The Solana-based decentralized finance protocol Parrot.fi has come under scrutiny as it considers phasing out its PRT token. The proposal was presented recently and it entails distributing the project’s multimillion-dollar treasury among the token holders. Despite the substantial estimated value nearing $80 million, it implies a significant loss for the ones who believed in Parrot Finance from the onset. As it stands, the redemption rate puts the token value at a meager $0.0045 each.
Parrot Finance ventured optimistically into the crypto landscape, aiming to revolutionize crypto lending markets on Solana’s blockchain. Unfortunately, the scenario charted a different course, as was expected. Two years down the line, the protocol’s total value locked places it in the lower tier of Solana DeFi, with its token performing poorly. Even as other protocols flourish, Parrot’s value seems stuck in a rut.
In its heyday during the Solana DeFi bull run of September and October 2021, Parrot.fi raised a whopping $84.7 million selling 10% of all PRT tokens to the public. But those tokens have since spiraled downward by a distressing 88% of their value concerning data from Cryptorank. This leaves the treasury still piling millions while investors are left high and dry.
The redemption plan notably gives precedence to Parrot’s internal employees and venture investors. Astoundingly, they unlocked all remaining team and VC tokens two years ahead of schedule. The altered schedule apparently awards insiders a redemption price of $0.055, 22% higher than the committed rate for public investors. Predictably, it irked the community members, lighting a fire under the whole situation.
The intriguing aspect is, while the token bites the dust, the protocol will continue to persist. The process would, effectively, curtail any power PRT holders might have hoped to wield over the protocol. An interesting point to consider, especially given that Parrot was projected as a decentralized autonomous organization (DAO) according to PartyParrot, yet never quite managed to step into that role.
The proposed redemption has divided the community with opinion swinging from outrage by long-term holders, to a grudging acceptance by the newcomers. At present, the vote for the buyback is hugely in favor, although it falls short of achieving quorum. The vote is open for another week, but sentiments from the community paint a disconcerting picture, dismissing the whole process as a meaningless charade.
In conclusion, while the pseudonymous Crypto_Boi labels this redemption as a “robbery”, he surprisingly supports it, reasoning that it’s the only viable option in the face of a year and a half of no substantial progress and the perceived draining of treasury funds by the team. All eyes are now on Parrot.fi, waiting to make out where this convoluted situation eventually lands.
Source: Coindesk
