@joey I appreciate your leading the charge to improve the rage quit mechanics, but I still have major concerns with the rage quit mechanics. The first two are quite serious - and seem fatal.
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Using the pre-deal numbers incentivizes everyone to rage quit and amounts to a 51% attack by old TRIBE holders on new TRIBE holders
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Limiting rage quit eligibility further drives this dynamic
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Using pre-vote prices does not improve the game theory
Let’s unpack these one at a time. Then let’s determine the best path forward.
1. The rage quit mechanic is effectively enables a 51% attack by old TRIBE holders on new TRIBE holders who will be drained of their share of protocol equity
As currently proposed, the rage quit offers all pre-snapshot TRIBE holders the chance to cash for the pre-deal pro-rata share of the protocol equity. However, an additional ~350m TRIBE will be issued in the merger. This will immediately reduce the protocol equity per TRIBE by about 1/3. In addition, some holders of TRIBE will have purchased it after the eligibility date.
HENCE EVERY OLD TRIBE HOLDER SHOULD RAGE QUIT and buy back in.
Moreover, because the protocol will be paying rage quitters a 30+% premium to the current protocol equity per TRIBE, the protocol equity per remaining TRIBE will go down even more. This will create even more incentive for “old TRIBE” holders to rage quit, leaving even less protocol equity for “new TRIBE” holders, including the incoming holders of RGT.
Put differently, we are creating a 51% attack on the protocol in which old TRIBE holders transfer wealth to themselves from the PCV at a cost to new and future TRIBE holders – e.g., those who bought after the snapshot; those who currently only hold RGT.
Is this really what we want to do?
2. Limiting eligibility creates 51% attack-like incentives
The other problem with the current proposal is that it limits the rage quit option to a select group of TRIBE holders. This again creates a “51% attack” scenario where any “51%” of TRIBE holders has the incentive to set a criteria (like holding date) to take PCV from the smaller group of holders.
This will happen as long as not all TRIBE holders are eligible to rage quit.
Is this what we want to do?
3. Fixing the details doesn’t solve the bigger problem.
As described above, using pre-vote prices or changing other details of the rage quit will not change the incentives for some TRIBE holders to 51% attack the protocol and transfer wealth to themselves from the protocol at a cost to other TRIBE holders. To do that, we need to re-think the rage quit mechanic.
The Best Path Forward is to execute the merger and table the rage quit.
In light of these concerns, I suggest we remove the rage quit option until we can think through the implications more thoroughly. I believe it is especially important to table the rage quit now because we already have our hands full trying to perform the first DAO-to-DAO merger with RARI. Why risk derailing that to work thru the difficult issues here?
In addition, I don’t see any conceptual linkage between the rage quit and the merger except that we will be transferring protocol equity to ourselves at a cost to post-deal TRIBE holders. This does not seem like a way to quickly close the merger or win support from the Rari community or new holders of TRIBE.
CC @arcology