See no reason to harm PERP holders and compensate Alameda who was harvesting funding and knew they couldn’t leave unharmed. If we compensate them would be completely unfair.
2 Likes
It looks to me that the community is proposing many interesting options. In contrast, I see little support expressed for any of the 4 originally proposed options (@Long-run-view has expressed support for option #4 though in a somewhat modified form; myself I’ve expressed a slight preference for option #3, though not any strongly). I’d like to see all of the community proposed options going to the vote but, at the same time, I’m afraid of having a divided vote between too many similar options which will make them lose strength even though they’d have a majority support if merged (and I don’t think Snapshot supports something like the Borda count, does it?)
Therefore, I’d like to propose that we do a multiple vote, with the elements of the compensation plan voted independently. It could be something like this, or a variation of this:
-
Question 1, should small traders (margin+uPNL < $100k) be made whole from the clearinghouse funds first? (yes/no)
(if yes wins, small traders are already whole and thus removed from what follows) -
Question 2, should there be a full compensation from the protocol, this is, on top of what remains on the clearinghouse? (yes/no)
-
Sub-question 2.1, in case yes wins question 2, what form should take the compensation?:
i) fresh PERP minted and autctioned for USDC, or
ii) remaining USDC and some new PERP, staked in a one-year vesting pool -
Sub-question 2.2, in case no wins question 2, what should be the bail-in priority?
i) Simple cut, as proposed by @Ryan (leave out UHNWIs like Alameda or others)
ii) Proportional, prioritizing the less-leveraged positions / higher margin ratios. I think this is one of the iterating methods like the option 4 or Long’s proposed variation of it.
iii) Proportional, prioritizing by twapPositionNotional
Alameda wasn’t the only one who had a big position on the perp. I’ve been trading there for the whole year and a half since it opened and I’ve done nothing wrong. Why should I get less than the guys with smaller positions? it’s just not fair.
If the team and participants want to punish Alameda - let them not refund only those addresses that belong to Alameda, but not all holders of large positions.
3 Likes
What’s your position was? Let’s wait for csv and check who will be out. IMO large positions say 500k+ knew what they were doing. They earned good money doing funding, and now getting compensated above that is not right.
1 Like
There may be some nuance to be made between HNWI and UHNWI, though I’d prefer to avoid the bike-shedding this can bring. Besides, is it reasonable to think that people where putting six figures in this and not using any surveillance scripts or advanced metrics? It seems reckless if they didn’t (at least that’s what my rich frens do)
I think a ranked choice voting system would solve the problem of a divided vote between too many similar options.
See this video: What is Ranked Choice Voting? - YouTube
I believe crypto governance as a whole would benefit from ranked choice voting; hopefully it catches on.
Alameda has received over $36 billion in farming income.
Source: https://twitter.com/DefiMoon/status/1526783596572422146
Every single depositor in v1is a shrimp compared to Alameda.
Alameda also is getting almost half of the remaining funds in option 1.
The team has said that they will add any option that has community support. Overwhelmingly in this thread excluding Alameda has been supported.
So add option 1 to the vote, except exclude the 5 Alameda addresses:
0x0f4ee9631f4be0a63756515141281a3e2b293bbe
0x975d2dd35726e1f4e6af7e22880c49ffeda67339
0x88301e10b0ee2f7eb2c9dc9c8b98b813946d144e
0x3013ea1baafe595d6c54419a0d7e420de524c52b
0x5dac431f0479a1413c8734634c7d9de577675d40
The reason is simple: They can afford this loss much MUCH more easily than any other addresses in v1.
Edit:
Seeing that Option 2 is winning, I am losing sleep over this loss. A lot of sleep. I don’t think Alameda is. I don’t think the $1000 account average joe would lose much sleep over a $200 loss in the case of choosing option 4. Option 4 would save a lot of users like me from tremendous pain by essentially transferring funds from Alameda to medium size accounts.
7 Likes
Updated on 19th May 2:30 UTC
Please find data for each of the 4 team proposals at the link below:
https://docs.google.com/spreadsheets/d/15hajD9CatNgNMgjGq6QdvCw4dGqndFGG0V30vof2Smo/edit#gid=0
Notes:
- All amounts shown are expected refund under the respective proposal. Cells with - are dust positions.
- Amounts shown for options 1-3 assume price impact of a full close with no other trades occurring, using original v1 K values and index price at block 22169196, and assuming that your position was the first and only position to close.
- Option 4 models the actual functioning of an AMM system in a scenario where all traders gradually reduce their positions to zero.
- Data is not available for community proposals. Due to this, the vote will include a fifth option to fully evaluate and vote on community proposals in a separate vote, in favor of the four options presented by the team.
Vote is Live
The vote to decide the method in which remaining Perp v1 funds are to be shared among remaining users of the v1 exchange following the shutdown on May 15 is now live. Holders of PERP and staked PERP on Ethereum Mainnet and the Optimism Rollup are eligible to vote.
Option 4 is closest to actual system closing, as hana said:
Option 4 models the actual functioning of an AMM system in a scenario where all traders gradually reduce their positions to zero.
Option 4 is basically the “exclude Alameda” option.
It bankrupts multiple Alameda positions, while leaving everyone else with reasonable amounts.
For medium size accounts, anything other than option 4 creates a massive life & death difference (to borrow some wording from Discord).
As discussed in the last two days, option 4 treats low margin leverage accounts that have excess collateral much more fairly.
Alameda closely monitored their positions and has already withdrawn collateral, while other unsuspecting “large” retail accounts left all their collateral in v1, in some cases with less than 1.0x leverage. All options other than option 4 devastate those accounts for this reason.
4 Likes
Option 4 is the most fair, in my opinion. It is the only OI based option.
Note option 4 is the only option that doesn’t just use net margin. Instead it takes the users actual position into account.
This addresses concerns raised earlier in this thread. Other options haircut free collateral of users that have lots of collateral but a small position. Those users could have just withdrawn collateral without making a trade if they had any idea the v1 failure was coming, like Alameda knew.
The top 5 addresses in the following image are Alameda. Look how much more option 4 gives to almost all Perp retail users. Notice that option 1 rewards Alameda the most of all options.
This is partly because Alameda has already carefully kept as much collateral as they could out of v1 before failure occurred, while unsuspecting users didn’t try to withdraw their collateral, like Alameda did.
It is also because in v1 large positions take more exit risk than small ones. Alameda took this risk. Why should mid size accounts now pay for Alameda’s risk with a new set of rules introduced with Options 1-3?
Backup image link: https://i.imgur.com/mzvJkNb.png
Option 4, which models the actual closing of the system is the most fair.
4 Likes
Hana, it’s disappointing to see that despite you requested feedback on the options, I see none of that feedback incorporated in the final vote. No word on leaving Alameda out (“Alameda” as a placeholder for UHNWIs). No word on a compensation with PERP. Essentially, zero changes on the options as stated two days ago, except for the addition of a totally unspecific fifth option, which only divides the vote even further – four options are already too many.
If I was in your place, I’d seriously consider doing a subsequent vote to treat the question of the PERP compensation. Something like this: After the current vote, and on top of whatever option wins it, choose on what to do with the amounts left unfulfilled:
- Mint PERP to compensate everyone, including Alameda/UHNWI
- Same, but excluding Alameda
- Do not compensate
Do you think that would be acceptable?
2 Likes
We would like to include community suggestions directly in this vote, and during discussion within the core team, many people were in favor of that. However, there were two main problems that led us to use the current 5 options:
- Insufficient data for community proposals. If voters have to choose an option that will be the final option, they need to understand what that option will entail.
- The original 4 options have data and provide a broad spectrum of compensation options. Adding further options to this would split the vote, so we kept it to 5 to give the community options the best chance of seeing their day at the ballot box. I see your point about 4 options being too many, but it’s a dilemma between having too few options for some people, but too many options for others.
Regarding a second vote to use PERP to compensate, this is certainly possible – any proposal can be posted to this forum for consideration by the community.
1 Like
Can you please provide everyone with raw csv with margins, upnl, oracle prices? So we can do Robin Hood scenario over it.
Aslo please add Robin Hood solution (covering in full margin +upnl from below) as it was discussed a lot and a lot of people support it.
The way options are given now with 5th option leading to the other voting is intentionally manipulative.
1 Like
What I understood from your request for feedback was that you’d be adjusting, simplifying, or clarifying the options being offered. E.g., @Ryan’s proposal of a simple cut-off is something that could be combined with any other option, especially with option 1 (as it stands now, option 1 means Alameda get more than half of the cake, and nearly nobody sees that as a fair resolution), and options 2 and 3, while slightly different, could have been merged in one.
I decry that Option 5 is not adequately worded: It could mean literally anything, and it seems shorthand for “do nothing now and go back to the start”, which you know is not something that can get any support. Besides, it’s the team who have the necessary insight for proposing sufficiently elaborated options for vote, ideally after having listened and eventually incorporated feedback from the community. “Insufficient data” in our feedback was thus a feature, not a bug 
All in all, I very much welcome a second vote about additional PERP compensation.
Dear 0xb3611aA73BFbf7C0aE80c4102F05cBF6adaD713A I hope you understand that by voting option 2, you just voted to take life changing amounts of money from mid size unsophisticated Perp users and give it to Alameda, who do not experience the same level of exposure to this at all 
The amount gained by the really small users from option 2 compared to option 4 is not much. The amount that mid size users lose to alameda however is huge.
Please everyone look at the spreadsheet before you vote:
2 Likes
This Perp holder 0xb3611aA73BFbf7C0aE80c4102F05cBF6adaD713A is early investor.
Interesting to see his name . Will Perp disclose who it is?
Seeing that Option 2 is winning, I am losing sleep over this loss. A lot of sleep. I don’t think Alameda is. I don’t think the $1000 account average joe would lose much sleep over a $200 loss in the case of choosing option 4.
There are dozens of users like me, with extreme pain in Options 1-3.
In Options 1-3 users like me get 5-10% of our account back.
In Option 4 we get 50% of our account back.
In Option 4, the small size accounts still get 80% of their account back.
For this reason Option 4 is morally the best course of action. I beg PERP holders to consider the case of all these users who are devastated in Option 1-3.
Look at all of the users in the following image, and compare option 4 versus option 2 losses:
These are devastating losses in options 1,2,3 for medium size accounts. But they get half their money back in Option 4.
4 Likes
Well now it’s Option 4 that’s wining 
. To me, it is incomprehensible to make the plebs all pay so that the 6-7 -figure whales can get a bigger share of the cake.
I understand that Option 2 isn’t fair to those whales, but Option 4 isn’t fair to anyone! There are basically no fair options in a bail-in.
People with 6-to-7 figures at stake can afford to explore further compensation (special communication with the team, or maybe eventually a class action) in a way that’s not as easily available to the smaller players.
Option 4 maximizes the human damage and the PR damage for PERP. As PERP stakeholders, why should we shoot ourselves in the foot like that?
The team should announce that if Option 4 wins, that they will hold another vote to have PERP reimburse all accounts under $100k.
$10k-$100k accounts get 70% back.
<$10k accounts get 100% back.
The cost is relatively small to PERP and it calms hundreds of angry users.
6 Likes