Goals:
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Get the victims made whole as quickly as possible.
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Do not interfere with DLP and the currently functioning markets on Radiant.
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Use market forces to recapitalize quicker in the event of success.
Munchausen’s proposal:
Step 1: Dollarize all debt. The exact specifics of how much is owed can be determined separately and isn’t relevant to this proposal.
Step 2: Victims of the hack receive dRDNT tokens equal to the amount at time of minting such that the value of these tokens would equal the hack shortfall if dRDNT were 1-1 equal with RDNT tokens.
The current FDV of RDNT is around 90M USD. If tokens inflated 100%, one would assume a 50% reduction in price. To make the math simple, let’s use a price of $0.03 and 1.66B dRDNT. dRDNT value would be ~50MM. RDNT’s short term price might fall as well to this $0.03 level.
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Revenue for a “Purchasing pool” is taken from the protocol. 20-50% of gross revenue. I prefer higher percentages, but the exact amount needs to be vetted by the team.
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dRDNT tokens are purchased by the purchasing pool at the stable price of $0.03 daily. When this happens, the dRDNT is burnet and an equivalent RDNT token is either held by the Radiant treasury or burnt. The purchasing pool does this no matter what the price of RDNT is.
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Devs create a function for any user to purchase dRDNT tokens at $0.03. If they do, the dRDNT is burnt and a RDNT token is given to the buyer.
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Purchased dRDNT tokens are burnt and the corresponding revenue from the purchase is given to the token holders pro rata. If you held 100k worth of dRDNT and the pool of dRDNT is worth 40MM, for each dollar of dRDNT purchased you’d receive $0.0025 for example.
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Only locked dRDNT tokens can be purchased by the purchasing pool and unlocked tokens have a secondary market. Secondary market can buy/sell unlocked dRDNT tokens at a discount.
This creates a short term RDNT ceiling price of $0.03. However, if the protocol is functioning well, and the price would go higher, arbitragers will buy dRDNT tokens and receive a real RDNT token which is worth more. This helps clear the victim fund quickly.
it is possible that the clearing price for RDNT after this proposal is higher than $0.03. This means that there will be an immediate flow of funds buying dRDNT as its a discount price to RDNT, giving the victim’s fund a nice jump start.
If the protocol wouldn’t exceed this price, the protocol itself is constantly purchasing tokens with its revenue. This is effectively a burn as the treasury would only hold the tokens. Notice in this scenario the tokens never hit the float and never put direct sell pressure on RDNT. If the protocol was the only buyer at $0.03, it means that the protocol will be the only holder of this excess float and the eventual value of RDNT should be higher than the original peg. If this happens, of course more buyers will come in.
In pessimistic scenarios, the protocol revenue would eventually buy back the dRDNT and the victims would be whole, but slowly over a 5-10 year span (heavily dependent on the success of the protocol). In an optimistic scenario the dRDNT would be purchased quickly (due to RDNT value > $0.03) and the victims fund would clear quickly.
This allows partners to do good will by purchasing dRDNT tokens and also get something for themselves (RDNT tokens). They may even want to do the community a solid and purchase tokens when the price is sub $0.03.
Pros:
If there is no marginal buyer at sub $0.03 RDNT than this becomes a debt token with similarities to 47b. However notice that if the dRDNT tokens were never to be bought by outside investors, it means that the float never changed and will never change. The dRDNT tokens simply get burnt or held by the treasury. In that instance, the value should be closer to where it is now, around $0.06.
Of course it can’t be true that the value is closer to $0.06 and nobody came to buy the dRDNT tokens, but notice in both scenarios this is good for Radiant and the victim’s fund.
We can’t know how much interest there is or when it will arrive, but all interest clears the victim’s fund whether it be from investors who want cheap RDNT tokens, partner protocols/philanthropy helping or the purchasing fund held by Radiant itself. Notice that any recovered fund go into the purchasing pool.
dRDNT value is capped at exactly 50MM which also helps Radiant’s long term exposure to be capped at this level. Some proposals keep in-kind redemption which can inflate the victim’s fund.
Contrast to 47b proposal. 47b proposal is slow with only 10% of revenue going to the victim’s fund. Additionally, there is no way the fund can be recapitalized quicker than the revenue allows. In this proposal the fund can clear quickly if there is optimism in the market about Radiant’s future.
Cons:
The short term price of RDNT will take a hit. If the price would clear above $0.03 it would clear the fund quickly (good) but now there would be a corresponding number of tokens introduced to the long-term float (bad for price).
Closing: Victims should be the number 1 priority both morally but also by instituting a fair plan, I believe this keeps Radiant’s reputation intact and gives investor’s more confidence in the long term success of Radiant.