This has not been decided yet. The reason for not having a fully open public and premissionless sale has been addressed in my earlier response. Speed and uncertainty of the market. If we wait for 100% buy in from everyone, and a full public sale process and ETH or LDO drop significantly the whole thing is moot.
Who is the penultimate person or entity that is best in class and can buy $10M relatively quickly? I have been fielding meetings non-stop to try to find the local best I can in a very short window.
If the community votes for a lock up there will be a mandatory lock up. If the complaint is current LDO holder distribution, again what is your suggestion? One voice, one vote? Use stETH? That takes more time.
To reiterate, we are not perfect, but at the same time, we have built the best liquid staking protocol on the market. Hindsight is 20/20 when self reflecting and we can either continue to improve and get better or give up.
This snapshot is focused only on the 1% allocation to DragonFly and whether to add a lock up, keep the deal as it is or hold and work on a better solution.
The other 1% of the sale will be determined after this vote for simplicity, focus and speed of execution.
I wrote those and Snapshot has a hard character limit. I didnât have LDO on my wallet while mobile so Zuzu helped with the actual proposal launch.
DragonFly said, highlighted for ease:
This means it is not impossible, many funds have multiple structures. I cannot transcribe every word of every conversation on the forum.
So if the community thinks this is a non-starter without a lock up, we add a lock up. If Dragon walks then so be it. We now have more data to improve the proposal from the feedback.
weâre splitting hairs⌠it doesnt reasonably seem like theyre open to a lockup deal from the quote you sent.
the 3 option vote appears to be a way to push the no lockup through, as people not wanting the proposed deal would be split between no deal and 1yr lockup.
seems sketchy tbh.
I would recommend revising the vote.
And the third option should not be âno needs more workâ. its âno to dragonflyâ. or else we keep voting over and over again.
tldr, because dragonfly pushed for their own vote and was granted it, the options need to be âyes to proposed deal with dragonflyâ and âno to proposed deal with dragonfly, and we move on from themâ
b. The entity weâre using to purchase LDO tokens from the DAO has liquidity restrictions. This means itâs difficult for us to invest in illiquid token deals, hence the no-lockup structure of this deal.
Iâm scratching my head trying to figure out why this would be. . .asked a lawyer whoâs better at fund work and they couldnât figure it out either
private VC funds (what Dragonfly is registered as) donât have hard liquidity requirements, and typically donât self-impose them either. . .it would kill the VC investment model
how do you do all your other token investments, which doubtless did require lockups?
imo, the vc has already shorted on perps and fully structured the trade, so they need to cover the short if theres a large price movement upwards by selling the ldo. they think they have the votes so they probably already locked in their price.
what makes this worse is that the head dude from dragonfly apparently said on a podcast that protocols should not accept no lockup deals from vcs.
ah okay, that should be front and center in the proposal as people should knowâLDO is being sold to a hedge fund, not a VC fund, even though both are called âDragonflyâ
to me thatâs yet another reason to be a no on this proposal. . .as they can dump fast if they want, no matter what they say here about âcurrent intentionsâ
Top one voted address, which holds 15MM $LDO, made its first vote on Lido space with âFor-Keep as listed, no lock upâ. This Gnosis multisig received 14MM $LDO from a wallet just a day ago, which withdrew 12MM $LDO from Binance two days ago.
Terms for Dragonfly seem reasonable- They want to top up 1% of supply, they get to do it at market price without the large slippage it would entail to buy that much, they have reputational value to protect by not dumping, LIDO gets a fair price for itsâ treasury.
New terms needed for the other 1%- For smaller buyers (like potentially my fund Selini), slippage compared to market buy is almost negligible. We can execute at market for up to say $1mn without any issue. Also not all smaller buyers will have as much reputational risk as Dragonfly for selling.
I think a 1 year lockup and 15% discount are more appropriate terms for adding smaller funds into this round. We personally wouldnât buy any locked up tokens at/above market as explained above it is strictly inferior option for those not buying 1% of supply like Dragonfly.
To address cobieâs point about VCs not adding any value etc. For the most part true (though I have maybe been one of the âsuckersâ that does get on many calls with founders to help)- but to understand the game Lido is in I would disagree with the assertion of no value add anyway-
Liquid staking is not an impossible tech to build, and obviously there are and can be more competitors. What âwinningâ means in this case is probably as Hasu has theorized, getting mindshare early and riding the benefit of economies of scale in liquidity. Thus having even 1-year locked up participants spanning different funds/thought leaders in the space has a hidden value-add that I would argue is competitively critical for maintaining Lidoâs current lead during this coming critical merge period.
Tldr; Simple mindshare value by active ecosystem participants is valuable, slippage is low for smaller buyers- if another 1% is sold it should be to visible participants who get a small discount to market and have a small lockup.
ladies and gentlemen, may i present sir jordi of House Alexander
are you can see on chain mr alexander, jump crypto the baddest mfâs in the space do not really care about reputation etc. this is economic warfare. they have already dumped 1 mm LDO tokens at the paltry prices. u must hope for the best and prepare for the worst.
we got ourselves in this mess b/c we as an unorganized dao failed to secure the bag as dj khaled would say. instead we have become an onchain hedge fund and effectively went Long on ether at 4,000 usd per coin, su zhu style.
question to @jbeezy is it possible to sell any eth to cover LDO DAO operating expenses until Q2 2023?
fwiw @gametheorizing was one of the ppl sounding alarms about the unsustainability of ohm, but that is beside the point
the terms for dragonfly do seem reasonable given the size & what their execution would look like market-buying. i appreciate there may be some soft value to the idea dragonfly has reputational value to protect, but i wouldnât rely on that & think a 1yr lock is reasonable. the below reasoning for why a no-lockup structure doesnât work is weak imo
b. The entity weâre using to purchase LDO tokens from the DAO has liquidity restrictions. This means itâs difficult for us to invest in illiquid token deals, hence the no-lockup structure of this deal.
i would also highlight that as is typical in governance proposals/discussions, itâs easy to lose sight of the primary goal (i.e. perfect being the enemy of good) which @cobie summarized appropriately
Lido has plenty of LDO in treasury, and good revenues that should only get better post-merge. All it needs to do is make sure that it is in a healthy position to comfortably keep operating for a few years in case of extended market turbulence. No need to take big risks here for a bit extra money.
i get an odd feeling this is jordiâs alt. but whatever.
i agree with you on the lock, and that the reasoning from dragon is weak.
and i agree on the end goal. but with:
no lock
the ftx perps (magically!) coming about when this deal was structured in private
dragon liquid (hedgefund) doing the deal
everything points to this deal being a short term trade they are able to take advantage of bc of their size, sadly. Its not in anyones best interest besides dragon.
