Fairside Network Guidelines and Membership Agreement
WELCOME!
FAIRSIDE NETWORK GUIDELINES AND MEMBERSHIP DOCUMENT
What Is FairSide Network?
It is widely acknowledged that the crypto industry faces significant challenges, particularly in terms of available insurance options. Traditional insurance products may not adequately meet the needs of individuals seeking coverage for crypto-related losses.
However, there is a remarkable, non-insurance alternative that surpasses insurance offerings for the industry: the FairSide Cost Sharing Program.
The FairSide Cost Sharing Program is not insurance. Rather, the FairSide Cost Sharing Program is a groundbreaking solution that leverages the speed, transparency, and efficiency of blockchain technology. It combines the lessons learned from the modern sharing economy to create a robust framework for managing crypto-related losses due to theft of self-custodied assets.
By harnessing the power of blockchain, the FairSide Cost Sharing Program offers a decentralized and community-driven approach. It brings together businesses and families within a network of like-minded individuals who are actively involved in decision-making and taking control of their financial well-being.
Unlike insurance, the FairSide Cost Sharing Program doesn’t transfer risk to a central entity. Instead, it fosters a cooperative environment where community members collectively share the burden of eligible crypto losses according to FairSide’s guidelines. This innovative model embraces the principles of transparency, fairness, and collaboration.
The FairSide Cost Sharing Program recognizes the potential of blockchain technology and by incorporating the best practices from the modern sharing economy, it offers an efficient, inclusive, and flexible solution for managing crypto-related risks.
Through the FairSide Cost Sharing Program, individuals gain the freedom to choose their preferred crypto providers without being confined to a limited network. The platform utilizes blockchain’s inherent transparency to enhance trust and accountability within the crypto industry. Additionally, FairSide Foundation actively advises the members of its cost sharing program in identifying opportunities and provides technical resources.
In summary, FairSide’s Cost Sharing represents a quantum leap beyond the benefits provided by insurance. It capitalizes on the advantages of blockchain technology while incorporating the valuable insights gleaned from the modern sharing economy. By doing so, it establishes a transformative and comprehensive framework for managing crypto-related losses, fostering a new era of transparency, efficiency, and community collaboration.
We emphasize that FairSide’s Cost Sharing IS NOT insurance. To learn more about the benefits of this program, please review the information provided in this document
PLEASE NOTE THAT THE FAIRSIDE COST SHARING PROGRAM IS NOT INSURANCE. FAIRSIDE FOUNDATION IS NOT AN INSURANCE COMPANY, AND MEMBERSHIP IN THE FAIRSIDE COST SHARING PROGRAM IS NEITHER ISSUED NOR OFFERED BY AN INSURANCE COMPANY. THE PROVISION OF MONETARY ASSISTANCE BY THE COMMUNITY ESTABLISHED BY THE FAIRSIDE COST SHARING PROGRAM TO YOU FOR CRYPTO THEFT EXPENSES IS ENTIRELY VOLUNTARY. NEITHER YOU NOR FAIRSIDE FOUNDATION HAS THE AUTHORITY TO COMPEL ANY MEMBER TO PAY FOR COST SHARING EXPENSES.
IT IS IMPORTANT TO UNDERSTAND THAT THE FAIRSIDE MEMBERSHIP DOES NOT FUNCTION LIKE A GROUP INSURANCE POLICY OR AN INDIVIDUAL INSURANCE POLICY. PLEASE NOTE THAT REGARDLESS OF WHETHER YOU RECEIVE ANY FINANCIAL ASSISTANCE FOR CRYPTO THEFT OR WHETHER THE MEMBERSHIP CONTINUES TO OPERATE, YOU, AS A MEMBER, WILL ALWAYS REMAIN RESPONSIBLE FOR YOUR UNPAID CRYPTO THEFT EXPENSES. THERE IS NO LEGAL RIGHT FOR YOU TO SEEK REIMBURSEMENT OR INDEMNIFICATION FOR SUCH EXPENSES FROM FAIRSIDE FOUNDATION OR ANY OTHER MEMBER OR SPONSORING ENTITY.
THIS AGREEMENT DOES NOT CONSTITUTE A LEGALLY BINDING CONTRACT TO REIMBURSE OR INDEMNIFY YOU FOR THE CRYPTO THEFT EXPENSES YOU INCUR. HOWEVER, IT PROVIDES AN OPPORTUNITY FOR YOU TO ASSIST OTHER MEMBERS IN NEED AND, WHEN YOU ARE IN NEED, TO SUBMIT YOUR CRYPTO THEFT TO THE COMMUNITY FOR SHARING, IN ACCORDANCE WITH THE GUIDELINES OUTLINED HERE. ANY FINANCIAL ASSISTANCE YOU MAY RECEIVE WILL COME FROM THE CAPITAL POOL CREATED BY MEMBERS AND/OR CONTRIBUTORS, AND NOT FROM FAIRSIDE FOUNDATION.
TABLE OF CONTENTS
Section
Subject
Page No.
A
The FairSide Concept
4
B
Organization and Membership
5
C
Key Terms and Definitions
6
D
Frequently Asked Questions
10
E
Membership Principles and Guidelines
14
E-1
Overview of Membership Principles and Guidelines
14
E-2
Member Responsibilities
15
E-3
Member Participation
16
E-4
Embracing Generosity and Expanding the Scope of Sharing
16
E-5
Determining Shareable Crypto Losses
17
E-6
Ensuring Equitable Distribution
20
E-7
Eligible Events for Sharing
20
E-8
Binding Decisions
26
E-9
Disputes and Reconciliation
26
E-10
Changes to Guidelines
27
E-11
Distribution of Membership Contribution Fees
28
E-12
Exhibit A
29
THE FAIRSIDE CONCEPT
The FairSide Cost Sharing program is not insurance – so what motivates crypto users to participate in crypto theft cost sharing instead of insurance? The answer is undeniable.
At the core of the FairSide Community is a strong commitment to mutual support and assistance during crypto theft incidents. Just as we naturally come to the aid of our neighbors in times of need, the community cultivates a culture of generosity. As crypto users, we recognize the significance of standing together and offering assistance to those affected by crypto theft. This fundamental principle forms the foundation of crypto theft cost sharing, where members actively contribute to help fellow members in their time of crisis.
Moreover, personal accountability assumes a crucial role within the FairSide Community. In a world governed by laws and consequences, we advocate for recognizing and rewarding individuals who prioritize the protection and welfare of their crypto assets. Just as health-conscious individuals enjoy the advantages of a well-balanced lifestyle across different areas, we believe that a similar principle should apply to the realm of cryptocurrencies. It is inequitable that the existing crypto insurance landscape often favors those who disregard security measures and engage in unnecessary risks, placing the burden of consequences on responsible users. This discrepancy fuels our dedication to rectify the imbalance and foster a more just and equitable system for all participants.
Lastly, the pursuit of freedom remains a cherished human virtue. The FairSide Cost-Sharing Program upholds the value of freedom of choice. We empower our members to make their own decisions regarding crypto wallets, exchanges, and security measures. By preserving individual autonomy, we enable our members to tailor their crypto journey and develop personalized strategies to address security concerns.
The FairSide Cost-Sharing Program is not insurance and, rather, offers a compelling alternative to insurance in this space. It provides the freedom of choice while fostering a collective effort to share crypto loss among its members. The following sections will outline how the FairSide Community operates, equipping you with the necessary information to make an informed decision about whether our crypto cost sharing approach aligns with your individual needs.
ORGANIZATION AND MEMBERSHIP
FairSide Foundation is a Delaware nonstock corporation specifically established to cater to the needs of the crypto industry. The organization was founded in direct response to the inadequacy of options provided by insurance to the crypto industry. Recognizing the unique challenges and risks associated with cryptocurrency and the absence of adequate protection options, FairSide Foundation was created to bridge this gap and provide a platform for members to collectively address these concerns.
As a nonstock corporation, FairSide Foundation’s primary objective is to serve the best interests of its community rather than generating profits for shareholders. This organizational structure aligns with the core values and principles of FairSide Foundation, emphasizing the importance of collaboration, support, and mutual assistance among its members.
FairSide Foundation prioritizes fostering a strong community among its members by facilitating the sharing of their financial needs and providing practical tools for maintaining their security. The FairSide Community actively supports its members through voluntary sharing of crypto losses. This sharing is made possible through the sponsorship of contributors who bond their ETH to the capital pool, as well as membership fees paid to the network. Both sponsoring contributors and active members actively participate in the sharing process. Contributors stake assets to be shared in approved events, while members contribute through an annual fee to be included in the sharing system.
Participating members must adhere to the Guidelines outlined in this document. Membership acceptance is not based on the previous loss experience of the members, although crypto theft prior to membership is excluded from sharing.
KEY TERMS AND DEFINITIONS
Term
Definition
Additional Services
refers to a range of supplementary offerings available to Members which enrich their overall membership experience and which aim to optimize and streamline the costs associated with various services offered by FairSide partners.
blockchain
refers to a distributed database or ledger shared among a computer network’s nodes.
Capital Pool
refers to the collective funds of contributors and Members which is available to support the FairSide Cost Sharing Program. These funds are held by the binding curve and are used to cover the shared losses that meet the Guidelines and are approved by the Core Governance Committee. The capital pool serves as the financial reserve that ensures the FairSide Cost Sharing Program’s ability to support its Members when they experience qualified Loss Events.
Company, We, Us, FairSide Network, FairSide and FairSide Foundation
refer to FairSide Foundation, a Delaware non-stock corporation.
Computer Crime
refers to illegal activities conducted by skilled computer users to gain unauthorized access to crypto wallets and steal private keys or sensitive information contained therein.
Consensus
refers to the process of reaching an agreement or common decision by the Members, the threshold for which is 50% of the Core Governance Committee.
Contributor
refers to an individual or entity that provides financial support to the FairSide community by staking ETH or ERC-20 tokens on the bonding curve which help to bolster the Capital Pool.
Core Governance Committee
refers to the committee formed by FairSide personnel and community members which is responsible for reviewing and interpreting the Guidelines, including with respect to resolving any disputes which may arise with respect to their interpretation.
Cost Sharing
refers to a program by which members of an organization make periodic payments or contributions, which are, in turn, utilized to pay costs for other members upon the occurrence of certain predetermined circumstances. Unlike an insurance program, there is no transfer of risk, and the program is not legally bound to pay requests for reimbursement according to the terms to which parties have agreed to follow.
Cost-Sharing Request
refers to the process for filing for cost sharing assistance from the network of Members.
Cost-Sharing Wallet Address
refers to a wallet address designated by a member to receive payouts.
Crypto Loss Expense
refers to the total expense resulting from a Loss Event.
Cryptocurrency
refers to a digital or electronic medium of exchange that is used and accepted as a means of payment, a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority and is not issued by, or guaranteed by, a central bank, government, or public authority.
dApp
short for decentralized application, a dApp is a software application that operates on a decentralized network, like a blockchain, rather than a centralized server.
Date of Loss
refers to the specific date when a Loss Event occurs.
Delaware Non-Stock Corporation
refers to a type of corporation permitted to be formed under Delaware law which does not issue stock, does not have shareholders and which is required to disclose its non-profit intentions in its Articles of Incorporation at the time of filing.
ERC-20
stands for “Ethereum Request for Comment 20”, a standard for the Ethereum blockchain that requires nine scripting functions and two events that must be used when creating a fungible token within a smart contract.
ETH
stands for “Ethereum”, which is a decentralized blockchain platform that enables developers to build and deploy smart contracts and decentralized applications. ETH is one of the most widely used cryptocurrencies.
FairSide Community
refers to the Members of and contributors to FairSide.
FairSide Cost-Sharing Program or the Cost-Sharing Program
refers to the Cost-Sharing program organized by FairSide for the benefit of its Members.
See definition of “Cost-Sharing”, above.
Guidelines
refers to the set of rules and criteria (included herein) under which Members can participate in the FairSide Cost-Sharing Program, including the rules which determine the eligibility for sharing of crypto losses among Members.
KYC
refers to “Know Your Client”, and are procedures utilized to verify information provided by persons, including their risk and financial profiles.
Loss Event
refers to a fraudulent outgoing cryptocurrency transfer or movement of cryptocurrency from a Wallet or account not initiated by or at the direction of the rightful owner of such Wallet or account leading to the loss of digital assets.
Member
refers to a natural person or an entity that has accepted FairSide’s Guidelines and is eligible to participate in the sharing of crypto losses within the FairSide Community.
Membership Attestation Requirement
refers to the requirement that a prospective Member attest to abide by the required principles and ongoing behavioral code (the form of which attestation is attached hereto as Exhibit A).
Membership Contribution Fee
refers to the annual monetary allotment contributed by Members and which is utilized to support participating Members in the manner outlined in the Guidelines.
Membership Period
refers to the period beginning on the date which a Member has satisfied all requirements for membership in the FairSide Cost Sharing Program and on which the Member formally commences their relationship with FairSide and which runs until the one year anniversary of such commencement date, during which a Member may participate in FairSide’s Cost Sharing Program and is eligible for Additional Services.
Need
refers to a circumstance when an eligible Member experiences one or more shareable crypto losses due to computer crime, surpassing their initial USA.
NFT
stands for “non-fungible token”, which is a unique digital asset that cannot be replicated or exchanged on a one-to-one basis.
On-Chain
refers to cryptocurrency transactions that occur on the blockchain and remain dependent on the state of the blockchain for their validity. On-chain transactions are considered valid only when the blockchain has been updated to reflect the transactions on the public ledger.
Proof of Loss
refers to the crucial documentation or evidence provided by a Member to verify a request for support from the FairSide Cost Sharing Program after such Member experiences a loss which is covered by the Guidelines.
Public Good Company
refers to an organization whose main objective is to provide for the needs of its members within the membership.
RWA
stands for “real world asset”, which are tangible or physical assets in the traditional, non-digital world that are tokenized and represented as digital assets on a blockchain.
Shareable Amount
refers to the amount of Need remaining after a Member’s initial USA which is eligible for Cost Sharing.
USA
refers to the unshareable amount, which is the designated ETH value that a Member retains as personal responsibility for all losses. The USA is calculated separately for each Cost-Sharing Request which is submitted.
Wallet
refers to a device or program that stores cryptocurrency keys and allows a person to access their coins. Wallets include both a public key (referred to as the “Wallet Address”) as well as private keys needed to sign onto cryptocurrency transactions.
Wallet Address
refers to the unique, public string of numbers and letters that can be utilized to send a person cryptocurrency and which is used on the blockchain to verify transactions.
You
refers to the rightful owner of a Wallet, as submitted to FairSide during the Member signup process.
FREQUENTLY ASKED QUESTIONS
Does FairSide Offer Insurance?
No. Members of FairSide are able to participate in its Cost-Sharing Program, but this program is not insurance.
What is a FairSide membership about? The FairSide Cost-Sharing Membership Program revolves around the belief that our Members, in collaboration with their chosen crypto service providers, have a natural inclination to prioritize their own security. They bear the primary responsibility for making their own crypto-related decisions. However, when our Members encounter significant financial burdens resulting from crypto theft incidents that exceed their individual capacity, the FairSide Community is committed to assisting one another in carrying these burdens.
What Kind of Company is FairSide Foundation? FairSide Foundation is a Delaware nonstock corporation. It is important to note FairSide Foundation is not an insurance company. Instead, FairSide is dedicated to establishing a cost sharing membership program specifically designed for addressing crypto theft expenses. In addition, FairSide provides access to Additional Services for its Members and, through its Core Governance Committee, aims to ensures the provision of a robust organizational framework and essential support for its Members to foster a united and cooperative community.
If Membership provides coverage in the form of sharing crypto thefts, isn’t FairSide just another insurance company?
No. Unlike insurance companies, FairSide operates under a voluntary giving model of the community, as opposed to insurance contracts, where one party assumes financial liability for another party's risks.
This approach allows FairSide to provide a more flexible and member-centered experience while providing protection in the crypto industry. Unlike insurance companies, FairSide does not assess risks of the applicant or assume long-term financial obligations for crypto losses. Instead, the emphasis is on Members supporting one another in times of immediate need, fostering a collaborative community where crypto losses can be collectively shared.
How does it work? With Cost-Sharing, there is no transfer of risk, eliminating the concept of owed claims. Instead, when a Member experiences crypto losses, it signifies a need for support. When this financial need arises, Members can reach out to the FairSide Community for help.
In order to do so, Members submit evidence of their crypto losses to FairSide via the dApp, where they are assessed according to the Guidelines and subject to the review process set out in Section E-5 of the Guidelines below. Eligible losses are then designated for Cost-Sharing based on consensus of the FairSide Community. Each Member’s annual sharing fee is voluntary, but the payment of such fee is a mandatory requirement to maintain active participation in the membership.
Is it possible to increase the amount I am eligible for sharing during my membership period?
Certainly! You have the option to top up your coverage at any point during your Membership Period, allowing you to reach a maximum of 100 ETH in shareable value. In such cases, your Membership Contribution Fee will be adjusted on a prorated basis, taking into account the remaining time in your Membership Period.
How does FairSide measure my Need for sharing?
For example, you choose a Membership that provides you with an annual Cost-Sharing benefits amount of 100 ETH. If your crypto loss meets the requirements for the Cost-Sharing Program, as set out in the Guidelines, FairSide can reimburse you for the total value of the lost digital assets, excluding the Un-Shareable Amount (as defined above, the USA). The value of your loss will be based on the ETH equivalent of the lost assets, regardless of their type or native chain. For instance, if you have 100 ETH benefits and lose 1000 SOL[1] in a phishing attack (equivalent to 30 ETH at the time of loss), your financial need will be 27 ETH after deducting the 10% USA. You will have 73 ETH benefits remaining for your membership period.
Who assesses my loss to determine if my Need qualifies for the Cost-Sharing Program? The assessment process involves multiple steps. Initially, the proof of loss, incident report, and KYC information provided during the Cost-Sharing Request are reviewed by our internal Investigations Team as well as our security and research partner Naxo.[2]
Naxo is an independent third-party firm specializing in cyber investigation and digital forensics. During this evaluation, a trust score is generated, considering the legitimacy of the information collected, and the extent of the material loss is determined. To account for personal responsibility, the material loss amount is reduced by 10% for the member's retained portion.
Next, the Core Governance Committee conducts a voting process to validate that the loss aligns with the Guidelines. Once confirmed and recorded on-chain, the payout for the eligible shared amount will be executed and deposited into a qualifying wallet the Member has designated specifically for claims payout.
How long does it take to process a request for Member benefits? The processing time for sharing crypto Loss Events typically varies between 2-5 days from the receipt of a Member’s Loss Event details and required information. This time period assumes that the crypto Loss Event submission process has been successfully completed and all necessary documentation has been provided, which may include KYC in some types of sharing. Please keep in mind that larger Loss Event amounts often require more time for investigation and resolution.
What if a Member doesn’t agree with a declination of their need? It is essential to bear in mind that sharing within the FairSide Community is entirely voluntary.
However, if a Member believes that their loss has been unfairly declined based on the Guidelines or if they have obtained new evidence of the Loss Event, the Member is encouraged to appeal the decision. FairSide values open communication and provides an opportunity for members to challenge decisions they perceive as unjust.
Do Members pay deductibles when filing a request for reimbursement under the Cost-Sharing Program?
No. Unlike insurance programs, cost-sharing programs, including the FairSide Cost-Sharing Program, do not require deductibles.
Rather, FairSide Members are required to pay an assessor’s fee, which is equivalent to 10% of the value of their annual Membership Contribution Fee. Accordingly, unlike a deductible, which is a fixed amount that needs to be paid before sharing kicks in, FairSide Members contribute an assessor's fee as a percentage of their Membership Contribution Fee. This fee helps cover the costs associated with assessing and processing Cost-Sharing Requests within the FairSide Community and contributes to the sustainability and operational aspects required to support the Cost-Sharing Program.
What if I have a Loss Event that is not shareable? As a member of FairSide, you gain access to a range of benefits and services to support your crypto journey. One of these valuable offerings is the assistance provided by our experienced partners at Naxo. They specialize in Wallet and key recovery, and the best part is that this service is provided to you at no additional cost simply because you are a member of FairSide.
Losing access to your crypto Wallet or encountering key-related issues can be incredibly stressful and potentially result in significant losses. However, with Naxo’s expertise, you can find peace of mind knowing that professional assistance is available to help you navigate and resolve these challenges.
Will the FairSide Community share in losses that occurred before my Membership started? Unfortunately, the FairSide Community will not share in losses that occurred prior to the start of your membership period.
What are the requirements for Membership eligibility?
See Section E-1 of the Guidelines for the full Membership requirements. Specifically, please note that crypto losses resulting from participation in unlawful activities, will not be shared.
How does the voting for sharing in losses work?
Voting for reimbursement requests under the FairSide Cost-Sharing Program follows a democratic and community-driven process. When a Member submits a request for Cost-Sharing a crypto loss that falls within the Guidelines, the request is reviewed by the Core Governance Committee. The Core Governance Committee, which consists of FairSide Foundation personnel and community members, evaluates the request and decides whether it meets the criteria for Cost-Sharing. What are the risks of this coverage concept? FairSide’s Cost-Sharing Program draws inspiration from the well-established and highly successful medical cost sharing industry, which has thrived for over 25 years. With millions of members collectively sharing billions of dollars in medical expenses through various sharing ministries, the concept has a strong precedent. At FairSide, we firmly believe that a community of security-conscious individuals can effectively come together to share the financial burdens of crypto loss expenses.
However, it is important to acknowledge that past successes of sharing groups do not guarantee future outcomes for similar programs. We want to emphasize that FairSide Foundation, its contributors and its Members make no promises or contracts to contribute toward any future needs individuals may have. While we have faith in the potential of the FairSide Community, it is essential to approach Cost-Sharing with a realistic understanding of the inherent uncertainties involved.
What if the Need of the overall FairSide Community exceeds the sharable amount available? In cases where the financial needs of the FairSide Community surpass the available sharable amount, FairSide adopts a prorated distribution approach. This means that if the total requested amount exceeds the Capital Pool, each Member will receive a proportionate distribution based on the available funds.
How much is the Membership Contribution Fee? Membership to the FairSide Community comes with an annual contribution fee of 1.95%. The Membership Contribution Fee is determined based on the desired coverage amount. Coverage is available for wallet protection on various chains, with reimbursements exclusively in ETH.
How do you collect the Membership Contribution Fee? The Membership Contribution Fee is collected annually and is denominated in ETH with the On-Chain transaction viewable on the Abstract blockchain. In the event that a Member decides to increase their coverage mid-term, the additional amount will be collected for the remaining duration of their Membership. This ensures that any top-up contributions align with the Membership Period, providing continuous coverage as requested by the Member.
Can the Membership Contribution Fee change and how often? The Membership Contribution Fee is subject to potential changes at the discretion of the Core Governance Committee, following a consensus-affirmative vote.
However, it’s important to note that any fee adjustments will not affect current Memberships until the respective Membership Periods come to an end. This allows existing Members to maintain their agreed-upon Membership Contribution Fee throughout the duration of their Membership.
MEMBERSHIP PRINCIPLES AND GUIDELINES
Overview of FairSide Membership Requirements and Eligibility
The listed requirements serve to safeguard all Members by promoting integrity, minimizing crypto risks, ensuring accountability, and encouraging sound security practices.
Membership in FairSide’s Cost Sharing program is contingent upon agreeing to comply with these requirements. As long as Members consistently meet these obligations and fulfill their Membership duties as determined by the Core Governance Committee, their Membership will remain active. However, if a Member no longer satisfies all Membership requirements, they are obligated to promptly notify FairSide, and their Membership, along with associated privileges, will cease unless otherwise specified.
It’s important to note that while Member security status does not affect eligibility for Membership, there are certain limitations on the cost-sharing of specific Needs, which are outlined in Section E-5, which provides a comprehensive breakdown of shareable and non-shareable Needs.
To participate in the FairSide Cost Sharing Community, all Members are required to agree with and acknowledge the following statements:
I firmly believe that a community comprising of individuals who prioritize ethics and security can best support and care for one another as a community sharing in crypto losses.
I acknowledge that FairSide Foundation, a Delaware nonstock corporation, functions as a public good company providing guidance to the FairSide Foundation cost-sharing community.
I understand that the FairSide Cost-Sharing Program is NOT insurance.
I understand that FairSide Foundation is not an insurance company and cannot guarantee the payment of any crypto loss expenses, despite its efforts to help facilitate the sharing of members' crypto needs.
I commit to practicing good security measures to safeguard my crypto assets.
I agree to refrain from engaging in any illegal or unlawful activities, including activities associated with the dark web.
I understand that crypto losses events resulting from or related to the performance of any illegal or unlawful activity will not be eligible for sharing.
I am willing to engage in mediation and subsequent binding arbitration, if necessary, to resolve any disputes with FairSide Foundation or its affiliates.
I pledge to be truthful and fully cooperate with the lead assessors when submitting a request for cost sharing, including providing KYC information, completing an incident report, and supplying any other requested information to facilitate prompt sharing of loss.
I understand that FairSide Foundation does not assert that membership in FairSide’s Cost Sharing Community satisfies any governmental requirement members may have for their crypto asset coverage or insurance.
Each year upon renewal, I agree it is my responsibility to renew my membership if I would like my membership to continue and will reaffirming my commitment to adhere to these principles.
I understand that the core governance committee will vote on my loss for sharing. Sharing will occur when my crypto loss meets the preset loss types approved by the network.
I have thoroughly read and comprehended all the aforementioned statements, along with all elements of the FairSide Membership Guidelines and Membership Document (including the Disclaimer and Section E-9 Disputes and Reconciliation). I certify that all my responses are true and accurate, indicating my agreement to abide by the Membership Guidelines as well as the Member Principles and Responsibilities.
An accepted version of this attestation by the member will be documented onchain, is attached hereto as Exhibit A.
Member Responsibilities
To actively engage in the FairSide Cost-Sharing Program, it is essential for Members to acquaint themselves with the following responsibilities. By faithfully fulfilling these obligations, each Member makes a valuable contribution to the well-being of other Members within the FairSide Community.
New Members are required to complete the sign-up process, which involves providing necessary information, agreeing to the cost sharing principles, Guidelines, and terms of Membership, and signing the on-chain transaction to pay for Membership.
The Membership Contribution Fee is entirely voluntary and is tied directly to the FairSide Cost-Sharing Program. No Member is ever obligated to participate in this program. Contributions made by Members enable other Members to access confirmed shareable crypto Needs. The specific amount of each Member's contribution depends on their chosen shareable amount.
For the full details on the submission of Cost-Sharing benefits, please refer to the Guidelines.
FairSide expects all Members to act with integrity and trustworthiness. Any Member found presenting falsified needs, engaging in deceptive practices, or misusing the trust of other members will have their Membership cancelled. When a Need is submitted, the Member commits to utilizing the shared funds to alleviate their own financial burden, up to the available cost share benefits.
Members also agree to collaborate with FairSide lead assessors and authorized affiliates to facilitate a swift settlement of their needs. In the event of potential trust misuse, FairSide Foundation may seek assistance from affiliates to gather relevant information and hold the Member accountable. Mediation and arbitration provisions, as described in Section E-9 of the Guidelines, are available for resolution.
Member cooperation is crucial, and Members are expected to fully cooperate with FairSide and its partners. This includes providing necessary documents, authorizations, and any other requested information pertaining to determining shareability and extent of submitted needs. Members must provide the requested information for sharing to occur.
Members are part of a community comprising individuals who prioritize morality, ethics, and security consciousness. As such, Members agree to refrain from using threatening, aggressive, harassing, or abusive language or behavior when interacting with FairSide itself as well as other community members. Engaging in such behavior may result in Membership termination.
Members are encouraged to promptly open requests for cost share benefits upon discovering a Loss Event has occurred.
KYC is a requirement for filing certain types of cost share benefits. Member cooperation in completing the KYC process in a timely manner is crucial for efficient settlement of crypto loss expenses. Members who refuse to comply with the KYC requirement will be unable to file their needs for sharing.
Member Participation
Active Member participation is crucial to the FairSide Community. As a community-focused Public Good Company, we value the input and opinions of our Members in shaping the functioning of our Membership. We firmly believe that every Member should have a voice, contributing to the mutual advantage of all.
We actively encourage FairSide Members to engage with our Core Governance Committee, especially when it comes to security matters. Member input is crucial in identifying and addressing potential security issues. For instance, if you come across a new exploit or phishing attack that could affect our community, we urge you to promptly communicate it to FairSide and our community channels. This collective vigilance helps enhance the security and knowledge of our entire community.
Moreover, we highly value constructive and helpful input from our Members. Your suggestions and ideas contribute to the continuous improvement of our Membership. We welcome your contributions and invite you to be an integral part of our thriving community.
Embracing Generosity and Expanding the Scope of Sharing
At FairSide, we prioritize responsible stewardship by adhering to the Guidelines. These Guidelines ensure that the needs we share align with the agreements made by contributors and Members. However, we believe in fostering a culture of generosity that goes above and beyond the minimum requirements.
Through the Core Governance Committee voting process, we actively encourage the FairSide Community to consider expanding the types of losses that can be shared. This means that, from time to time, we may extend the scope of sharing beyond what is initially outlined. This flexibility allows us to adapt and meet the evolving needs of our community.
By embracing this spirit of giving and openness, we can create an environment where the FairSide Community thrives and grows together.
Ensuring Equitable Distribution in Times of High Demand
In the event that the financial needs of all Members cannot be fully met at any given time, FairSide employs a prorating method to evenly distribute the burden. For instance, if the available amount in the capital pool is equal to 90% of the total Needs submitted, each individual Need would receive 90% of its requested amount during that particular period.
To maintain a balanced system, if prorating occurs three times within a six-month period, the Core Governance Committee will evaluate the necessity for additional capital contributions or potential adjustments to the Membership Contribution Fee. This evaluation helps ensure that sufficient resources are available to meet the needs of the community during times of increased demand. By proactively addressing the situation, FairSide aims to uphold its commitment to fair and sustainable cost sharing practices.
Determining Shareable Crypto Losses and Request Process
FairSide will follow a very specific process for determining the shareable amount of a Member's crypto losses. While there is no annual limit on the number of events that can be shared within the FairSide Community, it is important to note that Cost-Sharing cannot exceed the available cost share benefits of the Members.
To ensure timely support, Members are encouraged to open requests for cost share benefits as soon as they discover the Need. This allows for efficient evaluation and processing of such requests, enabling assistance to be provided when it is most needed.
Please note that crypto losses events should be submitted on a per Member, per incident basis. This ensures a fair and transparent evaluation of each event within the context of the Member's specific circumstances.
Un-shareable Amount (USA)
The USA refers to the portion of crypto losses that each Member is personally responsible for retaining (which is currently set at 10%). It is subtracted from the total loss event amount and is not eligible for sharing within the FairSide Community. By assigning this personal responsibility, we ensure transparency and fairness in the sharing process, allowing Members to actively participate while maintaining individual accountability for their losses. Should the Loss Event be a qualified Need, as determined by the Guidelines, it becomes eligible for sharing consideration.
Shareable Amount
Cost-Sharing is restricted to the cumulative number of cost share benefits chosen at the time of Membership registration or any additional sharing coverage selected during the Membership Period. It is important to note that no individual requirement can exceed the remaining cost share benefits available in the Member's account.
Valuation of Need
In cases where multiple crypto losses are associated with the same Loss Event, regardless as to whether they involve different asset classes such as coins, tokens, NFTs, or RWAs, such losses will be treated as a single Need within the FairSide Community. These losses will accumulate together, contributing to the total loss amount that will be considered for the Cost-Sharing Program. This approach ensures a comprehensive evaluation of the overall impact of the event, allowing for a fair and unified sharing process across different asset classes.
Calculating Loss Amount
When assessing the loss amount within the FairSide Community, the total value of the need will be determined in ETH at the time of the Loss Event. Sharing of the loss will then take place in either ETH or DAI, providing flexibility for Members.
Members have the freedom to select the assets they prefer to receive as part of the Cost-Sharing process. This empowers Members to make choices aligned with their individual preferences and requirements, ensuring a personalized experience within the FairSide ecosystem.
Timely Notice of Loss
Swift loss notification is crucial within the FairSide Community to enable efficient sharing. Members are encouraged to report losses promptly for expedited sharing and timely support. It is worth noting that cost-sharing can occur during an extended period of up to 60 days beyond Membership termination, allowing ample time for reporting and consideration.
Eligibility for Sharing
When a Loss Event aligns with the guidelines and qualifies as a Need or an approved loss type, as determined by our Guidelines, it becomes eligible for Cost-Sharing within the FairSide Community. Requests for cost share benefits can be made in such cases, allowing Members to access the support they need during challenging times. By adhering to the defined criteria, we ensure fairness and transparency in the sharing process. To meet the basic guidelines for sharing the following criteria must be met:
The Member had a Wallet or Wallets registered with FairSide;
The Wallet experiences a material financial loss beyond the USA due to an approved computer crime which resulted in theft of the Member’s digital assets;
The loss is an isolated event effecting no other persons than the Member;
The Member has completed the KYC requirements to file a request for Cost-Sharing;
The Member provided sufficient evidence of the loss related to the theft as requested by the lead accessor.
Trust Score
In the processing of Loss Events to determine if they meet the Guidelines, Members’ truthfulness and cooperation play a crucial role. To ensure an objective evaluation, each Member is assigned a “trust score” based on the factual information related to the events under consideration. This “trust score” is generated by a trusted third-party and serves as a significant factor in determining whether the loss will be shared by the FairSide Community.
By incorporating a trust score system, FairSide prioritizes trustworthiness and fairness within the community. It encourages Members to provide accurate and reliable information, fostering a transparent environment where shared losses can be effectively evaluated and appropriately addressed.
See Section E-5(j)(4) for further information.
Fair Evaluation of Cost-Sharing Requests
Every Cost-Sharing Request made by a Member will undergo careful assessment for sharing within the FairSide Community. The Core Governance Committee, comprising dedicated community members, plays a pivotal role in ensuring a fair outcome for each request submitted for sharing. Through a majority rule voting process, the Core Governance Committee seeks consensus to determine whether sharing is warranted.
Appealing Denials
FairSide recognizes the importance of ensuring a fair and equitable resolution for every Cost-Sharing Request. In the event that a Cost-Sharing Request is initially denied based on the Core Governance Committee’s vote, Members retain the right to appeal the decision. This appeals process provides an opportunity to present additional evidence or proof of loss, offering a compelling case for reconsideration
Primary Payors and Obligated Third Parties
When it comes to crypto expense losses, it is essential to consider obligated insurance and/or other entities as the primary payors. Members who are eligible for benefits through insurance arrangements or other entities must inform FairSide before submitting their Cost-Sharing Request. It is crucial to receive notice of payment or rejection from the potentially liable party before FairSide considers sharing the need.
Any amount paid by an obligated third-party payor will directly reduce the Member’s USA on a dollar-for-dollar basis, up to the full amount. However, amounts paid by obligated third parties beyond the USA will not be shared within the FairSide Community.
Example
a) Original Need request; $5,000 Crypto Loss - $500 member USA (10%) = $4,500 FairSide Community sharable amount
b) Adjusted need request, after insurance award; $5,000 Crypto Loss - $2,000 insurance award -$0 member USA eliminated = $3,000 adjusted FairSide Community sharable amount
Timely Submission for Crypto Loss Expense and Maximizing Efficiency
Submitting crypto loss expenses as soon as possible increases the likelihood of validation for the loss event within FairSide. When multiple assets are associated with the same incident, it is beneficial to submit them together. To facilitate the process, Members should promptly provide proof of loss and any other requested information through the web3 submittal process for Cost-Sharing.
In general, losses submitted for sharing more than 6 months from the Date of Loss will not be shared, unless there are exceptional circumstances. However, exceptions can be made for losses occurring during a Membership Period up to 2 months after termination of Membership. Members are encouraged to open a Need upon the first DOL, enabling the utilization of recovery resources and maximizing processing efficiency.
Promoting Fairness in Crypto Cost Sharing
Members have the freedom to participate in other crypto cost sharing communities or pursue traditional insurance alongside their involvement in FairSide. However, it is essential to maintain fairness and avoid undue burden or profiting from incurring a crypto loss expense.
If a Member submits a shareable Need while being a member of multiple sharing communities or having obligated third parties, cooperation and supporting documentation are required. This documentation helps determine what portion of the loss is shareable or has already been shared by another community or traditional insurance policy.
Within the FairSide Community, sharing will occur based on the proportional share of the Need. In cases where partial recovery of funds has been obtained or if the Member has been fully or partially reimbursed by a third party, FairSide will share the remaining balance of the loss. By adhering to these principles of collaboration and transparency, we ensure that sharing is carried out equitably and in alignment with the values of the FairSide Community.
FairSide Network Cost-Sharing Requests and Trust Score
To file Cost-Sharing Requests, Members can utilize our dApp, where Naxo takes the lead in the Cost-Sharing Request investigation process, with the support of Chainalysis. The findings of a Member’s Cost-Sharing Request are used to assign a trust score by Naxo. This trust score, which employs a multi-point system to validate request legitimacy, is then utilized by the Core Governance Committee to approve Cost-Sharing Requests. Below is a high-level overview of the workflow:
Member files a Cost-Sharing Request via the FairSide dApp.
Naxo conducts an investigation into the Cost-Sharing Request, aided by Chainalysis.
Based on the investigation findings, Naxo assigns a trust score to the Cost-Sharing Request.
The Core Governance Committee utilizes the trust score to make informed decisions regarding Cost-Sharing Request approval.
Ensuring Equitable Distribution
The FairSide Community operates in good faith, with a commitment to sharing in the losses of its Members that align with the Guidelines and approved types determined by the FairSide Community. However, as noted above, it’s important to note that losses occurring before or after the Membership Period will not be shared.
The time stamp of the Member’s on-chain transaction at the moment of sign-up or Membership renewal will set the specific moment of commencement of a Membership Period. This on-chain verification ensures transparency and accuracy in determining the Membership Period and enables fair sharing of losses within the defined timeframe.
Eligible Events for Cost-Sharing
Crypto losses become eligible for sharing within the FairSide Community if they align with the Guidelines. These Guidelines provide a framework for determining which types of crypto losses qualify as shareable Needs. This section aims to assist Members in assessing whether their incurred crypto loss or theft event meets the criteria for Cost-Sharing.
It’s important to note that there are certain crypto losses that are not eligible for Cost-Sharing, as outlined in Section E-7. To clarify any doubts or queries regarding the application of these guidelines, Members are encouraged to actively engage with the official Discord channel. Additionally, Section E-8 provides insights into the process of binding decisions.
By familiarizing themselves with the Guidelines and seeking clarification when needed, members can gain a clear understanding of the shareability of their crypto losses within the FairSide Community.
Sharing Eligibility for Personal Wallet Losses
In general, the FairSide Community allows for sharing of most personal Wallet losses resulting from computer crime. However, there are certain exceptions based on the specific type of loss, which will be further explained below. To determine eligibility for sharing, Member Cost-Sharing Requests for crypto losses must align with the associated on-chain time stamp within the Membership Period. This verification process ensures accuracy and transparency in assessing the time frame for Cost-Sharing Requests.
Time Limit for Cost Share Requests
Members have the opportunity to submit a Cost-Sharing Request within 60 days of their Membership termination, provided that the need for the Cost-Sharing Request occurred during the active Membership Period. This timeframe allows for a reasonable window to submit Cost-Sharing Requests related to losses that took place while the Membership was active. FairSide acknowledges the importance of addressing potential needs that may arise shortly after Membership ends, ensuring support for eligible Cost-Sharing Requests within a defined time limit.
Accepted Sharing of Loss Types and Eligibility
The Core Governance Committee has approved the sharing of specific loss types outlined in the Guidelines. It’s important to note that other similar types of losses not explicitly mentioned may still be eligible for sharing under these Guidelines. The approved sharable events or loss types primarily involve instances of computer crime where the Member's computer, device, or Wallet is directly compromised, resulting in the loss of a Member funds.
However, there are certain types of losses where the Member initiated the transfer, but the funds were maliciously sent to an unknown address. These types of losses are also considered for sharing, as further detailed below.
By defining and accepting these loss types, FairSide aims to ensure clarity and consistency in determining the eligibility for sharing within the community. Members are encouraged to review the Guidelines for a comprehensive understanding of the approved loss types and their potential eligibility for sharing.
Approved Loss Types ( Covered Events )
Covered Events
Fairside covers a wide variety of scams related to malicious transactions and signatures, malicious transfers, and private key or seed phrase compromise. These scams may vary in how they appear to users, and while this document is comprehensive it will not cover every single scenario users may encounter.
Users may propose new types of covered events or raise edge cases with the Fairside staff in Discord or Telegram.
Covered: Malicious Transactions and Signatures
Fairside will cover most instances where a user is tricked into signing malicious transactions or signatures that leads to theft. These scams can take several forms and typically leverage unique smart contracts that focus on specific types of assets.
Some of the various malicious transaction and signature requests include:
Malicious approvals, custom smart contract interactions, or DeFi interactions
Permit and gasless signatures related to marketplaces, DEXs, or token approvals
DeFi positions (e.g., AAVE, Uniswap liquidity, etc.)
Arbitrary ETH_SIGN hashes
Delivery Methods and Social Engineering Approaches
Malicious transactions and signatures manifest through websites that impersonate legitimate crypto protocols and projects or even websites that represent entirely fake crypto projects. Scammers typically deliver these websites to users in the following ways:
General Impersonation on Social Media
Scammers create accounts on social media platforms like X, Discord, Reddit, Instagram, and Facebook to impersonate legitimate high profile crypto companies and individuals. These accounts often reply directly to legitimate accounts to give the appearance of a social media “thread” where accounts post replies to themselves. The casual observer may not realize these are two separate accounts.
Fake Airdrop, Token Claim, and NFT Mint Announcements
Scammers frequently leverage fake airdrop announcements and token claims to drive users into interacting with malicious transaction requests. Fake announcements are typically posted on compromised social media accounts, impersonation social media accounts, or distributed via phishing emails and paid advertisements.
Phishing Emails
Data breach victims are particularly vulnerable to phishing email scams. Several major crypto platforms have experienced user data breaches, which scammers use to target crypto users with phishing emails and distribute links to malicious websites.
Compromised Social Media Accounts
Legitimate social media accounts can be abused to deliver malicious websites to crypto users. Particularly on X and Discord, where hackers break into social media accounts to post fake announcements, airdrop claims to drive users
Front End Compromises
Scammers target legitimate crypto websites to inject malicious content and send malicious transaction requests to users. Wallet Connection kits are a particular target and have been exploited on crypto websites over multiple instances
Paid Advertisements
Scammers use paid advertisements including ads on Google Search, X, Reddit, Telegram, and Discord bots to distribute malicious websites.
Direct Messages
Scammers use direct message (DM) features on social media platforms like X, Discord, Reddit, and Telegram to disseminate links to malicious websites. DMs are most commonly used to distribute malicious websites during over-the-counter (OTC) trading where two individuals negotiate a set price for a crypto asset, such as an NFT.
Covered: Address Poisoning
Fairside covers malicious transfer scams where users are tricked into sending crypto to a malicious address. This occurs primarily through a scam referred to as “Address Poisoning.”
Address Poisoning occurs when scammers spoof transactions that appear to come from your wallet. Their goal is to trick you into copying and pasting the wrong address from blockchain analysis tools like Etherscan and sending funds to that malicious address.
Covered: Private Key Compromise
Fairside covers some instances of private key or seed phrase compromise. Private key compromise typically occurs when users download malware or viruses that search computers for sensitive information, including the private keys associated with hot wallets or seed phrases for other wallets stored in the computer’s documents or photos.
Fairside covers most instances where private keys are stolen due to malware or a virus. This coverage is contingent on forensic analysis to verify that the user downloaded malware prior to the loss event. Fairside users who believe they have experienced a malware related loss should move all valuable assets to fresh wallets on separate seed phrases and completely separate devices.
Scammers also create phishing websites designed to steal seed phrases or private keys by asking the user to provide this information. Fairside does NOT cover instances where a user sends their seed phrase or private key to a scammer, or enters it on a website.
Legitimate wallets and protocols will NEVER ask users to provide their seed phrase on a website. Users only need to enter their seed phrase on a wallet when restoring that wallet, typically on a new device.
Malware Delivery Methods
Direct Messages
Scammers leverage DM features on social media platforms like X, Discord, Reddit, and Telegram to disseminate links to download malware, socially engineer victims and convince them to proceed with downloading the malware or virus. Best practice is to never download any file or document that someone sends you or directs you to in a DM.
Scammers frequently use the following social engineering tactics that start in DMs to convince victims to download malware:
Fake Job Offers: Scammers frequently use the excuse of hiring Discord or Game Moderators and Beta Testers to onboard Particularly Discord or Game Moderators
Fake Meeting Software: Scammers impersonating hiring, collaboration, or business development managers use DMs to suggest individuals download malware disguised as virtual meeting software.,
Fake Journalist Outreach: Scammers will impersonate journalists and interview victims via direct message or video calls. The scammers then will share a document with a “draft” article based on your interview that is actually malware.
Contracts, Pitch Decks, Misc Files: Scammers will leverage a variety of other documents including contracts/NDAs, pitch decks, or other miscellaneous documents to convince you to download malware disguised as these files.
Malicious Websites + Fake Blogs
Scammers create websites that impersonate genuine crypto projects and protocols to distribute malware in the form of applications. These can take the form of entire domains dedicated to impersonating a crypto brand, or could be blog posts that appear to provide helpful information on a protocol, but lead users to download a malware loaded file impersonating a desktop app.
Software Downloads (Apps, Games, Game Modifications, Android Package Kits)
Scammers disguise malware as a variety of other softwares including crypto apps, games, game “mods” and mobile software including Android Package Kits. It is critical to be cautious while downloading software and applications on devices that you also use for crypto.
4. Covered Blockchains
EVM
Ethereum, Base, Arbitrum, Optimism, Avalanche, BSC, Polygon, Fantom (Sonic)
Non-EVM
Bitcoin, Solana, TON
Non-Shareable Event ( Not Covered )
These are types of losses that are typically not shared within the FairSide Community. In such events, the loss occurs due to the victim sending funds directly to the attackers' wallet knowing or unknowing. These attacks do not result in a direct compromise of the member's computer, device, or wallet. Examples of these loss types are listed below.
The listed non-sharable loss types aim to provide clarity within the network regarding non-shareable losses. However, other similar loss types not explicitly mentioned may also be ineligible for sharing.
Fraudulent Investment Opportunities: Attackers may approach victims with false investment opportunities, such as high-yield investment programs (HYIPs), promising significant returns on their cryptocurrency investments. The attacker may ask the victim to transfer their crypto assets to a specific wallet address under their control, only to disappear once the victim's funds have been transferred.
Certain Social Engineering: After successfully SIM-swapping the victim's phone number, an attacker may contact the victim's friends, family, or associates, pretending to be the victim. The attacker may ask for help or claim to be in an emergency situation, requesting that the victim's contacts send cryptocurrency to a wallet address under the attacker's control.
Giveaway Scams: Attackers may create social media posts or send messages impersonating celebrities, influencers, or representatives of cryptocurrency projects, offering giveaways or rewards for sending a small amount of crypto to a specified wallet address. The scammer claims that they will send a larger amount of cryptocurrency back to the participant, but victims who send their crypto assets never receive anything in return.
Romance Scams: In this type of social engineering attack, scammers establish online relationships with victims, often on dating or social networking websites, and eventually ask for financial support in the form of cryptocurrency. The attacker may claim that they need the funds to cover a personal crisis or travel expenses to meet the victim in person. Once the victim transfers their crypto assets, the scammer typically breaks off contact.
Employment Scams: Attackers may post fake job listings or reach out to potential victims with offers of high-paying remote work opportunities. The scammer may ask the victim to transfer cryptocurrency as part of their job duties, such as making payments to vendors or managing company funds. The attacker may also request that the victim pay for job-related expenses, such as training materials or software licenses, in cryptocurrency. In both cases, the victim loses their crypto assets to the scammer.
Extortion Scams: Scammers may send threatening messages to victims, claiming to have compromising information or evidence of illegal activities, and demand payment in cryptocurrency to prevent the release of the information. Fearing damage to their reputation or legal consequences, the victim may comply and transfer their crypto assets to the attacker.
Confidence Scams: Attackers may befriend victims, gaining their trust and confidence over time, only to betray them by convincing the victim to transfer their cryptocurrency to the attacker's wallet, either as a loan, an investment, or for some other seemingly legitimate reason. Once the victim transfers their crypto assets, the attacker disappears.
Impersonation of Law Enforcement: Scammers may contact victims, claiming to be representatives of a government agency or law enforcement. They may accuse the victim of illegal activities related to their cryptocurrency holdings and demand payment in the form of cryptocurrency to avoid legal consequences. The victim, fearing potential legal issues, may comply and transfer their crypto assets to the attacker.
Fake Charities and Donation Scams: Attackers may create fraudulent charitable organizations or donation campaigns, often targeting recent disasters or ongoing crises, and ask for donations in the form of cryptocurrency. Victims who transfer their crypto assets to the attacker's wallet
Binding Decisions
While the FairSide Foundation, its contributors, and community members strive to consider the best outcomes for our members, opinions expressed by the FairSide Foundation, its employees, or Core Governance Committee do not constitute binding decisions. When Members engage on official social channels to assess if their Need qualifies, they will receive an opinion, which is not legally binding. To obtain an official ruling from the community, Members must submit formal requests via the dApp, and the outcome will be determined through the governance voting process, which will be placed on-chain. Only completed Cost-Sharing Requests will be considered in the voting process, ensuring an official community ruling.
Disputes and Reconciliation
FairSide Foundation is dedicated to fostering a community of supportive individuals who seek to help one another. Members commit to resolving disputes privately or within the community in a fair manner.
To ensure amicable resolutions, Members agree that any claim or dispute, involving FairSide Foundation or its Members in any way, shall be settled through non-biased mediation. If mediation proves unsuccessful, the matter will be resolved via legally binding arbitration. Both parties commit to this process in the interest of fair resolution. Mediation and arbitration proceedings will be conducted in the Cayman Islands or via virtual meetings, adhering to Delaware laws. The specific procedure used depends on the nature of the issue, as outlined in subsection a and b, below.
Shareable Appeal
In most cases, Needs can be evaluated as shareable or not based on the Guidelines. However, if the Guidelines lack clarity in certain situations, the Core Governance Committee has the sole discretion to determine sharing eligibility. The committee’s decision is final and binding, taking into account previous procedures and precedents. If a Need is deemed not shareable and the Member disagrees with the committee’s interpretation of the Guidelines or their circumstances, they can request reconsideration through the appeals process. It is important to understand that the appeals process does not guarantee a legally enforceable right or entitlement to the sharing of a specific need. The Guidelines do not form a contractual promise or legally enforceable right for the sharing of Needs. To initiate the appeals process, Members have 30 days from the date of the rendered determination.
If at 50% or greater of the votes agree that the Need should be shareable, FairSide will consider the Need as shareable following the standard procedure. However, if the Member still disagrees with the appeal's outcome, the dispute will be settled through mediation and, if necessary, binding arbitration. Any such mediation and/or arbitration will take place in the Cayman Islands or via virtual meetings, governed by the laws of the state of Delaware. The arbitration process will follow the rules published by the American Arbitration Association. FairSide Foundation and the Member agree that each party shall bear its own costs, and the cost of any mediator(s) or arbitrator(s) will be evenly split. Both FairSide Foundation and the Member legally commit to abide by the arbitrator's decision.
Settlement of all Remaining Matters
Any matter not covered in subsection a, above, will be addressed by the Core Governance Committee. If the committee is unable to resolve the issue, it will be settled through mediation. If mediation proves unsuccessful, the matter will be resolved by binding arbitration. Any such mediation and/or arbitration will take place in the Cayman Islands or via virtual meetings, governed by the laws of the state of Delaware. The arbitration process will follow the rules published by the American Arbitration Association. FairSide Foundation and the Member agree that each party shall bear its own costs, and the cost of any mediator(s) or arbitrator(s) will be evenly split. Both FairSide Foundation and the Member legally commit to abide by the arbitrator's decision.
Agreement to Exclusively Utilise Arbitration
Members agree that the methods mentioned herein shall be the exclusive recourse for any disputes arising with FairSide Foundation. They expressly waive their right to file a lawsuit in any civil court against FairSide Foundation, its employees, members, associate members, and directors, except for enforcing an arbitration decision obtained under subsection a and b, above. This includes any determinations regarding whether the matter falls under this arbitration agreement or should be subject to arbitration. Any arbitration award under subsection a and b, above, may only be entered in the United States District Courts for the District of Delaware. To the fullest extent permitted by law, each member and contributing entity providing sharing to the FairSide Community waives the right to a trial by jury.
Change of Guidelines
The FairSide Foundation continually updates the Guidelines to serve the growing and diverse Community, striking a balance between sharing reasonable, unexpected crypto losses and maintaining an affordable Membership. These adjustments align with current losses, actuarial findings, and best practices. FairSide reserves the right to make necessary changes to the Guidelines to ensure effective sharing of Needs and protect the community's interests. Members are encouraged to review announced changes, which become effective on the specified date, and any incurred Needs will be shared based on the Guidelines at the time of the occurrence.
Procedures
The Core Governance Committee has the authority to amend the Guidelines, seeking advisory input from all members and contributors in good standing.
Effective Date
Amendments will take effect as soon as administratively practical or as designated by the Core Governance Committee. For Needs incurred prior to the change, the sharing of losses related to those Needs will follow the Guidelines as they existed on the date of the loss.
Notice of Amendments
Members will receive notifications of changes through postings on the FairSide website or via updated Guidelines provided through the dApp.
Distribution of Membership Contribution Fees
The Membership Contribution Fees are distributed in the following manner:
57.5% is deposited into the reserve pool, which represents the estimated portion of future ETH cost sharing. This amount may change dynamically based on the funding levels of the capital pool.
20% is allocated as contributors rewards, which is given to those who actively participate in cost sharing within the network.
15% is reserved for referral partners.
Another 7.5% is allocated to the funding pool, which serves as a reserve for supporting the ongoing development and growth of the FairSide ecosystem.
This distribution schedule ensures that the funds collected from membership fees are appropriately utilized to support the cost-sharing needs of the community, incentivize active participation, and promote the overall development and sustainability of FairSide.
EXHIBIT A
MEMBER ATTESTATION
I confirm that I agree with and acknowledge the following statements:
I firmly believe that a community comprising of individuals who prioritize ethics and security can best support and care for one another as a community sharing in crypto losses.
I acknowledge that FairSide Foundation, a Delaware nonstock corporation, functions as a public good company providing guidance to the FairSide Foundation cost-sharing community.
I understand that the FairSide Cost-Sharing Program is NOT insurance.
I understand that FairSide Foundation is not an insurance company and cannot guarantee the payment of any crypto loss expenses, despite its efforts to help facilitate the sharing of members' crypto needs.
I commit to practicing good security measures to safeguard my crypto assets.
I agree to refrain from engaging in any illegal or unlawful activities, including activities associated with the dark web.
I understand that crypto losses events resulting from or related to the performance of any illegal or unlawful activity will not be eligible for sharing.
I am willing to engage in mediation and subsequent binding arbitration, if necessary, to resolve any disputes with FairSide Foundation or its affiliates.
I pledge to be truthful and fully cooperate with the lead assessors when submitting a request for cost sharing, including providing KYC information, completing an incident report, and supplying any other requested information to facilitate prompt sharing of loss.
I understand that FairSide Foundation does not assert that membership in FairSide’s Cost Sharing Community satisfies any governmental requirement members may have for their crypto asset coverage or insurance.
Each year upon renewal, I agree it is my responsibility to renew my membership if I would like my membership to continue and will reaffirm my commitment to adhere to these principles.
I understand that the core governance committee will vote on my loss for sharing. Sharing will occur when my crypto loss meets the preset loss types approved by the network.
I have thoroughly read and comprehended all the aforementioned statements, along with all elements of the FairSide Membership Guidelines and Membership Document (including the Disclaimer and Section E-9 Disputes and Reconciliation). I certify that all my responses are true and accurate, indicating my agreement to abide by the Membership Guidelines as well as the Member Principles and Responsibilities.
“SOL” refers to the native cryptocurrency of the Solana network. ↑