TOR (Tyche Owned Reserve) is a fully collateralized stablecoin that complimented the Hector Network Ecosystem, a decentralized and community-driven platform that provided DeFi solutions, among other services. TOR was powered by the Hector Network utility token ($HEC) and was built on the Fantom Opera Chain. ^[1][2][3]

Overview

TOR stablecoin was launched at the beginning of 2022 to make $HEC more deflationary while also providing the Fantom chain with its own algorithmic stablecoin. It was backed by DAI and USDC, which maintained its USD peg. The Hector Network Treasury was responsible for storing all the DAI used to mint it. TOR had a dynamic supply which was determined by supply and demand which ensured it was always worth $1. HEC and TOR mase up the foundations of the Hector Ecosystem. ^[4][6]

TOR could only be created by burning HEC. The HEC pricing oracle, built with Time Weighted Average Price, was used to swap TOR for newly minted HEC. ^[4]

Name Origin

Tyche Owned Reserve (TOR) originated from Tyche, the Greek goddess of providence, luck and fate. Tyche was the governing tutelary deity who oversaw a city’s wealth and prosperity, as well as its fate. She is the daughter of Aphrodite and Zeus or Hermes in Greek mythology, and her role at the time was to deliver messages to humans about external occurrences beyond their control. ^[5]

Technology

The Hector Network utility token, $HEC was linked to the TOR stablecoin, and its price increased when there was a higher demand for TOR, due to supply adjustments. To maintain stability, TOR used a swap mechanism - 1 TOR could be exchanged for $1 worth of HEC at any time. If TOR's value dropped below $1, buyers could purchase it, redeem it for $1, and profit. This process boosted TOR demand, raising its price until it reached $1, ensuring stability through financial incentives. ^[4]

Hector Network's Liquidation

Hector Network's treasury worth $16 million entered into liquidation mode with a majority vote from the community in July 2023. This was due to the collapse of bridge provider Multichain which caused the network to reportedly lose $8 million worth of crypto assets. ^[8]

The registration period given for token-holders to register their wallets began on September 12, 2023, and concluded on December 31, 2023. ^[7][8]

On January 18, 2024, the Hector team announced on its website that there was a security breach when the protocol was redeeming token holders as part of the liquidation, and approximately USDC 2.7 Million was stolen on 15 January 2024. ^[9]

Hector Network explained that before the contract deployment, Hector Network engaged Certik, a blockchain security firm, to conduct a thorough smart contract security analysis. ^[10][9]

"A production test transaction of the claim process was also successful. All assets were secured in a Redemption Vault prior to the launch of the production claim process. Despite these precautions, Hector Network’s system was compromised" - the website stated^[10]

As a result of the breach, the team has postponed the redemption process. ^[10]

"Preliminarily, the redemption process is expected to resume when the investigation is complete and the redemption process has been fortified against further potential vulnerabilities. Hector Network is working tirelessly to address this, is committed to maintaining transparency throughout this process and will keep you updated on any developments" - the update concluded^[10]