Distribution chaos (again)

[Seoulite]

In the interview with Bearable Bull, Hugo talked about a governance proposal that would mean the remaining 85% of the distribution is not done through exchanges, and is instead done by delegating individually to the FTSO. This is to help people not to rely on exchanges that may disappear over the distribution period.

The proposal hasn't been published yet so we don't know the exact details, but it sounds like the idea is that people will get their first 15% and then after that they would need to delegate to the FTSO at certain periods to get the 3% or so a month from then on. 

Naturally this has people wondering how that would possibly work. Exchanges would need to provide flare with info on all the internal addresses they are using to distribute. Not only that, there is the problem of Bitrue IOUs.

Bitrue allowed people to sell their 15% as IOUs, on the idea that they would still be receiving the 3% per month through bitrue after. Some of us bought those IOUs because we wanted more FLR.

However, doesn't this now mean that those people who've sold their 15% have ALSO forfeited the other 85%? Since they don't *own* any tokens now, how can they delegate them in the future? Bitrue would have to use their initial address from the first snapshot and then distribute to the empty address, but this is back to square one. Relying on exchanges. 

Also who gets the remaining 85%? Presumably it will go into a massive pool that is now being distributed according to new balances (not the balances used at the snapshot). 

The only way this works if you want to cut out the exchange distribution step, is to make everyone delegate manually through a private wallet. This screws the people who sold the IOUs. I suspect this is why we are seeing the Bitrue IOU price jump. 

It makes me a little nervous because I now don't know what the FLR IOU represents. That uncertainty is always poison for prices. 

I don't know, it sounds like a clusterf**k. There are a number of exchanges who have been selling IOUs. I suppose if they are the only problem then it could be sorted out, but there has been over a year of trading with those IOUs and people will be pissed if the terms have changed. 

We need to see the proposal, and it will take a good few months for it to be sorted out, but if what people are saying is accurate then sticking with the exchange distribution seems simpler, as the 'solution' seems to create more issues than it solves. 

[Seoulite]

 

[RobertHarpool]

Just no. 

[Zerponaut]

Would that mean we'll need to have our entire distribution delegated at all times to receive the next 3-4% drop? It would appear that if it was just sitting in a wallet, not delegated to an FTSO then it wouldn't be counted.

In one way it rewards people for "supporting" FLR, which would be good but it goes against the initial premise which is a big problem, both for their credibility and, well, everything else.

[Guest]

2 hours ago, Seoulite said:

In the interview with Bearable Bull, Hugo talked about a governance proposal that would mean the remaining 85% of the distribution is not done through exchanges, and is instead done by delegating individually to the FTSO. This is to help people not to rely on exchanges that may disappear over the distribution period.

The proposal hasn't been published yet so we don't know the exact details, but it sounds like the idea is that people will get their first 15% and then after that they would need to delegate to the FTSO at certain periods to get the 3% or so a month from then on. 

Naturally this has people wondering how that would possibly work. Exchanges would need to provide flare with info on all the internal addresses they are using to distribute. Not only that, there is the problem of Bitrue IOUs.

Bitrue allowed people to sell their 15% as IOUs, on the idea that they would still be receiving the 3% per month through bitrue after. Some of us bought those IOUs because we wanted more FLR.

However, doesn't this now mean that those people who've sold their 15% have ALSO forfeited the other 85%? Since they don't *own* any tokens now, how can they delegate them in the future? Bitrue would have to use their initial address from the first snapshot and then distribute to the empty address, but this is back to square one. Relying on exchanges. 

Also who gets the remaining 85%? Presumably it will go into a massive pool that is now being distributed according to new balances (not the balances used at the snapshot). 

The only way this works if you want to cut out the exchange distribution step, is to make everyone delegate manually through a private wallet. This screws the people who sold the IOUs. I suspect this is why we are seeing the Bitrue IOU price jump. 

It makes me a little nervous because I now don't know what the FLR IOU represents. That uncertainty is always poison for prices. 

I don't know, it sounds like a clusterf**k. There are a number of exchanges who have been selling IOUs. I suppose if they are the only problem then it could be sorted out, but there has been over a year of trading with those IOUs and people will be pissed if the terms have changed. 

We need to see the proposal, and it will take a good few months for it to be sorted out, but if what people are saying is accurate then sticking with the exchange distribution seems simpler, as the 'solution' seems to create more issues than it solves. 

I’m guessing that a bunch of exchanges that originally agreed to the proposed distribution either went under or are under water with the DeFi crash that they no longer can be relied to provide engineering support for the 3 year long distribution. Complex distribution mechanics cause complex problems and require complex solutions. Its a bit of a self afflicted injury.

I’m sure someone will want a proposal to just have the 15% distribution be the 100% but that still doesn’t help the IOU folks who sold their 15%. 

And that brings me to what I think will ultimately happen. Flare cannot he held responsible for how Bitrue and its customers held their business with IOUs. Those who sold probably heavily benefited from high value IOUs which have since fallen by quite a bit, while the rest either held on or had no way of benefiting until MainNet was launched. So, I don’t expect that to be a factor in anyway in terms of the pros and cons of the proposals. Flare has also been very consistent (almost on a daily basis on their telegram) that they cannot be responsible for the IOUs for a network that isn’t even live yet.

Personally I like this proposal because it gives the network 3 years to build its liquidity and it gives users flexibility in how they want to receive the distribution in a tax beneficial way. But I’m probably biased because I self-custodied.

[LeGonze]

2 hours ago, Seoulite said:

However, doesn't this now mean that those people who've sold their 15% have ALSO forfeited the other 85%? Since they don't *own* any tokens now, how can they delegate them in the future? Bitrue would have to use their initial address from the first snapshot and then distribute to the empty address, but this is back to square one. Relying on exchanges. 

Also who gets the remaining 85%? Presumably it will go into a massive pool that is now being distributed according to new balances (not the balances used at the snapshot). 

I'm one of the IOU's sellers on Bitrue... And yes, that proposal looks like shit to me...

I mean, I got 15% of something, I saw a good price for it and decided to sell ONLY cause I knew I still had 85% remaining... This would be absolutely unfair to us...

 

2 hours ago, Seoulite said:

I don't know, it sounds like a clusterf**k. There are a number of exchanges who have been selling IOUs. I suppose if they are the only problem then it could be sorted out, but there has been over a year of trading with those IOUs and people will be pissed if the terms have changed. 

We need to see the proposal, and it will take a good few months for it to be sorted out, but if what people are saying is accurate then sticking with the exchange distribution seems simpler, as the 'solution' seems to create more issues than it solves. 

Exactly...

 

11 minutes ago, Ripley said:

And that brings me to what I think will ultimately happen. Flare cannot he held responsible for how Bitrue and its customers held their business with IOUs. Those who sold probably heavily benefited from high value IOUs which have since fallen by quite a bit, while the rest either held on or had no way of benefiting until MainNet was launched. So, I don’t expect that to be a factor in anyway in terms of the pros and cons of the proposals. Flare has also been very consistent (almost on a daily basis on their telegram) that they cannot be responsible for the IOUs for a network that isn’t even live yet.

Well, the exchanges cannot be responsible for the everlasting delays the Flare team has been giving us... Flare have been setting dates but never deliver... Fulck this proposal, they can't change their decision of distributing through exchanges... That's absolutely unfair... I left my XRP on bitrue only cause Flare said Bitrue was going to be taking the snapshot and distributing the token. IF they would've said to us to just hold the coins on our own wallet (Ledger, etc), I would've done that.

[Seoulite]

1 hour ago, Zerponaut said:

Would that mean we'll need to have our entire distribution delegated at all times to receive the next 3-4% drop? It would appear that if it was just sitting in a wallet, not delegated to an FTSO then it wouldn't be counted.

In one way it rewards people for "supporting" FLR, which would be good but it goes against the initial premise which is a big problem, both for their credibility and, well, everything else.

Sounds like they might have a more limited time period to delegate for that. So no not all the time.

[Zerponaut]

Could Flare look into some kind of "note" from the exchanges for individuals who sold their IOUs that would somehow translate their 15% 'entitlement' but not the value to their personal wallet?

It would be up to exchanges to participate but if they refused they would be blackballed by users.

[Seoulite]

52 minutes ago, Zerponaut said:

Could Flare look into some kind of "note" from the exchanges for individuals who sold their IOUs that would somehow translate their 15% 'entitlement' but not the value to their personal wallet?

It would be up to exchanges to participate but if they refused they would be blackballed by users.

that's a good idea actually. like a non-transferable NFT or something

[Zerponaut]

1 minute ago, Seoulite said:

that's a good idea actually. like a non-transferable NFT or something

Yes, exactly, some kind of NFT approach is surely possible and it would be a great technology demonstration.

[Zerponaut]

IMO it's actually a strange one. If people were to miss out on their allocation, although it looks REALLY bad for Flare for "breaking" their 15% / 3-4% ... "guarantee" it's not actually their fault because the exchanges made their own independent plans and Flare wasn't involved and didn't "guarantee" anything under those modifiers (FLR IOU's are totally the exchanges responsibility to swap for FLR), however it does highlight an unfortunate weakness in their seemingly invulnerable system if they can't adapt to circumstances.

But if they ended up giving people more than their allocation as a result of the governance vote it is Flare's problem and I think a massive one because before the network is even functional they are breaking their own "guarantee" to distribute 1:1 and that demonstrates a weakness in their model, processes and ability, and sets them up to be seen as untrustworthy.

Even in the rapidly expanding pantheon of Defi failures it would sit on its own plinth.

To be honest, they really should find a way to keep the original allocation plan because this just adds a layer of uncertainty to an otherwise potentially groundbreaking network.

[BillyOckham]

18 minutes ago, Zerponaut said:

To be honest, they really should find a way to keep the original allocation plan because this just adds a layer of uncertainty to an otherwise potentially groundbreaking network.

I agree.  And as you’ve indicated,  it should be possible.  I hope they do it although it doesn’t affect me.

Sometimes it’s hard to know what the “right” thing to do is but this seems a clear case of a avoiding an injustice if possible.

 

[Skippy]

I don't understand what the fuzz is about. Anyone who sold their FLR can just buy it back if they want to participate, delegate and earn more FLR. 

Anyone can buy the initial 15% from the open market if they want to participate and earn more.

It will work just like any asset with quite high inflation, am I not correct? 

[Kiwi]

I like the proposal.

If you want to participate in the network, you will be rewarded. 

You want to dump and be airdrop hunter? Sure, you wont get anything after that. 

For people stuck with their tokens on exchanges/brokers. They can withdraw their tokens to a non-custodial wallet, delegate votes, and voila, they shape their own future.

Brilliant idea. 

[Seoulite]

4 hours ago, Skippy said:

I don't understand what the fuzz is about. Anyone who sold their FLR can just buy it back if they want to participate, delegate and earn more FLR. 

Anyone can buy the initial 15% from the open market if they want to participate and earn more.

It will work just like any asset with quite high inflation, am I not correct? 

I think the people who sold are pissed because they did it thinking the plan was different. I think more generally people are just seeing flare changing plans again and are sick of it. But once the network launches a lot of that frustration will be gone. Still feel bad for those who sold their IOUs though.