Parrot Finance Starting PRT Token Buyback Next Week

We are talking about my favorite subject to love and to hate uh specifically activist investors and their efforts to police or uh pirates do that. They say aren't doing a good job. In this case, it was uh parrot, finance, a stable coin and lending market on the Salana Blockchain. This is one of those projects that back in salons heyday raised maybe $90 million in uh basically in I ce which it sold tokens to investors. Well, the project two years in hasn't really done anything. Its developers aren't really getting much done. They're getting big paychecks and that's caused a lot of people to be angry at them and cause a lot of hate from uh activist investors who pushed for and successfully uh who successfully pushed for the protocol to return its treasury to token holders through a buyback program. Now, the big takeaway from this uh I think that's most important to know is just the breakdown of the money. So in this case, there was, there's about $70 billion and a lot of it is gonna go to retail investors, but a lot more of it is gonna go to the, the team itself, which is going to retain a part of the treasury and also have $7 million for a continuous payroll for the next seven years. So this is causing a lot of people to say, well, what's going on here? Who's ruing, whom are the activist investors ruing retail is the, is any, is the team ruing everyone? One thing that's clear is if you invested in this ID O back in 2021 you've gotten washed. So, uh I think I'll start out with you, Jen. Have you ever put, uh let's say $500 in some IC O and just really regretted it a couple of years. Yeah, totally. I have so I can uh empathize. But I mean, if you want to experience some drama, just head over to discord and, and see what the the dow members are talking about, Danny. I love following your stories because that has become your beat lately. And it is so interesting to see what's going on as all of these communities try um and experiment with decentralization. I think that the conversation and what's happened here. And when I read the story is so similar to conversations I've heard go on at other. Do people buy into this idea and to this concept? And then nothing really happens, that idea and that concept doesn't come to fruition, the community loses faith in the team and then there's no recourse to be had. Um I would love David before we get your thoughts, Danny, if you can just explain to me a little bit more about what happened here because it sounds like the proposal um went to the community, the community voted, but there was this rehearsal vote that caused a little bit of contention. And so does it seem like everything was above board? Is there some, it sounds like there's some blurred lines here. Well, any time you're having votes denominated by the size of your bags, things are gonna get wonky real fast. In this case, it does appear that the wallets that are associated with the final vote did hold. What looks like a practice vote where they created something on realms, which is the uh the governance platform where people can cast votes for Solana based projects um and simulated uh simulated a vote. Now it's hard to say that that just simulating a vote is a sign of fraudulence, but it is a little fishy. And it also speaks to another really central issue in the story of Parrot finance, which is that the this protocol sold about $85 million of tokens to investors in 2021 as a governance token that would give them power over the protocol. And so the first and only vote that people have had, had the opportunity to use their tokens in is this vote to liquidate the, the the Treasury and to do this redemption and to do this buyback. So there's a good reason why they had to do a test round, I guess because they never actually experimented with crypto governance before. So just right there, you know, that's a big red flag uh that it really, it just you have to remind yourself that when you're investing in these types of protocols and these ideas, there aren't really any regulations that will hold these types of actors to account whether or not you think a Cryptocurrency is a security. I think it's safe to say that investing in an IC O with an expectation, you know, that's a hard bill to swallow when there's a few regulations to keep you safe, safe. But do you think David, so I would um I guess, sort of try and first separate uh two things here. One is the, the actual activist intervention to liquidate. Um And the other is the specific breakdown of the money. So, I mean, the fact that the developers gave themselves 7 million for continuing operations in what I think sounds like it's being pitched as an unwind. Um is a little weird. So, but if you go into um you know, just regular capital markets, this sort of thing is not uncommon. Activist investors will come in and take apart something that is worth more than some of its parts and sell them off. Um And that's kind of part of the capitalist process of creative destruction. Um And so if you're on the losing end of this liquidation. Uh Frankly, in, in my view, big picture, you don't have much to complain about because this is a project that wasn't succeeding. Um And you know, if there's a treasury there, that is worth more than the continued efforts of the developers, then it actually makes all the sense in the world to break that up and redistribute it. Uh if there's a lack of faith in the team, uh to, to quote the Great Marlo Stanfield from the wire, uh if you're complaining about this, you wish it was one way but it's the other. Uh I mean, this is just kind of on some level how, how it can work. Um That's separate however, from the question of was the vote honest and, and did the uh developers somehow engage in self dealing here to leave themselves with, with a bag? Um And, and so I, I do think we can make that separation. Um But on the other hand, that is also kind of the risk that you're dealing with is you don't even necessarily know in some of these cases, uh what wallets the developers control. Um And, and you can't in some sense. Um So, so I think that speaks to Danny's point about not just like this is a risky investment, but there are specific risks that are unique to the way these systems are set up that you need to be aware of and you need to know that nobody is going to come and save you. I think most of all.