Title Of Proposal Joining ADEL and AKRO as a win-win for everyone
Author(s) Names The Liquidator
- It has been decided that there will be a token swap offer for switching ADEL to AKRO (https://medium.com/akropolis/akropolis-ama-recap-df556c6a94e7)
- Option as described above: team funds will be used to pay for the swap (conversion rate still unknown)
- Option 2, suggested in detail below: the total circulating market value of ADEL is quite small (pre-price drop about 2 million USD plus vested tokens, let’s be generous here and say that will end up at 3 million USD), this would be about 350 Million AKRO or about 8.75% of the current total AKRO supply of 4 billion tokens.
Potential problems with the currently proposed token swap
It has been decided that there will be a token swap offer for switching ADEL to AKRO (details here: https://medium.com/akropolis/akropolis-ama-recap-df556c6a94e7).
So now both tokens need to be joint in a fair way and both are interested in a bright future of Akropolis:
Some have mainly supported the project via the AKRO token, others liked the idea of supporting the yield aggregation side of Akropolis and wanted to take part in community governance (ADEL).
We currently have people in both camps (of course there are also many in between) and now we need to join them, also in a financially fair way.
Financing a non-mandatory swap via team funds has 3 problems:
the team has to pay for it and the available funds on their end may not be enough to compensate 100% of the ADEL holders ($ value wise)
you still end up having 2 coins on coingecko/coinmarketcap which will cause confusion with new investors.
while a potential dilution of current AKRO holders sounds intimidating, if you add back the circulating dollar value of ADEL to AKRO, you will get away with a situation where the team does not need to pay as many funds and the ADEL holders are still pleased, while the AKRO holders potential dilution is close to zero.
Potential solution to make everyone happy
The only reason why the team has come up with the solution of offering a token swap and paying it with their own funds is the worry that if you would create new AKRO tokens for the swap, you would virtually “dilute” current AKRO holders:
If you perform the calculation you will see that this is not quite correct, since it is only true if you do not add the current circulatung value of ADEL to the AKRO token.
You could take the total market value of ADEL (pre-price drop about 2 million USD plus vested tokens, let’s be generous here and say that will end up at 3 million USD, which would be 350 Million AKRO). This would not even be 9% of the Fully Diluted Valuation of AKRO (which is at 34 Million USD right now).
You could say you dislike a “dilution”, even if it is in the area of below than 9%, I get that, but in return you could make the token swap from ADEL to AKRO mandatory.
I think that nearly everyone will swap ADEL for AKRO if ADEL only has a value in Delphi V1, so the total swap amount will be the same as if the swap was mandatory.
You would then “add” the current circulating value of ADEL back to the AKRO holders, so your “dilution” will end up being much less or even zero.
In return, ADEL would completely be delisted, which would also add the benefit of having no confusion that there are still 2 tokens out there, especially for new investors.
The team would not have to pay as much from their team funds, so that money would potentially available for future development investments, which will benefit everyone that is involved.
The majority of AKRO holders and the team should have ADEL tokens as well. So nearly everyone would benefit if we find a fair solution of joining ADEL and AKRO together
The proposed suggestion also avoids the whole scenario of “ADEL was a gov token for Delphi V1 only and now you need the AKRO token for Delphi V2 (names not yet fixed)”
We would simply join the tokens, accept an overall increase of AKRO tokens < 9% but the total value of both tokens gets joined as well. Dollar-wise, everyone should stay about the same and only a single token remains.
Funny enough, in the KuCoin hack which took part September 2020, 283 million AKRO tokens were taken from the hacker and are now frozen in this account: https://etherscan.io/address/0xeb31973e0febf3e3d7058234a5ebbae1ab4b8c23
So these tokens were completely taken out of the overall AKRO supply and were never replaced. From that perspective, if 350 million new AKRO tokens are generated to integrate ADEL and AKRO together, you could make the following calculation for 2020:
- 283 million AKRO effectively burnt
- 350 new AKRO tokens generated, resulting in only 67 million new AKRO tokens overall, which is a dilution of only 1.6% (and then you would still get the benefit of the circulating value of ADEL)
An alternative would be to only re-generate the 283 million AKRO from the KuCoin hack and use them for the token implementation of ADEL and AKRO, while the team would provide the additional 67 million AKRO tokens from their funds, but this would lead to an odd total number of tokens in the calculation of coingecko/coinmarketcap.
This suggestion should be a win-win for everyone, be it mainly AKRO or ADEL holder, both and the Akropolis team as well.
Thank you for considering