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The Great Flare Voting F**k Up


Seoulite
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10 minutes ago, Seoulite said:

See the end of this thread, the decision has been reversed, time to be optimistic again!

Not holding my breathe, you from Korea right? I'm from there, i rather eat kimchi than expecting flare to achieve something. 

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10 minutes ago, Parabolic said:

Not holding my breathe, you from Korea right? I'm from there, i rather eat kimchi than expecting flare to achieve something. 

I’m not Korean I just live in Korea. 

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1 hour ago, Seoulite said:

I’m not Korean I just live in Korea. 

You sound like a man with your head screwed on straight who knows what identity is. Here, you'd be burned at the stake for denying the sacred dogma that America's magic soil turns everyone who sets foot on it into Yankee Doodle.

But I digress. The good thing about the free airdrop is you can use it to try Flare out while still eating the kimchi of pessimism.

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6 hours ago, Seoulite said:

Thank God

 

I thought the original idea was terrible and the backflip doesn't fix the underlying issue.

I don't understand why Hugo is (A) deciding the solutions; (B) determining the voting thresholds; and (C) creating brain-fart tokenomics without consulting the community. Then backflipping without consultation. None of this is good.

I get that Flare is his baby but he has plenty of role models to learn from and I don't see Andre Cronje or Hayden Adams or Shachar Bialick at Curve behaving this way. You need to get the community to back you for these big decisions - he's doing the complete opposite and the results speak for themselves.

Let's hope it's a "teachable moment" for Hugo - he needs to engage much better with the community (and I don't mean holding AMAs). He'll discover quickly that the community (and not Hugo) is the main driver of value for Flare. The community creates the network effects, not Flare's fancy math. I don't see that in him yet and it's something he'll need to develop fast.

13 hours ago, brianwalden said:

We haven't even gotten to the elephant in the room. The tax status of F-assets.

Super Bowl 51 Elephant GIF

That's a very good one to pick up. I wonder if their tax "experts" even turned their mind to that issue. I'm betting not. Here's another one they probably didn't pick up - the liquidity provider (LP) tokens that are minted when you stake liquidity pairs. ;)

I'm seeing some other big elephants in the room:

1. FATF guidance that will likely be rolled out in the middle of the extended airdrop process. Luckily, that's a problem that will affect every DeFi platform. The aim of the guidance is to introduce mandatory KYC and AML measures for DEXs and DApps. Should be fun to watch the regulators enforce this.

2. The securities law status of LP tokens - the minting of such tokens isn't just a potential tax event, it creates on-chain rights to trading volume profits and token rewards used to incentivise the pool. Sheesh, I see us re-visiting Howey. Fortunately, this is another industry-wide problem.

3. Possible legal response from Ava Labs regarding Flare's use of the Avalanche Protocol. I always said more litigation was coming. This one will be easier to solve given it's mainly a licensing issue (if even that).

Edited by Pablo
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32 minutes ago, Pablo said:

I thought the original idea was terrible and the backflip doesn't fix the underlying issue.

I don't understand why Hugo is (A) deciding the solutions; (B) determining the voting thresholds; and (C) creating brain-fart tokenomics without consulting the community. Then backflipping without consultation. None of this is good.

I get that Flare is his baby but he has plenty of role models to learn from and I don't see Andre Cronje or Hayden Adams or Shachar Bialick at Curve behaving this way. You need to get the community to back you for these big decisions - he's doing the complete opposite and the results speak for themselves.

Let's hope it's a "teachable moment" for Hugo - he needs to engage much better with the community (and I don't mean holding AMAs). He'll discover quickly that the community (and not Hugo) is the main driver of value for Flare. The community creates the network effects, not Flare's fancy math. I don't see that in him yet and it's something he'll need to develop fast.

That's a very good one to pick up. I wonder if their tax "experts" even turned their mind to that issue. I'm betting not. Here's another one they probably didn't pick up - the liquidity provider (LP) tokens that are minted when you stake liquidity pairs. ;)

I'm seeing some other big elephants in the room:

1. FATF guidance that will likely be rolled out in the middle of the extended airdrop process. Luckily, that's a problem that will affect every DeFi platform. The aim of the guidance is to introduce mandatory KYC and AML measures for DEXs and DApps. Should be fun to watch the regulators enforce this.

2. The securities law status of LP tokens - the minting of such tokens isn't just a potential tax event, it creates on-chain rights to trading volume profits and token rewards used to incentivise the pool. Sheesh, I see us re-visiting Howey. Fortunately, this is another industry-wide problem.

3. Possible legal response from Ava Labs regarding Flare's use of the Avalanche Protocol. I always said more litigation was coming. This one will be easier to solve given it's mainly a licensing issue (if even that).

The LP tokens are Flare Finance's problem, not Flare's. Still an issue for us, though.

Who, exactly, does the KYC for a DEX? FinCEN made everyone who used the RippleTrade wallet go through KYC with Ripple (before later making Ripple shut it down), but that was because they made the wallet. If you used your own code, there was no way to make you undergo KYC.

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1 minute ago, brianwalden said:

The LP tokens are Flare Finance's problem, not Flare's. Still an issue for us, though.

Who, exactly, does the KYC for a DEX? FinCEN made everyone who used the RippleTrade wallet go through KYC with Ripple (before later making Ripple shut it down), but that was because they made the wallet. If you used your own code, there was no way to make you undergo KYC.

Products like Panther, or even Stripe with Stripe Identity.

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52 minutes ago, Pablo said:

1. FATF guidance that will likely be rolled out in the middle of the extended airdrop process. Luckily, that's a problem that will affect every DeFi platform. The aim of the guidance is to introduce mandatory KYC and AML measures for DEXs and DApps. Should be fun to watch the regulators enforce this.

2. The securities law status of LP tokens - the minting of such tokens isn't just a potential tax event, it creates on-chain rights to trading volume profits and token rewards used to incentivise the pool. Sheesh, I see us re-visiting Howey. Fortunately, this is another industry-wide problem.

3. Possible legal response from Ava Labs regarding Flare's use of the Avalanche Protocol. I always said more litigation was coming. This one will be easier to solve given it's mainly a licensing issue (if even that).

2 is the big deal, I think.  Having a vote by users to issue themselves a user token is the main thing - the rest is quibbling over %'s and timing.  As the vote is still happening, I think I'm cool with it, however it plays out;  the vote qua vote counts.

I'd counsel, meta, the exact opposite on "listening to the crypto community" - I read news at least one tangent out to get more "crypto" news than anyone in "crypto" seems to be able/willing to deliver.  Everyone reads to me like they're CNBC - with some rare exceptions - and if I listened to or tried to keep up with that, honestly, I'd be dragged down/need therapy.

"Community" in crypto is not exactly refined culture - it's... it's the BTC Miami meetup - with a bunch of vain narcissists in one place, with one religion, but many sects - and they meet up and find that not everyone who is greedy is exactly so in the way that they, personally, are...  So... giggles from me - and back to reading non-crypto news and piecing a mosaic...

90 something percent of the people bitching about this think it's 90 percent about taxes in the US - and it is, to a slight extent, but not really - and I can't take anyone who thinks so seriously.  It's about robust, defensible design.

That's what I see, anyway.  Everyone else is free to disagree and, my, do they avail themselves of that freedom... :)

*shrugs*

Edited by NightJanitor
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28 minutes ago, brianwalden said:

Who, exactly, does the KYC for a DEX?

That remains to be seen. But the obvious challenge for any country that respects the FATF guidance (which I was surprised to see includes many tax havens) is whether you would permit a DeFi platform register in their country if it couldn't comply with KYC. Lots of these platforms are registered businesses. So they will need to yield.

I could easily see a scenario where DEXs need to build wallet whitelists so on/off ramping is only permitted through a KYC/AML exchange or KYC-as-a-Service provider.

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5 minutes ago, Pablo said:

That remains to be seen. But the obvious challenge for any country that respects the FATF guidance (which I was surprised to see includes many tax havens) is whether you would permit a DeFi platform register in their country if it couldn't comply with KYC. Lots of these platforms are registered businesses. So they will need to yield.

I could easily see a scenario where DEXs need to build wallet whitelists so on/off ramping is only permitted through a KYC/AML exchange or KYC-as-a-Service provider.

It’s a wonderful business opportunity.

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The negativity of some in this thread is mind boggling. 

You don't like what Flare is doing or people changing their mind? Setup your own crypto system and stop whining. 

Btw please send me your Spark tokens when they are released. 

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Definitely should not be discussing LP tokens in this thread.  Completely off topic.  This is about Flare NOT Flare Finance.

These matters are all complex enough without making it worse by conflating different entities.

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This discussion of tax always seems to assume a lot of things, principally that a lot of people are going to be strongly affected by it in same away Americans might be. The convo between Hugo and DS on twitter shows this too. DS says the current situation will produce sell-pressure. I don't think that's obvious at all. These are the people we are talking about:

All the FLR airdrop receivers

minus the people not affected by potentially damaging tax liabilities as Americans are

minus the people who were going to sell immediately anyway regardless of distribution / price / taxes

minus the people who would sell if the price was high enough regardless of taxes

minus the people who were affected by tax rules but didn't know about it

minus the people who were affected by tax rules, knew but didn't care about it

minus the people who never intended to pay taxes anyway

minus the people who never intended to sell, regardless of distribution / price / taxes

minus the big money, who as Brian says are not afraid of taxes and have likely been navigating crypto taxes for a number of years already.

I mean, how many people are really left at this point? Even if we assumed that 50% of airdrop receivers were Americans (a big number) this still wouldn't leave a large proportion of FLR being dumped because of 'muh tax liability'.

 

 

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The more I think about this, I think @Ripley nailed why this happened. I think I had heard that Flare made supporting exchanges sign agreements to ensure they would deliver the airdrop to their customers. But agreements work both ways.

I think Flare just wanted to go do option 1. I think most people would have been fine with it, but the exchanges balked at it. They had signed an agreement that the airdrop would happen one way and didn't want to change it, especially in a way that required more work on their part.

So Flare came up with this idea to get to option 1 through governance and threw in the option to burn the remaining 85% to make it seem like all sides had something to vote for.

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