where the money borrowed against ALPHA went

the fee wallet held all four caps from dec 25 2025

a PositionCap is the key to a position: whoever holds it can borrow, repay & withdraw. each cap went from its creator to the fee wallet 0xee5360c5… & from there to the fresh wallet 0x5f81363f… on sep 7 2026. nowhere else. the creators never touched their positions again.

P4's cap moved four hours after P4 opened (21:52:13 to 01:52:55). the fee wallet didn't keep the caps loose, either. it kept them inside a Holder object, 0xe00ec45d…, built from a package the vault admin published at 23:55:10 on dec 3, two hours after P4 opened (0x5922375f…, 3sTEUFVC…) & upgraded at 01:22, two minutes before the fee wallet's first test. exactly five objects ever went through it: one test cap & the four bad-debt caps. the fee wallet took one out per use & put it back.

so when the earlier pages say "the position's owner borrowed", from december on that owner is alphafi's own fee wallet. on P4 it borrowed $12.47M. on P3 it pulled 1.25M ALPHA out (booked at $15.5M) on dec 25, then borrowed 1.5M USDC against what was left. P2 it topped up w 1,215,262 ALPHA the same evening. P1 it never used. the per-row receipts for each of those are on september.

P4: $12.47M borrowed, every dollar through the fee wallet

19 borrows from dec 4 2025 to jan 20 2026, $12,473,965 at the protocol's own values: 6.3M USDC, 2.1M USDT, 30M DEEP, 11 tBTC, 10 xBTC, 20M BLUE & 3 WBTC. every one was sent to the fee wallet itself & every one left the fee wallet again within minutes (the slowest after 10.5 hours). first hop:

nothing went to an exchange on the first hop. on the second, 7c26 spread it across cetus LPs, alphalend, navi, suilend & alphafi's own vaults & put about 10M BLUE into the ember BLUE vault (f71e added 10M more, in two 5M lots); 1d1c parked DEEP in an alphafi slush vault & its second position, then sent 30.5M DEEP on to 7c26; 6a49 put 2.46M USDC into a perps margin bank (bluefin's, by its module set); a027 deposited its 6 tBTC into alphalend & bridged 16 tBTC out through the tBTC wormhole gateway on dec 17. past the first hop the hubs hold 3 to 10x more than came in, so from there you can follow flows, not specific coins.

one line item worth isolating: P4's xBTC debt was entirely the fee wallet's own borrow. it borrowed 10 xBTC on dec 22, sent it to 7c26 within minutes & repaid 0.10. the sep 20 bailout paid 10.15 xBTC on P4.

the stSUI leg: P4 money, P2's creator & a collateral swap

1. jan 16 & 20 2026: the fee wallet swaps 1.5M P4-borrowed USDC into about 945k SUI. the jan 16 leg goes to P2's creator 0xdfe220ae… as 289,519 SUI (dfe2 mints it into stSUI itself); the jan 20 leg the fee wallet mints & sends on as 649,563 stSUI.
2. jan 20: P2's creator puts 931k stSUI into its own position, then sends all 931,203 to 0xf533aad2… (early jan 21). 0xf533 is a wallet born that same day, gassed & funded by P4's creator 1d1c, which also handed it the cap of 1d1c's second position 0xe6632241… at 19:52:18 (GLb8wGhy…).
3. 0xf533 deposits the stSUI into that position 100 seconds after receiving it, then withdraws the position's stablecoin collateral: 3.1M USDC + 637k USDT out, against 730k + 619k in. not a borrow (it did borrow ~$1.6M of BTC, XAUM & USDSUI on the position jan to mar 2026, all repaid since, net zero), a swap: stSUI in, dollars out.
4. where the dollars went: 1M USDC to 6a49, 900k to w9273, 500k into the perps bank & 550k into the Gate account. the 6a49, w9273 & Gate pieces each left one to three minutes after the matching withdrawal; the 500k perps deposit was funded by closing a staked LP position a minute earlier (507,493 USDC). the Gate pieces: 100,005 on feb 27 (3g45WMcJ…) & 450,000 on mar 3 (9dxNeA5j…).
5. on 2026-09-05 0xf533 sends about 976k SUI & 537k USDT back to the fee wallet.

so P4's borrowed money reached an exchange anyway, just by swapping collateral instead of borrowing.

0x20652a68: borrow, deposit, repeat

position 0x20652a68… (cap 0xcfd2e86f…) was opened on 2025-10-12 at 07:03:08 by hub 7c26 (2ZZ2djsT…), the same hub that got most of P4's borrows. 7c26 borrowed on it 55 times, $13.06M.

on 2026-01-20 at 15:20:17 7c26 sent 1 SUI of gas to a brand-new wallet, w2310 0x23108598… (FCb8nPee…) & at 15:22:37 handed it the cap (7wznhvQB…). two minutes old & holding the cap. w2310 borrowed on it 47 times ($8.87M) & made 10 deposits into the Gate account ($851,623; the tenth, 125,419 USDC, landed on oct 15 2026, three weeks after the shutdown), nothing back. seven of the first nine are the same size as a borrow it had made minutes earlier:

then the handoffs. sep 5 06:09:32 to w36e0 0x36e04ee5… (FCg5BkFA…), 17:36:48 to the fee wallet (CJGzNcWX…). on sep 6 the fee wallet borrowed 1,012,240 USDC against P2's ALPHA (FeM4bX5E…) & repaid 0x20652a68 w it within a minute (4gPgsv85…), did the same w 6.31 xBTC (GAqcErjP…, 8osFkky5…), withdrew the position's 45.977 WBTC at 16:49:29 (DkGV2D16…) & put it into f71e's position 35 seconds later (J9iHSRkt…). at 17:28:16 the empty cap went to the alphafi validator's wallet (6Fsg1zm6…).

jan 20 2026: the rotation

the fee wallet's last P4 borrow was jan 20 & so was P4's creator's last active day. the same day:

• 7c26 handed 0x20652a68 to w2310, born two minutes earlier (above).
• 1d1c handed its second position's cap to 0xf533, born that day (GLb8wGhy…).
• a third wallet, w_fe5a 0xfe5a5a76…, was born.

all three later deposited into the same Gate account: w2310 $851,623, 0xf533 $550,005, w_fe5a $48,726. three day-one wallets, one exchange account.

sep 6: how the cash-out positions became rescue debt

between 16:41:52 & 17:12:01 on sep 6 the fee wallet borrowed 5,695,574 USDC & 23.817 xBTC against P2, which by then held nothing but ALPHA, in seven borrows & repaid each one within a minute on a different team position: 0x20652a68 (above), f71e's 0x16d704cc… (3,551,828 & 1,131,506 USDC, AUHp6aWy…, Ho75AfHe…) & 1d1c's second position (8.46 & 5.23 xBTC, 9FZ7sbAE…, 6bAJNaiZ…). the collateral those repayments freed went into f71e's position: 45.98 WBTC, 1,044,211 stSUI (BJ5DKTf8…) & 46,770 SUI, swapped on the way in to 45,082 stSUI (H2kkgUYc…). that position is the "security package" the rescue side later took.

& P2's debt, now carrying those loans, is what the rescue side paid: 2,544,097 USDC through 0x5f81 on sep 9 (6eMyZgJn…) & 43.63 xBTC + 4,342,663 USDC in the sep 20 bailout. money is fungible, so no single exchange deposit was "paid by" the bailout. but the positions used for borrow-then-cash-out pairs weren't repaid by their holders. they were closed out w P2 debt & the P2 debt went to the rescue. the full sequence is on september; who paid is who paid.

the validator's wallet holds six team caps

0xa0920b07… is the alphafi validator's own wallet. five of these caps were dropped there by the fee wallet on sep 5 & 6 2026, just before the bad-debt caps went to 0x5f81 on sep 7.

that's the validator the 30M SUI delegation made possible, whose commission went to w9273, f71e & the operators' kucoin account. who paid has that part.