To be clear, Option 2 users would get everything that they have been promised by the already concluded vote.
This proposal is about an additional reimbursement, to provide some extra reimbursement to users who would have received more in Option 4.
This proposal would only cost $2.5MM PERP.
In the words of Yenwen, the CEO of Perpetual Protocol:
Yes Option 4 is how the AMM supposes to work. The big account takes more hits because they have to take the slippage.
Option 1, 2, 3 suggests the liquidity is infinite, which is not correct on a AMM.
Opt 4 is a mechanism that closes the position from small to large 1% at a time. 0x000000ea89990a17ec07a35ac2bbb02214c50152 has more balanced portfolio so they have less slippage. Opt 4 didn’t exclude any wallets but just a mechanism that closing everyone’s position.
In Option 2, which has won the recent vote, about 30 mid size users take enormous losses. I can’t speak for everyone, but in my case, the losses are painful, and I have lost sleep every night for the last week. It may take me 2 years to recover my losses.
I was farming a ~7% expected yield, using about 0.9x leverage, and my position hadn’t been touched in months. I did not think of an unleveraged position on Perp v1 as something especially risky, though obviously I was wrong. I accept my part of the responsibility in taking this risk.
We could debate risk management. I am not here today to place blame on anyone for the failure. I only wish to propose that we Perp Protocol does what is both morally right, and what is also best for Perpetual Protocol in the long run.
So far Perpetual Protocol has had a very good record, earning the trust of its vibrant community. I think that this will change if there is a black mark of dozens of DeFi power users who have lost life-savings sized amounts of money to Perp, especially at the hands of a vote that included the option to return 50% of their funds.
This isn’t just about whether or not Perpetual Protocol is about v1 anymore, it is about:
- How the Perp team treats their users. Now and forever. If we believe the Opt 2 outcome alone is fair, will others in this space share your beliefs and join Perpetual Protocol?
- There are now 30 DeFi Power users who will shape part of Perp’s future by spreading the pain of their emotional and highly negative memory to other power users in the space.
- Doing morally what is right.
I propose to add additional reimbursement to Perp v1 victims on top of Option 2, to also provide the Option 4 results to anyone who received less in Option 4.
In other words, make payouts MAX(Option 2, Option 4).
The cost to provide additional reimbursement to the victims of Perp v1 failure would only be about $2.5MM in PERP.
Relative to the ~$90MM market cap of PERP at the time of writing this, I think this is a worthwhile PR investment. I also simply think it is the morally right thing to do.
It is so low cost because of the reasons already outlined by our CEO, Yenwen, who has already provided some level of endorsement of the Option 4 vAMM simulation, and so is defensable to investors and future Perp users.
Thank you for your consideration.