If it becomes obvious after a certain date that remaining users will not be made whole and the protocol will not survive without the Foundation stepping in, then the DAO should request the Foundation to use its resources to keep the protocol alive. If the protocol doesn’t survive, there would be no reason for the Foundation to continue to exist (other than because their members want to keep the money). The Foundation used its voting power to keep LM going during V2, and should be at the table in finding a solution.
While we can’t force the Foundation to do anything, we can put pressure on them to use their resources to rebuild trust in the protocol, which will not happen if users are left out to dry.
In the event the Foundation refuses to act, I suggest the DAO approves retaining outside counsel. The conclusion that the Foundation is not responsible is a legal conclusion, and should not be accepted without proper due diligence.
This proposal isn’t going to force the Foundation to do anything; however, given the Foundation was responsible for incentivizing the creation of the protocol, they should be engaged in this process.
The intent of this proposal is to open a dialogue with the Foundation. We all want the protocol to succeed, and I am not saying that we should first run to the protocol for our governance. However, if the protocol fails, what is the point of the Foundation?
Everything should be on the table, and engaging and discussing with the Foundation is part of that.
This is exactly the right target. The Foundation farmed on bancor and voted to increase rewards which they benefited from substantially. They raised $153m in Eth at June 2017 prices so they are LOADED. Additionally, what is the point of a Foundation with hundreds of millions of dollars if the protocol dies? We need to shine a light on the Foundation and get them to honor their obligation to support the protocol. They are best suited to fund the gap of ~$20m of current users in Bancor and that can reestablish trust. Nothing Bancor does from this point forward matters if trust is not established. The Foundation must be pressured to commit support in some fashion here, there are dozens of ways that support can be structured, but they remain the single best positioned party to pull us out of this mess.
The foundation funds the development of the protocol but there’s a clear separation between funding the development a protocol and governing the deployment which is done by the DAO.
Imagine that there was a security issue and ALL funds would be stolen from the protocol, would the foundation need to compensate users for it? It doesn’t make sense, the foundation isn’t insuring user funds.
Also, people forget the details but half of the amount the foundation raised went into the original ETH reserve/price floor smart contract, so cut that number by half. And on top of that, ETH crashed 60%+ shortly after while the foundation kept funding the development of the protocol for years since then.
Bottom line, the only way that users get compensated is if the BNT community decides to do that.
I understand your position, but let’s let the Foundation speak for itself. We’re giving lots of reasons the Foundation may not want to step in, but there are lots of reasons they may want to step in. Why take that solution off the table? Everything should be fair game.
We can wait a couple weeks for the team to propose a fix, but failing that, why not pursue every possible angle?
Why are you trying to eliminate potential remedies? However much hand waiving you want to do won’t take away the fact that the Foundation has an obligation here. They benefited from LP rewards, voted to continue them, raised $153m of June 2017 priced Eth. They backstopped the hack. You and others keep looking at the DAO, but the DAO has very little control here. The Foundation is best suited to rectify this, be it through outright payment, purchasing BNT in a buyback, a loan, or some other mechanism. The Foundation hired the Devs that made this mess and shilled it endlessly as being the safest alternative. Its time the Foundation come to the table and work with the community or there simply wont be a Bancor Protocol because no one will trust anything they say.
The last information we got about the foundation treasury was that there’s enough to fund the development & marketing for years to come. What is the point of that if it can’t bail the protocol out from dying? If say 10% of that treasury could be used here, isn’t that better than any marketing?
This is the worst state the protocol has ever been again. I doubt anyone would argue against that.
Along with coming up with an action plan to make the protocol self-sustainable in the future, the users who have suffered should be given an option to be made whole again. Add a 30-90 days period if need be. But if this is not done, no new user is going to trust Bancor again.
I’ve updated the post to include a separate DAO vote in the event that the Foundation does not agree to act to protect the protocol.
The vote would be whether to use protocol funds to retain outside counsel to vet whether the Foundation is responsible. This would allow us to properly make that determination on our own rather than relying on a the determination of a party that clearly has adverse interests.
The foundation’s treasury is probably being greatly over estimated here tbh. I would love it for users to be made whole but not if it means destroying all the runway left for Bancor’s development. I would venture to guess the foundation probably has closer to 30-40M at most just based on the amount of time that has passed, price fluctuations throughout that time, and the price floor contract Yudi mentioned. Either way this is not why the foundation exists and a legal battle seems rather counter productive and futile to me. Also as far as the comments that the foundation voted one way or the other, the foundation has always waited for a definitive answer to be reached and then voted alongside it to help reach quorum and since the abstain feature was added it’s let users make the choices. Over all my opinion is that infighting is just a net negative and a complete waste of time and energy.
To add to this, its important to understand the financials of a lawsuit. Best case you find a law firm to work pro-bono, in which they are paid as a percentage of the results of a suit. These rates on the back end are typically substantial, especially given the complexity of this situation, as time is working against you given typical attorney fee structures. That said, even if the case is “successful” in a full payment from the foundation, a significant portion of that payment will be captured by the legal team, in which case, you’ll either be break even to where you are now (with everyone worse off) or in a worse position because you’ll be charged for more than you bargained for, given the multi-jurisdictional nature. To that point, highly likely you or some group will have to pay some contingency fees along the way, and in no case will the DAO/Foundation fund a law suit against themselves. Its much more complicated that it seems, and significantly more costly too.
Also, not a lawyer, and could be wrong, but wanted to bring this framing to the thought process.
If the price floor contract exists, why was BNT allowed to collapse if 75MM usd in ether was backing it.
Aswell, runway does not matter, if the foundation abandons the entire principle that it set out to achieve. What is to stop future users in the defi sphere from going to sushiswap or uniswap to achieve yield. The only value proposition for bancor was ILP, and failing to meet ILP, it will not matter if you have a day of runway or fifty years. The protocol will die, because it can not work as intended, and it does not generate value that makes it worth using.
I don’t have time for this, but someone should do an analysis of the effect that the Foundation has had on every snapshot vote.
For example, if the Foundation voted “Abstain”, then see whether their Abstain vote led to the quorum requirement being met.
I think the “Abstain” vote is just a wolf in sheep’s clothing to get certain votes passed the quorum requirement. And had they not voted “Abstain” those proposals would have failed.
This shows that the Foundation had significant influence in DAO governance. So statements exonerating the Foundation from any liability here because they had nothing to do with the DAO are patently false.
Also on another note, there are many smart people who have the opinion that the Foundation does not have the degrees of separation that the team and hardcore community members are suggesting. To say that the Foundation had absolutely nothing to do with the Bancor DAO is likely the minority opinion.
@yudi could you elaborate a little on what you meant here?
I did previously request that an absolute last resort solution could be for the foundation to make users whole ( after a time limit / or after deficit grows to X / or after X amount of attempts to fix etc ). If the foundation agreed to something like this, it would give users the confidence to not remove their LP positions and prevent another exodus, since the foundation would essentially guarantee existing LPs funds.