Hello everyone! This article is meant to be a recap of the recent AMA and provides some clarification regarding the proposed ADEL<>AKRO token merger. First, here is a summary of the AMA. Please take your time and read it carefully. It is a long-read as we wanted to address as many of your questions as possible. It covers 5 main groups:
- Hack Compensation Plan
- yEarn merger: a re-cap
- yEarn merger: post-merger AKRO tokenomics
- AKRO<>ADEL swap: motivation
- AKRO<>ADEL swap: why does this decision not qualify for a governance vote.
Let’s kick off.
Hack Compensation Plan
- yEarn team has set up an IOU token — Artem (banteg) has written the initial code, you can view the Github repo here.
- We will be deploying the code & distributing the token itself in January.
- Pytho (name of the IOU token) will be pegged 1:1 to the funds lost, meaning that it will be 1:1 to token balances + unclaimed yield (if any) of affected users.
- Compensation itself will come from % of a yield earned by using Vaults — we will be receiving part of fees from yEarn treasury based on the amount of liquidity provided to yEarn via Akropolis.
- This means that for the purposes of the compensation there won’t be any additional fees taken from users. Therefore, APR yield won’t be affected. The only fees would be from yEarn vaults — but they also do not affect yield apart from a withdrawal fee.
- Part of the losses will be compensated via vested AKRO tokens, we will share more information about it in January.
- As to how much time will it take to compensate the users — this will depend on the number of users & liquidity Akropolis can attract, as well as on creating new revenue sources for Delphi (referral fees, strategy originator fees based on Vault strategies created, etc).
yEarn Merger: re-cap
- The yEarn merger decision did not fall within our formal governance structure as it was not part of the governable parameters laid out previously (also mentioned above).
- Additional rationale by the yearn team for the merger not going to a vote is here.
- Post-merger product strategy is to focus on a singular product suite: synthetic high-yield accounts, comprising yearn’s vault code base + any proprietary yield products currently in R&D or MVP phase respectively.
yEarn Merger: post-merger AKRO Tokenomics
- AKRO will stand to accrue a TVL referral fee on funds that enter yEarn vaults/pools through our UI.
- The yEarn team is focused on the underlying vaults and aims to become a provider of vaults-as-a-service.
- Many other aspects outside of the core tech, such as business development, regulatory and other issues are outside of the focus of the core team and something that we can take on, where our natural strength lies as a wider team.
- Conversely, we benefit from close technical collaboration, leveraging the standartised tech stack, unified security processes, and the wider yEarn ecosystem.
- AKRO holders will also receive revenue share via fees from our native yield-generating products.
- New yield generating products are currently in the R&D phase and they will represent a distinct product set outside of the vault space.
- AKRO acts as a governance token for the parameters mentioned below:
- Product features and integrations;
- Propose new Vault strategy;
- Propose Vault strategy selection/creation framework.
ADEL<> AKRO Swap: Motivation
- Prior to the AMA, we have received multiple questions and proposals surrounding the idea to merge ADEL<>AKRO.
- The original idea of ADEL was to distribute it to Delphi users to incentivise governance as a large amount of AKRO was already concentrated on CEXes when Delphi was launched. We always stated: use Delphi and earn ADEL, don’t buy it.
- Why? Because ADEL is a utility token with the main purpose to participate in Delphi governance and Development. Delphi wasn’t on our original roadmap and we went from idea to testnet in ~1 month then to mainnet in 2 weeks, with the whole development being funded by the Akropolis team.
- However, ADEL was also bought on the open market and AKRO and ADEL token holders formed two distinct camps, each vying for their own agendas which were often at odds with the long-term future of the project.
- With the yEarn merger and decision to narrow down the product focus to solely a yield generator and aggregator product suite, the distinct value proposition between ADEL and AKRO stopped being relevant and presented dilution of the team’s effort, attention and time.
- To cut down on the complexity of our token model and provide distinct value to our native token holders, the team decided to write a proposal about separating products for AKRO and ADEL and proposals to swap ADEL into AKRO for holders that would like to swap (in progress).
- All ADEL holders will have a choice to swap ADEL for AKRO at a ratio defined by the amount of AKRO that can be allocated out of the treasury, it is NOT dependent on price (we are in the process of determining that allocation now). Additionally, vested ADEL rewards can also be swapped for vested AKRO. More tech details on swap will be available in January after we will discuss the process with the tech team.
ADEL<> AKRO Swap: Why no governance proposal?
- The team is not merging ADEL and AKRO tokens. Delphi as a product has been built and will be re-launched after post-hack fixes and audit.
- Meanwhile yEarn integration and new yield generating products were not on the original roadmap. A clear distinction between the two tokens and governance around each has been provided in this article dated August 3, 2020. The Team has stated from the outset that AKRO will be the governance token for all new and past products of Akropolis, apart from Delphi where 2 tokens were used for the governance.
- The team is giving away _their AKRO_ rather than increasing supply, a decision which will clearly qualify for a governance vote if and when it comes to it. The team volunteering to carve out a block of AKRO tokens from the team’s own reserves clearly does not require anybody’s approval.
- AKRO governance will decide what to do with ADEL tokens that the team will receive in exchange for AKRO.
- The remaining development fund comprising ADEL tokens will go to the Delphi community if they decide to continue working and developing Delphi.
- Delphi V1.0 and V2.0 are merely working names, we may change the name of the platform to avoid the confusion.
- Jan 2021: detailed rate and mechanics of the ADEL<>AKRO swap announced
- Jan-Feb 2021: yEarn vaults v1 and v2 integration
- Jan-Feb 2021: Cover and Nexus Mutual embedded insurance: governance vote and potential integration
Post-merger, we decided to narrow down the product focus to optimise for fee generation and security. With that in mind, we and many others who reached out to us believe that a single token with a clear value accrual model is the only meaningful way forward for all tokenholders. This was the starting point for the AMA, which this is a summary of.
As with anything, there are pros and cons when making decisions — especially those that involve things of value. It is impossible to please everybody, and a loud minority can often have an outsized effect on the rest of the community. A figure known to us paid the members of his telegram group to spread slander and rumours in our social channels during and after the AMA. Please be diligent and follow updates that come directly from a team member. We value our genuine supporters who took the time and effort to contribute and participate in governance and product ideation, and we are working hard to build a product that moves DeFi forward.
If after carefully reading this article you still have any questions, don’t hesitate to send a DM to Kate @tomboytrader.
We wish you a happy New Year and apologise for any miscommunication earlier.