During the height of Solana, Parrot Finance raised almost $80 million through a public token sale.A vote is being held by the protocol to buy out its investors two years after it first attempted to disrupt the crypto lending sector.According to the latest proposal, Parrot’s so-called governance token will be abolished through a redemption scheme in which $50 million from its treasury, valued at $0.0045 per PRT owner, will be distributed to PRT owners.With such a price, Parrot’s plan to create a potent stablecoin and loan markets for the Solana blockchain would be completely destroyed.Despite the fact that Parrot’s Treasury kept $73 million, or only 12% of what they invested, IDO investors still stand to recover a tenth of their money.
However, investors upset by the idea claim that Parrot’s team, which never made good on its pledge to give PRT owners control over the protocol and has been accused of being missing from the protocol’s driving seat, might walk away with tens of millions of dollars.The circumstance demonstrates the disadvantages of funding crypto systems through unrestricted token offers at a time when the U.S. Securities and Exchange Commission is taking a more aggressive stance.Instead of the protocol that Parrot’s proponents promised, the community is being urged to leave with pennies on the dollar.
Two years after its launch, Parrot’s plans haven’t materialized.Its token is far below the sale price, and its total value locked (TVL) putting it in the lower tier of Solana DeFi.Parrot’s TVL has stalled out while other protocols have rallied with user incentive systems and liquid staking token integrations.At the height of the Solana DeFi bull run in 2021, Parrot.fi raised $84.7 million by selling 10% of all PRT tokens to the general public in September and October of that year.According to Cryptorank, those tokens have since lost at least 88% of their value.The project’s treasury is still in the tens of millions of dollars.
Investor estimates state that Parrot’s redemption plan would return around $50 million of its nearly $73 million treasury to PRT investors.The remaining $21 million would remain with insiders: $6.3 million for the project’s “runway” over seven years, $8.3 million in LP tokens that are difficult to sell, and up to $10 million in questionable private investments made by the team.The investors who pushed for a repurchase are annoyed by those numbers.But since there are no participation restrictions under Parrot’s redemption scheme, insiders could potentially withdraw money from the redeemable treasury.
Investors claim that in November, when the Parrot team unilaterally unlocked a sizable tranche of unvested team and venture capital tokens two years ahead of schedule, the odds were even more in their favor.As a result of this action, insiders now have significant influence over Parrot’s redemption vote and, in the opinion of investors, a higher effective redemption price.