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brianwalden
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3 minutes ago, brianwalden said:

After all that excitement, there's nothing going on anymore.

@Pablo gave possibly the most practical advice someone could.  At that point, there was nothing else to discuss. Hugo promised to look into Quadratic Voting. Reproducing his advice here for those who haven't seen it on the Proposal channel -

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Pablo, [Jun 21, 2021 at 6:02:42 AM]:

My thoughts on the distribution issues - in short, I don't care about the specific numbers or time period as that matter was settled last year. I'm more concerned about process:

1. Distribution was determined months ago. There was plenty of opportunity for people to assess their tax exposure before even committing to the airdrop. There was ample opportunity to back out of the airdrop. Many people invested in XRP based on a known distribution model and tokenomics.

2. It's dangerous to start mucking around with distribution in the weeks before launch. Even if I agree with Arturo on some of his analysis, the time to question the tokenomics and distribution was last year, before the snapshot. The only correct response by Flare to the current commentary (including mine!) should be: "thanks for your input - we appreciate the feedback". Excuse my cricket analogy here, but we need more straight batting on this one. Leave the reverse sweeps, overhead shots and fine cuts when you get your ton. 😉

3. I've participated in airdrops on other platforms and I'm also providing legal advice to DeFi projects and platforms regarding airdrops, adoption and a range of other legal matters. There's one common refrain from my clients: there is no "perfect" solution to airdrops. There are always compromises between (picking just few axes of analysis) ensuring sufficient on-chain liquidity (and therefore accommodating whales), vampiring competing platforms, protecting retail investors and encouraging distribution/adoption/buzz. Flare got most of this right - don't mess around with it.

4. I was surprised to see that tax even ranks a mention. There are all sorts of legal and business issues around the airdrop that no one is discussing (but perhaps should). The public offering, securities law implications (which still exist for Flare) incoming FATF guidance, developer liability, governance etc. But tax? If we going to have the conversation about governance and tokenomics, the issues are much bigger than tax and price stability.

5. People should be careful with any tax advice for a distribution that will run for more than 2 tax cycles. We don't know exactly how the US or other OECD nations are going to treat crypto in terms of its legal status or tax impact so why make changes based on unknowables? I'm actually expecting the tax rules and legal status of XRP/crypto to change over the next 2-4 years anyway. I could be wrong but when I look at what the FATF and EU is doing, the writing is on the wall for significant regulatory change. We'd be wise to keep one eye on the medium term outlook rather than short-term price/tax issues.

6. Another theme that should have played a greater role here: if this is going to be a genuine, community driven platform, it seems unwise to pre-bake the proposals and voting metrics for such significant issues. That shocked me (and others) when I first saw the initial proposals. I think the better approach is to settle on agreed voting mechanisms and governance frameworks first, then float suggestions to the community, gauge the reaction, and finally take the feedback as input into actual worded proposals for a formal vote. It would have saved a lot of heartburn and lost hair.

7. One small specific suggestion regarding governance - consider quadratic voting if possible - it's the only way I've seen to give retail investors a stake in the governance process. There are already problems for most platforms driving voter engagement (just like real life) but quadratic voting does move the dial back towards retail investors and should be considered.

8. I'll say it again: ignore price volatility in these deliberations. We need to think about these platforms as going concerns with market share, revenue and profitability playing important roles. You might have the most amazing price for your token but if no one is using the platform, you're dead meat. Once we shift focus back to those drivers of business success, some of the recent commentary starts to take on a different flavour and not one I think is conducive to success for Flare.

 

 

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