This 50 years stuff is never going to happen as I explained above.
Either the platform will become very successful with the rebrand and new features etc over the next year and debt will be fully repaid in 1-2 years or it will fail and the debt will never be repaid.
There is no way that the current level of activity and fees just continues exactly as it is for years and years with no change.
The insurance fund is for the benefit of the protocol - BZRX/OOKI holders are much more likely to accept part of the fees going there vs going to the debt token.
However, having said that I am fine with reducing the amount going to the insurance fund (or eliminating it) and increasing the fee share going to the debt token to about 25%. More than that and it will make the Ooki token too unattractive.
See my reply posted just now on this point. You can’t really financially model crypto - it’s not like Coca-Cola’s financial modelling in a mature industry - crypto is too immature and volatile. It’s just guess work because there’s no basis to any of the assumptions - you can reach any conclusions you want based on whatever assumptions you choose to make.
Realistically the two options are a) project does well and pays off debts quickly (1-2 years) OR b) project does badly, fails and debt is never paid off. The percentage of fees to debt token holders is not something that will make a huge difference either way - the success of the project is a much more important factor.
(This is why I didn’t do any financial modelling around this - to me, keeping a balance between Ooki holders and debt token holders was the main thing)
Have answered all questions so far. If you have any more (new) ones, happy to answer.
I understand that no one will compensate the funds asap, but even in your “if everything goes well, the debt will be paid quickly” scenario the hopeful estimation is years.
You mentioned Pickle and I agree that there are some differences, but looking at their token, they managed to burn only 18.4% for an entire year.
I lost 90% of my holdings in usdt. These funds are my livelihood and if a plan like this gets accepted, I won’t be able to earn for a very long time and I might not even see my funds again.
I am very sorry for your loss. That’s the hacker’s fault though, not mine. I tried to write a compensation proposal that was as fair as possible to everyone involved, and repaid everyone in full (over time), while still maintaining the protocol as a functioning dApp, and with enough in it for BZRX holders to vote yes on it.
It is not possible to give everyone everything they want, so I had to make some compromises. If you have any ideas on how the proposal can be modified, please let me know, but remember that every choice has consequences and doing better for one group means doing worse for another.
BadriNat, do you plan to take the 20% of fees from the users share or from the treasury share? I feel like we could get to 35-40% by taking a part from both
It’s absurd that half of the users will get compensated right away and the other half will have to wait potentially years (might not get compensated at all if things go south with the project).
I understand that you had to make compromises and I agree that no matter what happens there will be people that are unhappy, but there has to be a better way.
To make sure that people don’t get completely screwed over I would suggest editing the 20% fee to something more reasonable (I can see that quite a few users in telegram share this view). And I would also suggest using a bigger chunk of the treasury. If half of the treasury will be used to compensate the first group of affected users, I believe that it is only fair that some (not all of course) of the remaining funds should be sold and used to buy the debt token. This way the price of the token would get a little bump in the beginning, giving everyone the opportunity to take some funds out if they really need to.
Your current proposal is not fair at all. It’s biased to bzx holders and actually just bailing out only bzx holders.
Future users of the rebranded project will see that historically there was an exploit, and stakers/lenders were compensated unfairly. Do you think that this will bring success to your project and you will start generating more revenue?
Also there is a still huge risk of litigation, because the man who lost everything will try to bring everyone to the bottom with himself. Personally I don’t want to end up with debt token which is equal to zero if that happens.
To make it fair:
- Perhaps the biggest criticism about this proposal might be that BZRX holders are essentially voting to repay themselves in full from the treasury (except for the dev team who only get vBZRX) while the rest of the victims only get a debt token that may not be paid off for a long time. Leaving aside the fact that most BZRX holders (especially the large ones who are holding from the ICO in 2018) are the most loyal, long term supporters of the project, they are also some of the biggest users of the platform and have also lost money in other tokens.
It seems to me the stronger argument could be made that BZRX holders believe in the platform and therefore could have a debt token that keeps them vested in the projects success. Stakers/Lenders were using the platform for the returns and now under this proposal they are tied to the success of the platform in order to recover their funds.
But as you said, BZRX holders are the only ones voting and its unlikely they will vote for anything that doesn’t put their interest at top.
To quote jokerbra
First: I deeply disagree with the idea of dividing victims of the recent “event” to 3 groups and let group 1 vote about if group 1 gets refunded first and 1:1. This is abuse of power in it’s purest.
Its worse than a tyranny of the majority. At least in that scenario the minority get to vote! It will be a good test for the DAO to see if it overcomes or fails like traditional governance.
jokerbra’s proposal is the only fair one to date on this forum.
That is actually a pretty good point and it never crossed my mind. If the BZRX holders are all so invested in the project and are going to hold their tokens for the rest of their lives…why don’t they get the delayed compensation indeed?
That’s what i was suggesting as well. BadriNat saying they are the strongest supporters of the project and going to stay till the end. So they should be ok to have vested tokens for a long period.
I support Jokerbra’s proposal as well. It suits all parties.
To keep the DAO functioning properly we need all the BZRX in the hands of the holders so they can actually vote.
I replied to this on Telegram. Honestly, I hadn’t considered it at all when writing the proposal. I’m not sure BZRX holders will accept diverting funds meant for the treasury (since that indirectly benefits them), but it’s definitely worth considering.
I need to think about it a bit more.
I posted yesterday that I was fine with changing 20% to 25%. And I’ve just seen the new points raised about diverting funds from the insurance fund etc to possibly raise that some more, which are worth thinking about.
Selling off part of the treasury to buy the debt token (immediately) won’t work though - the lack of liquidity and slippage will hammer the price badly AND it will only raise a tiny amount of money - so low that it isn’t worth it.
I just checked on Sushi and selling only 1,000,000 BZRX has a 74% slippage. To put it another way, 1,000,000 BZRX is currently worth what? $290,000 or so? But selling with such low liquidity means you’ll only get $74,000 AND the price will crash.
@cants3eme I totally agree with your comment.
It’s fair distribution to all affected victims.
If Bzrx token holders are really stick with project so long and will be that important long term. They should get vested toke with related with success of project. But now the proposal put the guys as lender, borrower, leverage trader take all responsibility but Bzx token holders are getting 100% full refund instantly.
I’ll reply to this on his thread too, but basically
a) It’s a philosophical difference - I think the best approach is to put the health of the protocol first because the protocol’s success means everyone gets repaid faster. He thinks it is better to damage the protocol more now to put the balance in favour of the compensation in the short term. I disagree because I think it’s a short term measure and will harm both the protocol and the chances of full repayment over time in the long term.
b) More simply, it’s BZRX holders who need to vote for this, and his proposal is basically asking them to vote for shooting themselves in the face - he’s asking BZRX holders to vote directly against their own financial interests. Why would they do that? They are already being asked to vote on a proposal to compensate losses when they have no obligation to do that. If you don’t even give them their BZRX back, they will just vote against the proposal and no one gets anything.
The proposal needs to be something BZRX holders will pass (NOT all the people who lost money - they don’t get a vote)
Hello all,
I’ve mentioned this to the devs and I thought I would mention it here also. Everyone here voting on the DAO should at least become aware of the regulatory/legal sandbox within their country of origin. Not all countries are equal here, some are better like Singapore but not everyone has such freedoms and one should know where they stand. Greyness doesn’t mean freedom to do whatever you please.
In regards to the recovered funds not the DAO treasury, most industrial countries have rather strong consumer protection laws for online platforms and personal assets. For example, if the bzx developers are provided recovered assets that were personal assets on the platform and instead of returning them they give them to the DAO. That action might create legal liabilities for them. Then if any DAO members knowingly vote on said funds they may also be legally liable. Hopefully it doesn’t get to something like this but you should know where you stand.
Of course. Everyone should be mindful of their legal rights and obligations whenever they enter into any potential commercial or investment action. Just like you should always check with your doctor before starting any exercise program.
Keep in mind though that the laws around crypto and DeFi vary wildly from country to country and are generally in a legal grey area of limbo where no one is quite sure what the rules are.
This is exactly why the DAO pays for lawyers to advise the team in the USA at Morrison Cohen.
In practice, while there may be theoretical liability based on DAO votes (it’s basically just a legal theory at this point), even if it exists, the chances of anyone going after Random DAO Voter No.73 (or whatever) are extremely low - the benefits are unlikely to be worth the costs.
Also this doesn’t just apply to bZx - in theory anyone who participated in governance in any project is at risk (ever voted in Uniswap, Aave or COMP governance?), or even if you participated in Discord discussions and made suggestions that were accepted etc…
The people at most legal (potential) risk are the developers - the people with the most influence over the platform as well as the biggest token holding. Even with them, the rules are in a total grey area though, and courts are likely to look very favourably on their previous successes (before the DAO) in refunding users who lost money on the platform and the current efforts to do the same, as showing good faith and real efforts to help people (as opposed to the majority of projects that do nothing after hacks).
EDIT: Just to add that of course the current proposal explicitly says that recovered assets are to be given to the owners who lost them (unless the owners have already accepted compensation in the form of debt tokens, in which case they obviously can’t double up), so the point you’re making does not arise at all with the present proposal, although it is theoretically true.