Rari Capital (RARI) was a DeFi yield and permissionless lending protocol on Ethereum — known primarily for Fuse, a protocol allowing anyone to deploy an isolated lending pool with arbitrary LTV ratios, liquidation penalties, and supported collateral assets (unlike Aave or Compound, which limit which assets can be listed) — that grew to over $1 billion in TVL in 2021, merged with Fei Protocol via a governance merger in December 2021 to create Tribe DAO, and was devastated by a $79.3 million reentrancy exploit of Fuse in May 2022 that caused both RARI and TRIBE to collapse and led to the dissolution of the Tribe DAO by late 2022.
| Stat | Value |
|---|---|
| Ticker | RARI |
| Price | $0.03 |
| Market Cap | $335,813 |
| Circulating Supply | 11.26M RARI |
| Max Supply | 12.50M RARI |
| All-Time High | $64.62 |
| Contract (Ethereum) | 0xd291...c623 |
| Contract (Polygon Pos) | 0xf4bb...c41e |
| Contract (Fantom) | 0xcf72...5af2 |
| Contract (Energi) | 0xf4bb...c41e |
| Contract (Arbitrum One) | 0xef88...4794 |
How It Works
- Rari Yield Aggregator — Rari’s original product (2020): an automated yield optimizer that moved user deposits (USDC, DAI, ETH) between Compound, dYdX, and other lending protocols to maximize APY. Unlike Yearn Finance which used LP strategies, Rari simply moved deposits between money markets.
- Fuse (permissionless lending pools) — Fuse was Rari’s breakthrough product: a factory contract allowing any user to deploy an isolated lending pool. The pool creator can list any ERC-20 token as collateral, set LTV ratios, set liquidation bonuses, choose interest rate models, and set any token as the borrowable asset. This enabled niche lending markets (e.g., borrow USDC against JPEG NFT tokens, or borrow ETH against yield-bearing tokens) that Aave and Compound would not list due to governance risk-management constraints.
- Isolation model — Each Fuse pool is isolated. A hack or bad debt in Pool 2 cannot affect Pool 1. This was Fuse’s key risk-management feature. In practice, the reentrancy vulnerability existed in the shared Fuse base contract, affecting many pools simultaneously.
- Tribe DAO merger — In December 2021, RARI holders voted to merge with Fei Protocol (FEI, TRIBE). Fei’s algorithmic stablecoin FEI would be deeply integrated into Fuse pools as a borrowable asset, using Tribe treasury backing to ensure liquidation coverage. RARI and TRIBE became governance tokens of the combined Tribe DAO entity.
- RARI governance — RARI tokens govern Fuse pool parameters at the protocol level, fee switches, and Tribe DAO treasury decisions (post-merger).
Tokenomics
| Parameter | Value |
|---|---|
| Ticker | RARI |
| Max Supply | 12,500,000 RARI |
| Launch | July 2020 |
| Token distribution | Majority distributed to users via liquidity mining |
| Ethereum contract | 0xFca59Cd816aB1eaD66534D82bc21E7515cE441CF |
| Peak TVL (Fuse) | ~$1.7 billion (2021) |
Use Cases
- Permissionless lending market creation — Create isolated lending pools for any ERC-20 asset via Fuse.
- Niche collateral lending — Borrow stablecoins against illiquid or volatile assets not listed on Aave/Compound.
- Governance — RARI holders vote on Fuse protocol upgrades, fee parameters, and Tribe DAO decisions.
History
- 2020-07 — Rari Capital launches the Rari Yield Aggregator, an autonomous yield optimizer for USDC, DAI, and ETH. The protocol is one of the earlier Yearn-style “robo-advisors” in DeFi.
- 2020-05 — Rari’s Ethereum Pool is exploited for $11 million when hackers use a Balancer protocol interaction to manipulate the pool. Rari covered losses partially from the protocol treasury — one of the first DeFi hack recoveries.
- 2021 — Rari launches Fuse, the permissionless isolated lending pool factory. Fuse TVL grows rapidly. Notable Fuse pools include the Fei Protocol FEI pool, the OlympusDAO pool, and pools designed for NFT-backed lending. Total Fuse TVL reaches $1.7 billion at peak.
- 2021-12 — Rari Capital and Fei Protocol (creators of the FEI algorithmic stablecoin and TRIBE governance token) announce a “merger by governance.” RARI and TRIBE holders both vote to merge into a combined entity called Tribe DAO, integrating FEI stablecoin deeply into Fuse lending pools.
- 2022-04-30 — Fuse lending pools are exploited via a reentrancy vulnerability. Attackers call a function in the Fuse cToken contracts in a reentrant manner during a token transfer callback, allowing them to borrow assets repeatedly before balances update. The total drained: approximately $79.3 million across multiple Fuse pools.
- 2022-05 — The Tribe DAO debates whether to repay affected users from the TRIBE treasury (which holds roughly $800M+ in assets). Despite having the funds, a contentious governance vote fails to authorize full repayment, citing legal uncertainty around whether repayment constitutes a securities offer.
- 2022-08 — After months of governance deadlock and community pressure, Tribe DAO leadership recommends full wind-down. A governance vote passes to repay hack victims and dissolve the DAO. The dissolution process begins, returning treasury funds to RARI and TRIBE holders.
- 2022-Q4 — Tribe DAO fully dissolves. RARI and TRIBE tokens retain minimal value. Fuse is effectively shut down as a live protocol. The $80M hack and governance paralysis over repayment becomes a prominent lesson in DeFi about what happens when protocols have the resources to make users whole but face organizational and legal obstacles to doing so.
Common Misconceptions
“Rari’s hack was an external attacker finding a new contract type.”
The reentrancy vulnerability in Fuse cTokens was a known class of vulnerability — reentrancy attacks had been well-documented since the 2016 DAO hack. The oversight was that Fuse’s custom cToken implementation introduced the exploitable callback path. Audits had reviewed prior versions, but the specific vulnerable code path was introduced in a later version.
“Tribe DAO couldn’t afford to repay users.”
Tribe DAO had sufficient treasury assets (TRIBE tokens, FEI, and other protocol-owned assets) to cover the $79.3M hack. The delay was a governance and legal dispute, not a treasury shortfall. Eventually the DAO voted to repay users during the wind-down process.
Social Media Sentiment
Rari Capital’s governance collapse following the Fuse hack is one of the most-cited examples in DeFi governance debates about what DAO decision-making looks like under pressure. The hack itself highlighted risks in permissionless lending (any asset as collateral, any pool creator) and the reentrancy vulnerability class. Fuse’s concept of isolated lending markets was influential — Euler Finance, Silo Finance, and Morpho Blue subsequently developed similar isolated pool designs with more careful security review.
Last updated: 2026-04