A recent proposal from Parrot Protocol, a Solana-based liquidity network, has ignited a heated debate among its community members. The contentious proposal, set to be voted on until July 27, involves the redemption of the platform's native PRT tokens for their liquid treasury value, leading to the transition towards a no-token protocol. However, this move has been met with accusations of a "financial crime" from some community members, who express concerns about the impact on token holders and the lack of transparency surrounding the decision.

Redemption Price and Negative ROI:

The proposal outlines a PRT redemption price of $0.0045 per token. Notably, since its inception in 2021, Parrot Protocol managed to raise over $89 million, but the current return on investment (ROI) stands at an alarming -89% for investors who participated in its Initial DEX Offering (IDO) and initial exchange offering (IEO). This negative ROI implies that investors have suffered significant losses on their initial investments.

Reasons Behind the Move:

Curiously, the proposal fails to provide clear reasons behind the decision to redeem PRT tokens for their treasury value. The only explanation given is that "many PRT holders would like to redeem their PRT tokens for their treasury value." This lack of transparency has raised suspicions among community members, who are seeking a more comprehensive rationale for the proposed transition.

Tokenomics Changes and Team Control:

The situation becomes more contentious due to previous changes in Parrot Protocol's tokenomics. In November 2022, the protocol reduced its token locking period from 12 months to just 7 days, citing the intention to offer stakeholders more flexibility in entering or exiting their positions. However, community members have pointed out that 81% of the tokens are allegedly controlled by the team. The team, on the other hand, has vehemently denied these claims and asserted on Twitter that treasury tokens are never utilized for governance purposes.

Token Distribution and Unclaimed Funds:

Data provided by CryptoRank reveals the distribution of PRT tokens, with 35% given as Protocol Incentives, 20% to Team & Angels, 10% allocated to public sales, 20% as Seed rounds, and 15% categorized as Others. Interestingly, the proposal fails to clarify the fate of unclaimed funds after the 8-week redemption period. Concerns have been raised by community members who speculate that insiders might cash out these funds, leading to further unrest and skepticism.

Community Backlash:

Community members have voiced strong opposition to the proposal, arguing that the pro-rata value offered for redemption is unreasonably low and disregards instances where the team allegedly misused the treasury without obtaining the community's consent. Additionally, accusations have been made that the team prematurely unlocked the vesting tokens for themselves and venture capitalists, thereby making them the majority token holders. This has led some to dismiss the vote as meaningless and label the entire process as a farce.

In Summary:

The Parrot Protocol's proposal to redeem PRT tokens for liquid treasury value and transition to a no-token protocol has proven to be highly controversial among its community members. The lack of transparency, negative ROI for investors, and allegations of team control have fueled tensions and skepticism surrounding the proposal. As the voting deadline approaches, it remains to be seen how the situation will unfold and whether the community's concerns will be addressed by the protocol's team. #PRT #ParrotProtocol #solana #SOL $SOL