets with this Tweet

Additional rationale with this Tweet

Iron Bank later unpaused non-Ethereum markets with this Tweet

Iron Bank later suggested using collateral for USDC/DAI markets but this was rejected by AHv2 because of their belief this meant the entire debt was paid in full.

We encourage AHv2 to make good on its debt.