Parrot Finance, a crypto lending protocol, is holding a vote to buy out its investors with a $50 million redemption program. This would be worth $0.0045 per PRT token, a tenth of the initial investment, despite the protocol’s treasury retaining $73 million. The proposal has caused outrage among investors, who were promised a protocol they would govern. Parrot’s promoters promised its community a protocol they would govern; instead, they’re being asked to leave with pennies on the dollar, said investors.
Two years after its roll out, Parrot’s plans haven’t panned out. Its total value locked (TVL) places it in the lower tier of Solana DeFi and its token is well below sale price. The situation highlights the downside of funding crypto protocols through unregulated token offerings at a time of heightened action by the U.S. Securities and Exchange Commission.
Parrot’s redemption plan would return about $50 million of Parrot’s nearly $73 million treasury to holders of PRT, according to investor estimates. The remaining $21 million would stay with insiders, including $6.3 million for seven years of project runway, $8.3 million in illiquid LP tokens and up to $10 million in private investments the team made under dubious circumstances.
At press time the vote was overwhelmingly in favor of conducting a buyback with 97% in favor. The vote is well below quorum; it is open for the next week. Some voters on ballot-casting website Realms blasted the early insider unlock for rendering the team majority token holders, making this vote meaningless and a total farce.