A contentious proposal put forward by the team behind Parrot Protocol, a prominent Solana-based liquidity network, has ignited a heated debate among its community members.
Scheduled for voting until July 27, the proposal calls for the redemption of PRT tokens at a fixed rate to determine their liquid treasury value and proposes a transition towards a no-token protocol.
The PRT redemption price has been set at $0.0045 per token. According to data from CryptoRank, the protocol managed to raise over $89 million since its inception in 2021.
However, investors who participated in the initial DEX offering (IDO) and initial exchange offering (IEO) have suffered a current return on investment (ROI) of -89%, indicating significant losses on their investments.
The proposal’s lack of detailed explanations behind the move has raised concerns among community members. While the team claims that “many PRT holders” expressed interest in redeeming their tokens, the rationale for shifting towards a no-token protocol remains ambiguous.
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This proposal follows a previous tokenomics update in November 2022, in which the token locking period was significantly reduced from 12 months to just seven days, supposedly to offer stakeholders greater flexibility in managing their positions.
A tweet from @spreekaway on July 21, 2023, criticized the governance decision, stating that the Parrot team intends to allocate $12 million to token holders and retain $60 million for themselves from the remaining $72 million in ICO funds.
Furthermore, there have been allegations that the team unlocked their tokens ahead of schedule, undermining the voting process.
Claims that the team controls 81% of tokens have been contested by Parrot’s team on Twitter. They assert that treasury tokens are not utilized for governance purposes.
According to data provided by CryptoRank, 35% of tokens were allocated as protocol incentives, 20% to the team and angels, 10% through public sales, 20% during seed rounds, and 15% for other purposes.
The proposal’s lack of clarity regarding the fate of unclaimed funds after the eight-week redemption period has added to community concerns.
Some members fear that insiders might cash out the unclaimed funds, which could further exacerbate the situation.
Community members have expressed strong opposition to the proposal, stating that the pro-rata value set for the redemption is unreasonably low and fails to account for alleged misuse of the treasury without community consent.
The premature unlocking of team and VCs vesting tokens has also been cited as a reason to question the legitimacy of the vote, with some members dismissing it as a meaningless exercise and a farce.
As the voting deadline approaches, tensions within the Parrot Protocol community continue to escalate, and the outcome of the proposal remains uncertain.
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