The proposal calls for the redemption of PRT tokens for liquid treasury value, and the transition to a no-token protocol. Community members referred to the move as a "financial crime".
A recent proposal from Parrot Protocol's team, a Solana-based liquidity network, has sparked controversy among its community members. The proposal, up for vote until July 27, calls for the redemption of its PRT tokens for liquid treasury value, and the transition to a no-token protocol.
Based on the proposal, the PRT redemption price was established at $0.0045 per token. According to data from CryptoRank, the protocol raised over $89 million since its inception in 2021, with a current return on investment (ROI) of -89% for investors in its Initial DEX Offering (IDO) and initial exchange offering (IEO). Having a negative ROI indicates that investors have lost money on their investment.
Today in governance was a mistake news: @gopartyparrot team takes their $72m remaining in ICO funds and attempts to split it $12m to the token holders, $60m to the team.
— Spreek (@spreekaway) July 21, 2023
Oh they also early unlocked their tokens and will be voting it through regardless of what anybody else says pic.twitter.com/vmhDXJochQ
The protocol's plan does not explain the reasons behind the move, only mentioning that "many PRT holders would like to redeem their PRT tokens for their treasury value." The proposal also follows changes in Parrot's tokenomics from November 2022, when the protocol shortened its token locking period from 12 months to 7 days, claiming it would "create more flexibility for stakeholders to enter or exit their positions."
Comments from community members indicate that 81% of tokens are controlled by the team. However, Parrot's team has refuted these claims by stating on Twitter that treasury tokens are never touched or used for governance purposes. A breakdown provided by CryptoRank indicates that 35% of tokens were distributed as Protocol Incentives, 20% as Team & Angels, 10% as public sales, 20% as Seed rounds, and 15% as Others.
Additionally, the proposal does not clarify what would be the fate of unclaimed funds after the 8-week redemption period, with community members suggesting the funds could be cashed out by insiders.
"The community has already explained in painstaking detail why we're not interested in this. The pro-rata value is an extreme lowball and fails to account for many of the team's misuses of the treasury without the community's consent. The team also prematurely unlocked the team and VCs' vesting tokens, so they are the majority token holders, making this vote meaningless and a total farce," wrote one community member on the proposal discussion.
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