Recently an issue arose with the SILK earn pool used to facilitate liquidations of SILK that prevented both the withdrawal/deposit of SILK from the Earn pool as well as prevented claiming of rewards which included liquidated collateral and SILK emissions. From our investigation, the issue with the SILK earn pool arose on October 10, 2025 during a period of heightened market volatility and liquidations post Secret Network upgrade. No bad debt accrued during this period of degraded SILK earn pool functionality.
Below is the remediation process to ensure that all depositors into SILK earn are compensated in full and SILK remains stable, such that SILK liquidations are able to process properly:
- The Shade Protocol team redeployed a new SILK earn contract, as well as set all necessary addresses for SILK earn configuration to match that of the old contract.
- Following the redeployment of a new SILK earn contract, Shade Protocol seeded SILK into the new SILK earn contract to ensure that liquidations of unhealthy SILK loans can continue to take place, and ensured protocol liquidation bots are processing these successfully.
- Any SILK used for liquidations will result in the protocol receiving discounted collateral, with which it will sell for SILK and redeposit into the Earn Pool
- New user deposits into the SILK earn pool will be restricted in order to ensure that the redeployed SILK earn contract functions as intended for an extended period of time before opening functionality back up to users. This ensures that if any issues were to arise again in the short term, users would not be adversely impacted. The protocol itself has deposited SILK into the earn pool to ensure liquidations are able to continue processing, and if in the unlikely event any issue with the SILK earn contract were to arise, only the protocol would be impacted. Once the team has seen an extended period of resumed functionality, the protocol hopes to open up deposits to users again.
Through the remediation process detailed below, Shade Protocol will distribute the discounted collateral as well as SILK deposits to previous SILK earn depositors along with an additional buffer amount of SILK to ensure all users are made whole.
User Remediation Process:
Users will need to visit the Shade app and click the support widget in the bottom right corner of the screen to create a support request with the following details:
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Type “Request” in the search bar, and then click “Submit a Request” at the bottom of the support widget.
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For the summary field, input “Silk Earn Remediation”
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For the description field, copy/paste your Secret Network wallet address and SILK earn query permit into the description field
- Users can copy their SILK earn query permit by visiting app.shadeprotocol.io/utilities/permits and clicking “copy” at the top of the page where it states “Copy SILK Earn Permit to Clipboard”
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For the email field, users can input any valid email address (this is a required field for generating a ticket). If users do not wish to be updated about their claim with a tx hash when rewards are sent out, they can input a temporary email address.
Once this information is sent to Shade Protocol support, positions will be promptly verified including the previous SILK earn deposit amount as well as the amount of discounted collateral received pro rata from liquidations prior to the SILK earn bug emerging.
Once verification is complete, users will be sent their discounted collateral received from liquidations, SILK earn deposit, as well as an additional buffer amount of SILK to ensure users are made whole on their original position. These funds will be sent to the wallet address attached to the support ticket.
The Shade Protocol team wishes to extend their greatest appreciation for your collective patience in resolving this issue, and thanks you for your continued support.
- Shade Protocol Contributors