A recent proposal from the Parrot Protocol team, a Solana-based liquidity network, has sparked controversy among members of its community. That suggestionup for a vote until July 27, calling for the redemption of PRT tokens for liquid treasury value, and a transition to a tokenless protocol.
According to the proposal, the PRT redemption price is set at $0.0045 per token. According to for data from CryptoRank, the protocol raised over $89 million since starting in 2021, with a current return on investment (ROI) of -89% for investors in Initial DEX Offerings (IDO) and initial exchange offerings (IEO). Having a negative ROI indicates that the investor has lost money on their investment.
Today in government is news of errors: @gopartyparrot the team is taking their remaining $72 million in ICO funds and trying to split $12 million to token holders, $60 million to the team.
Oh, they also unlock their tokens early and will vote for them regardless of what anyone else says pic.twitter.com/vmhDXJochQ
— Spreek (@spreekaway) July 21, 2023
The protocol plan did not explain the rationale behind the move, mentioning only that “many PRT holders wish to redeem their PRT tokens for their treasury value.” The proposal also follows Parrot’s tokenomic changes from November 2022, when the protocol shortened its token lock-in period from 12 months to 7 days, it claims will “create more flexibility for stakeholders to enter or exit their positions.”
Comments from community members show that 81% of tokens are controlled by the team. However, the Parrot team disputed the claim state on Twitter that treasury tokens are never touched or used for governance purposes. The details provided by CryptoRank show that 35% of the tokens are distributed as Protocol Incentives, 20% as Teams & Angels, 10% as public sale, 20% as Seed spins, and 15% as Other.
Parrot Protocol Token Sale. Source: CryptoRank.
Additionally, the proposal does not clarify how unclaimed funds will fare after the 8-week redemption period, with community members suggesting that the funds could be disbursed by insiders.
“The community has explained in great detail why we are not interested in this. The pro rata value is very low and fails to explain the team’s multiple abuse of treasury without community consent. The team also prematurely unlocked the team and VC token vesting, so they are the majority token holders, making this vote meaningless and a total joke,” wrote one community member during a discussion of the proposal.
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