[Deprecated] [Proposal] VSP-6 Fair Path Rage Quit

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OP re-posted due of issue with edit permissions: [Deprecated] [Proposal] VSP-6 Fair Path Rage Quit - #8 by sunshineplaza

Introductory Comments

Given the sentiment expressed in the snapshot vote initiated last week, I’d like to submit a first proposal to explore a fair path forward.

I urge everyone to put their own judgment aside during the administration of this matter. We are here to collectively find a solution that serves the objectives supported by all parties involved.

This proposal’s final form should be detailed and equitable, according to the sentiment expressed by the co-founders and the tokenholders.

I have noticed that legal was raised as a concern and I looked at what other protocols did in order to put forward a proposal. I also took into account the fact that Mikey, as the sole remaining co-founder of Vesta Finance, would like to have the opportunity to pursue the development of a new oracle-less lending platform and capitalize on what has been invested until now to get a shot at achieving product-market fit.

In summary, this proposal combines the rage quit objective with the opportunity for Vesta Finance foundations to support an organization in its goal of achieving product-market fit.

Proposal

Give VSTA holders the option to rage quit by opting in to Fork DAO, a smart contract that will allow them to exchange their VSTA for a pro-rata share of the Vesta Finance treasury (distributed in USDC and ARB).

For each VSTA that is rage quitting by confirming its opt-in on Fork DAO smart contract, the Fork DAO smart contract will receive assets from Vesta Finance treasury corresponding to the book value of the VSTA (in USDC and ARB) that opted-in and transfer it to the rage quitter.

tldr:

  • 1-month rage quit opt-in period during which all circulating VSTA (including vested VSTA) can be exchanged for a pro-rata share of the Vesta Finance treasury (corresponding to the VSTA book value, distributed in USDC and ARB)
  • Remaining Vesta Finance treasury assets will support the funding of the remaining team; if 70% of the circulating VSTA decides to rage quit, this would leave $3,291,873 of funding for the remaining founder and team

Support vs Rage Quit

Despite not achieving product-market fit, Vesta Finance has invested a significant amount of resources in order to assemble an elite team, acquire valuable industry knowledge and build brand awareness. Out of the 3 co-founders, 2 want to leave but 1 wants to pursue the opportunities he deems worth it.

This proposal suggests that tokenholders that support Vesta Finance new developments have the opportunity to keep their exposure, while the remaining management team gets ample funding to support the runway and achieve product-market fit. VSTA tokenholders that are enthusiastic about the future developments will therefore continue to provide resources needed for the release of V2.

Treasury Data & VSTA Circulating Supply

Currently, the Vesta Finance treasury holds the following assets (links to treasury wallets below):

  • 7,901,567 USDC & USDT, valued $7,901,567
  • 2,713,675 ARB, valued $2,177,656 as of today
  • 269.07 ETH, valued $431,952 as of today
  • 315,412 VST, valued $315,412 as of today
  • 33.51 gOHM, valued $100,234 as of today
  • 13,923.33 BAL, valued $46,086 as of today
  • Minus liabilities

The total treasury assets value is $10,972,909 as of today.

Links to the treasury:

The current circulating supply of VSTA is:

  • 100,000,000 VSTA Total Supply
  • (-) 71,945,131 VSTA in the treasury (a)
  • (-) 2,884,695 VSTA in the admin (b)
  • (-) 690,884 VSTA in the protocol-owned liquidity (c)
  • (-) 1,077,356 VSTA unvested (4,041,806 VSTA in the vesting contract - 2,964,450 VSTA claimable)

The VSTA circulating supply is 21,073,799.14 as of today.

This puts each VSTA book value at $0.521 as of today ($10,972,909 / 21,073,799.14).

Execution

As soon as this proposal is passed and approved, the following steps will be executed:

  1. Fork DAO rage quit funding: protocol-owned liquidity will be withdrawn, and all the Vesta Finance treasury assets except ARB will be converted to USDC.
  2. Fork DAO smart contract and front-end: Fork DAO will have 2 weeks to develop and deploy a smart contract and frontend to allow VSTA tokenholders to opt-in to the rage quit option and receive VSTA book value per VSTA that opts-in.
  3. Rage Quit Period Opening: the rage-quit period will last 1 month after the first opt-in is possible. At the end of this 1 month, there will be no more possibility to opt-in to Fork DAO rage quit.

Timeline

This proposal will remain open on the forum for comments for 7 days before proceeding to snapshot.

FAQ

As a VSTA holder, what will I need to do to participate in the rage quit?
You will need to opt-in to the rage quit option with your VSTA. You will receive VSTA book value per VSTA that you opt-in to the rage quit option.

I believe in the new project led by Mikey, can I keep my VSTA to stay exposed to its future success?
Yes, there is no forced participation in the rage quit process.

Open Questions

  • What are the liabilities for the 1 month during which the rage-quit will be open?
  • Should a solution that would involve a separate entity (Fork DAO) with its own governance token, multisig, treasury and snapshot be explored rather than the current one?
  • What would be the process to confirm that Fork DAO smart contracts are approved by Vesta Finance?
  • This is an opt-in rage quit solution, which implies that the remaining treasury value at Mikey and its team disposal is unknown. Should a solution with a fixed amount of funding be explored? - this solution would use the separate entity model, which would receive the rest of the Vesta Finance funds and become claimable by VSTA holders who migrated to this separate DAO governance token.
  • What are the requirements to ensure there will be no service interruption or degradation of service for Vesta Finance users during the 1 month of rage-quit availability?

Sentiment Gauge

  • In favor of the Opt-in Rage Quit
  • In favor of a fixed amount transferred to a separate entity that will organize the rage quit
0 voters
2 Likes
2

Interesting proposal, thanks for putting it together.
I think that the rage quit option will be in the end the real test on whether people want the project to continue or are done with it: if a lot do not claim, that means that the community still believes in the project and are willing to keep it going. But if nearly everything gets redeemed, that means that it becomes basically like a full unwind.

In the first case, I think the funds, after a certain date, should return to the DAO as they may be used to finance the project’s future growth.

In the second case, I think we should plan something to address dead supply: pointless to keep [5]% locked in a contract forever if [95]% has been claimed already.

Why not doing something like this:

  • when someone redeems he gets an erc20 which is effectively a receipt, a proof of redemption.
  • After [2] months, if less than [90]% (figures tbd) of the treasury is redeemed, then close the rage quit contract and return funds to the multisig.
  • If more than [90]% is redeemed, airdrop the rest to holders of the receipt proportionally to their size.

I think that would be optimal, curious to have feedback.

Other subject: why don’t we also swap the ARB for stables? Would be simpler, no? Otherwise it will create friction due to ARB price movements…

2 Likes
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fork dao is just a method for thefts. check what happened with fork dao solution for rook dao. stealing money from inactive holders with illegal justifications and multisig holders stealing money from that multisig too. with that evidence in public it will be legal issues everywhere to knowigly give funds to this fork dao if vesta founders know about the theft they did in the past. so that fork dao proposal is not an option unless vesta founders want inactive holders to come back later with legal claims. its not smart to give proven criminals that power.

also the poll only includes options radiers want. no option to say no so it looks like everyone agrees. that is always theyre plan

2 Likes
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I agree that it is theft, but in the case of rook I would say the thefts were actually the founders: they got away with millions of dollars as a reward for doing nothing and having let the project die, and they achieved that by holding governance hostage… Was such a disgrace.
Still think that dead supply exists (could be lost addresses, or tokens sent mistakenly to contracts, or wrong addresses). It’s generally pretty high actually. So would be stupid to not take that into account in the rage quit solution…

1 Like
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Thank you for sharing constructive feedback. I agree that there could be a proof of redemption token issued to VSTA holders that participate in the rage quit process combined with a threshold that if reached, the project should be discontinued.

I saw the other proposal that uses the strategy of a fixed amount allocated to the team and the rest shared pro-rata by rage quitters. I think it is up for debate, but in the end, it will likely produce the same outcome for the two parties (rage quitters and the remaining team):

  • With a fixed amount distributed to rage quitters, dead supply is likely to end up being shared between rage quitters after a given amount of time as we have seen multiple times that funds can end up dead in perpetuity (up for debate, no real opinion about this).

  • With an opt-in rage quit, the remaining team will probably receive more funding because of the combination of dead supply, remaining team-owned VSTA, and supporters of the long-term prospects presented by a new oracle-less lending platform.

From an execution standpoint, both have the same complexities.

Other subject: why don’t we also swap the ARB for stables? Would be simpler, no? Otherwise, it will create friction due to ARB price movements…

Up for discussion too. In the case of an opt-in rage quit, this would allow the remaining team to keep their exposure to ARB and protect their relationship with the Arbitrum Foundation. I would appreciate if some team members who contribute to partnerships or have had a relationship with the Arbitrum Foundation could voice their opinions on this matter.

I added a poll to gauge community sentiment.

1 Like
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Yes, I think that since the team has a lot of token, both options are kind of the same. The simpler the better.

2 Likes
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I suggest changing your proposal to allow for people to claim indefinitely. No complicated mechanisms, just a simple redemption that lives on forever. Here’s why:

It’s very common for people to forget about their holdings. Vesta is somewhat of a legacy project having been online since early 2022, lots of older tokenholders have already written off this project. The recent Discord activity being occupied by new entrants speak to this. As I mentioned in Discord earlier, giving people a deadline and then taking their money if they don’t act is not good because moving funds without consent is stealing. So regardless of how much interest there actually is in seeing the next products, we simply won’t find out unless we wait until all holders have realized what’s happening, which is going to be a long time. During this waiting period, Vesta cannot function because the operating funds are supposed to be locked and claimed by people.

As a result, given that the redemption sum is total book value, I suggest you to cancel the claim deadline and turn this proposal into a full redemption proposal.

2 Likes
8

This proposal has been modified to become the “full unwind” proposition, available here: [Proposal] VSP-6 - Dissolve Specification.