[Proposal] VSP-5 - "Optional Rage Quit to Give Team Runway" Specification

1

Updated Sep 15: changed runway from $2m to $1.5m

Summary

A community-driven vote has opted for the option of rage quit where some runway is reserved for the team. This proposal details how it could be done.

Tl;dr

  • Unlimited redemption period at ~$0.46 per VSTA for all vested token holders
  • Minimum $1.5m runway for the remaining team to realize the vision of oracle-less lending and beyond
  • Sunsetting of Vesta Finance
  • All parties aligned and happy

## Motivation

Over the past year and a half, Vesta has been committed to building out a robust and efficient CDP stablecoin on Arbitrum - VST. While the project had found some success throughout this DeFi bear market, it has failed to reach significant PMF. This, combined with much internal strife between the founders, has led to multiple roadblocks when trying to ship effectively.

As seen by VSP-1 and VSP-2 proposed by the two of the three founders, Atum and Midnight, this problem has bubbled over putting Vesta to a halt right before the release of V2’s Hearth Upgrade. The frustration was so overwhelming that they proposed to dissolve the whole project.

However, many folks on the team are still committed to building unique and effective products in DeFi within the Arbitrum community. Over the past six months, Mikey has significantly increased Vesta’s research and product design capabilities in DeFi by onboarding two mathematicians. As mentioned by one of the two researchers, Vesta has already produced a design for a new oracle-less lending protocol. Before this rage quit/dissolution incident, two engineers on the team had already committed to flying in to the office work together with the researchers, ensuring maximum output and communication.

The contention between the many issues have resulted in many proposals, many of them overlapping with one another. In the midst of the discussion, a community member went ahead with a first vote in an effort to gauge for the community’s preference between “full dissolution”, “optional rage quit” and “no action”. Over three days of voting, the majority voted for “optional rage quit” where some runway is provided for the team to continue building.

Given this preference, this proposal will make an effort to outline what an optional rage quit that gives the team some runway could look like. This proposal will enable all VSTA holders to redeem for a piece of the treasury, allowing everyone with a VSTA holding to leave in a peaceful manner, and continue to provide runway to the remaining enthusiastic team to see oracle-free lending and future products to fruition.

Specification

After extensive conversation with the remaining team members of Vesta, I conclude that it would be fair to leave Vesta with $1.5m to deliver oracle-less lending as well as to continue the cryptography research. The fund will be able to sustain the team for two years given a small team of highly-skilled engineers, DeFi researchers, cryptographers and product people. The fund will also cover overhead and potential emergency costs.

To make the result truly reflect the opinion of the community, team tokens should not be able to vote. But anyone else, including advisors, angels, public sale participants, secondary market participants, etc. should all be able to vote in this matter.

Data

accurate as of 2023 Sep 15 2:29 AM PST
Treasury

  • Total treasury = ~$11.3m
  • Total to be reserved for the team = $1.5m
  • Total to be distributed = ~$9.8m

VSTA
Total Supply = 100,000,000
- 71,944,131 VSTA in the Treasury MS
- 2,884,695 in the Admin MS
- (8,698,074 total VSTA in the Vesting Contract - 5,292,584.11 claimable)
- 668,595 VSTA in POL on Balancer and DefiEdge
= ~21097089 Circulating Supply of VSTA

Total to be distributed per token = ~$0.46

Logistics

Upon passing of this proposal:

  • Pause vesting contracts and burn the remaining VSTA
  • The protocol-owned VSTA-ETH LP will be withdrawn to cease trading
  • The final calculations will be re-assessed as the composition of the LP may have changed
  • All other treasury assets aside from USDC and ARB will be sold to USDC
  • Vesta will then deploy a contract and frontend interface for redemption

Please note that the capital will be forever immediately claimable.

Finally, the Vesta Finance product as is will be sunset by the remaining team through a process that will be defined in a follow up forum post if this proposal is to pass.

Timeline

Given that this topic has been top of mind for the community for the past week, I would also like to kindly ask governance to forgive this proposal from the 7-day minimum discussion period requirement and instead have a 3-day minimum discussion period.

Once the vote passes, the team will spend two weeks building the frontends and contracts for the redemption before starting the redemption.

At the same time as the redemption period, the remaining team will begin sunsetting Vesta Finance and proceed to build out their new vision and product.

Voting Choice

For: support this proposal
Against: against this proposal

Sentiment gauge

  • For
  • Against
0 voters
2

the amount for remaining team is too low. that should be $4m minimum to be honest for the big goals that exist for the future. funds were raised for product building and not enriching rfv radiers. so more funds should be allocated to building crypto products even if rfv radiers are able to bully everyone into profits. $4m runway is just the minimum acceptable outcome here.

3

hello I am a longtime vesta user. I do not actually own much VSTA so maybe my opinion doesn’t matter. happened to come across the recent events, and saw this proposal which appears to be sponsored by the team, or based on conversation with the team members.

from the perspective of working in startups, the vesta team here is asking for 2 million dollars funding for a project, but are giving no equity in return to those who fund them.

if the vesta team wishes to sunset the current product, but to continue building their venture, traditionally they have two options:

a) sunset the current project in a full dissolve, then re-raise capital via token issuance for their new venture
b) allow tokenholders to retain a stake in the new project in return for runway. there are many ways to do this; it can include only tokenholders who decline to redeem, or also include tokenholders who redeem (tokenholders who redeem receive 0.44 and a proportional share of the new project)

all that to say, I think Vesta has been a decent product to use and maybe there is a solution where the team receives funding to continue, but if it does happen it should happen in a fair way, where those who are funding the runway still receive stake in the project. It would not be right for the team to cash out their current VSTA, and then take an additional 2m to continue building themselves while retaining all the (new) equity.

there are many ways we can work around this as mentioned; if the team really wishes to take this private they can also forfeit their own VSTA tokens for the purposes of redemption and shift that equity to the new project so it is entirely employee-owned.

in any case, lots of options, hopeful that the team and community can work something out that is fair to everyone involved

2 Likes
4

Free $2 million check? A lot of money without anything in return for Vesta token owners.

5

I would like to suggest a few modifications to the proposal for the purpose of clarity:

  1. The remaining team will receive $1.5M funding from the Vesta Finance treasury, this proposal should include the steps of transferring the funds from the Vesta Finance treasury to the new multi-sig (and also mentioning who will be the signers, for legal purpose?) controlled by the remaining team.

  2. As of today, ARB represents ~20% of the total value of the treasury. I suggest that the $1.5M funding received by Vesta remaining team should be 80% in USDC and 20% in ARB. The value of ARB should be calculated at the moment the transfer of funds cited in (1.) is executed.

  3. It would be beneficial for the proposal to have updated numbers about the circulating supply, and more precisely about the vesting contract: Vesta Finance: Vesting VSTA | Address 0xefd767f55534b09617150434d9e35bff4b1c96b0 | Arbiscan. The vesting contracts have currently 6,246,248 unclaimed VSTA, can we know the exact number of claimable VSTA out of this number?

  4. I would like to suggest including a receipt token received 1:1 for VSTA redeemed. This could prove useful in the future for legal matters in the eventuality that a new token was issued by the remaining team, and they would like to give preferential equity options for previous VSTA tokenholders.

  5. The proposal should include the list of the 4 wallets addresses (https://zapper.xyz/bundle/0x4a4651b31d747d1ddbddadcf1b1e24a5f6dcc7b0,0xc9032419aa502fafa107775dca8b7d07575d9db5,0xb891586271c15816225ecced3bdea5ac463a2c4e,0x5f153a7d31b315167fe41da83acba1ca7f86e91d?label=Vesta&id=0x6c836e5501ba82fd79b9043af0895cfb4f677505&tab=dashboard) that are part of Vesta Finance treasury, to be better identified.
    These wallets and the consolidation steps of the treasury should also be part as a step of the proposal.

  6. For now, we have no visibility on the current liabilities, could the author of the proposal start a public discussion on Discord with the founders to have certainty about this number?

  7. The remaining team will receive $1.5M in funding, and be able to redeem their VSTA tokens. Therefore, as this is fresh funding for a new company or organization that will be free of any capitalization table or external oversight, could the proposal elaborate on the use that will be made of the $1.5M funding? Something very short, for traceability and motivation purposes.

1 Like
6

The way I read this it sounds like Mikey gets to triple dip. He get’s paid whilst working for the protocol, he gets to cash out his tokens at 0.46c and he gets 1.5m of equity in the new project.

If the runway of 1.5m comes from the Vesta treasury then surely Vesta holders should still have an equity piece in this new venture.

If Mikey were to forfeit his tokens then I believe it would be more equitable for him to take his piece of the new venture as the rage quit price of the remaining Vesta would increase by Mikey’s share.

I have no issues with the logistics other than that the capital being forever claimable may be an inefficient use of capital. Hopefully every one that is eligible will claim but at some point it becomes apparent that it will never be claimed. What happens to a contract with $2mm still in it in 5 years?

7

Also it should be ratified why the number is $1.5m, as it looks like an arbitrary figure at the moment. I’d also like to see the liabilities clearly laid out and some further clarity regarding vesting tokens.

8

In regard to my point (3.), please find below updated figures for the VSTA circulating supply:

The current circulating supply of VSTA is:

  • 100,000,000 VSTA Total Supply
  • (-) 71,945,131 VSTA in the treasury wallet 0x4a4651b31d747d1ddbddadcf1b1e24a5f6dcc7b0
  • (-) 2,884,695 VSTA in the admin wallet 0x4a4651b31d747d1ddbddadcf1b1e24a5f6dcc7b0
  • (-) 640,803 VSTA in the protocol-owned liquidity wallet 0x5f153a7d31b315167fe41da83acba1ca7f86e91d
  • (-) 3,704,440 VSTA unvested (6,245,205 VSTA in the vesting contract - 2,540,765 VSTA claimable)

The VSTA circulating supply is 20,824,930.40 as of today.