Reminting the 250MM Burned $ARMOR Tokens into $EASE Max Supply

Ideas
1

With the $EASE token launch, the team has been exploring the idea of reminting the 250MM Armor tokens that were previously burned from the max supply in November of 2021. This would put the $EASE token maximum supply back to 1 billion, these tokens would also be minted directly to the DAO. The reasoning we currently have is this

  • The token burn had minimal market impact.
  • Given this, minting those tokens could be beneficial to increasing the potential volume of funding capital and runway to ensure the longevity of the uninsurance ecosystem.
  • Minting directly into the DAO treasury would prevent any impact on circulating supply. And they could not be utilized without community consensus.

What are the communities thoughts on this matter?

2

I’m definitely down for this. We were in a different position at that point in time and it made sense, but I feel now increasing the treasury for longevity makes the most sense, and we have the opportunity to do it. As long as those tokens are in full community control I don’t feel it’ll have much of any negative effect.

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3

no need more tokens, again you have tendency to devalue token holders start thinking how to create value to investors not take away from them. business will succeed if investors, which are users too are happy

4

I am definitely for re-minting the supply of tokens, especially since these tokens are in full control of the community. These funding measures could really help with the longevity and sustainability of the project and quite honestly made little to no impact when they were burned under the ARMOR brand. Investors like me have to see the bigger picture in order to get the ROI we are looking for. 250MM tokens can go a long way with marketing, which IMHO, is one of the weakest areas that needs a healthy improvement for the value that long time investors are hoping for. Just my 3 pennies.

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5

I can see the logic of it. I also agree with Danny and Robert.

This move was for the most part executed out of desperation in search of a new hope in bad times that are now behind us. It didn’t have as practical an effect as we hoped it will have, other than providing emotional respite back then (and better optics in a deteriorating situation). Now this step will rather distort the future trajectory of our rebranded protocol than being of any use.

But!

I must say my reaction was initially negative. Midas has a point. The announcement also got some negative reactions on Discord, and we usually don’t get a ton of feedback these days when our community is mostly quiet. So this should be taken into account. Besides, Perky on Discord also has a point - a vote once given, later revoked, is not a pretty precedent to have (whether or not it leads to a serial behavior). As an investor with high hopes I do sympathize to these concerns.

I think this step should rather be amended, than reversed.

We have to consider what our community members have been through. Out of all the addresses that hold $ARMOR and $vARMOR, only several are actually keeping track of the latest developments, care to give feedback and share an opinion and participate on the socials, albeit quietly. That’s some hardcore support! It’s also an expression of faith in the toil and work the Team has been doing this whole time! We really owe our community our love :slightly_smiling_face:

My question is this:

  • Is it possible the long term investors and supporters to receive a bigger airdrop, basically alleviating the dilution effects (whatever magnitude they really have) of the 250MM reminting?

  • Can a subscription thing be organized, where any currently active community member (that acts in a given time-window) shares his/her wallet address, and be eligible to receive a unique airdrop if the address has been holding $ARMOR since way back?

Or some other idea in that spirit?

6

I have a better idea:

What if there’s a special airdrop for everyone who votes on this proposal, no matter the vote?

If the 250MM remint passes, then every address that voted (yay or nay) receives a special airdrop, aimed at alleviating the possible or actual dilution of its holdings.

It would stimulate voting activity and will support our die-hard community members. And, it’s possible it skews the voting process, so please edit this idea.

Is it possible to arrange?

7

Actually, I take my position back.

Since the 250MM was burned from the Treasury and not from the circulating supply, it had no real economical effect (as stated in the OP).

The reminting of that back to the Treasury where it was burned from should be viewed as a trivial matter in my opinion.

1 Like
8

As the tokens will be destined for treasury, under DAO control, there is no dilution, unless approved by the DAO. In that case the DAO will need to vote in favor of any usage (which in this case means adding to active circulating supply).

This will only happen if the DAO feels that the benefits (i.e. Marketing efforts, airdrop, increasing runway etc) are much more important than the drawbacks (increasing active supply).

I don’t specifically think that airdropping to voters is needed or beneficial at this moment. Instead, that could be one of the proposals if someone feels strongly about that.

9

To add to the discussion. Here is some feedback from our community member @Angurius#4542

Thanks for reaching out and asking for our opinion. I’m going to break down my answer in order to address the 3 points you brought up in the forum.

  • Just because the token burn did not affect the price of the token does not mean a remint will not. I am also of the idea that if you take an action as drastic as burning 1/4th or your total supply you should stick with it. It also sends the wrong message to potential investors and could be seen as the team flip flopping on it’s decisions.

  • The second point is the only one I could get behind. If the team is strapped for cash and needs funds I could see this as a possible means for funding. Although I would like to refer to my first point as my reasoning to not take that action.

  • I think it’s silly to say that minting directly to the DAO treasury would not effect circulating supply. Sure in the moment it won’t but the whole point of having a treasury is that it’s the organizations source of funds. To be able to use those funds would mean spending it, therefore the circulating supply is affected. Also since a large chunk of the voting power is in the hands of team members, it gives the team the ability to use the funds as they please.

Overall I think it’s a pretty bad idea. I can’t say I’m good with having my shares diluted unless for the reasons I stated in the second point. Thank you for listening. Regardless I’ll still be an investor. Thanks for building

His first point is valid. We do not want to send the wrong message to our investors, and if the consensus is this is bad optics for the team, we should take that into careful consideration.

And his 3rd point that is a fair stance to take. If we wish increase supply citing it’s impact on long term runway, it’s only fair we view the increase of token supply in the long term too, and they would affect circulating supply, since they need to enter the supply to generate funding.

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10

Hey all!

Just wanted to chime in. I do think that a reminting could be a great way to expand Ease’s financial runway, if particularly necessary or beneficial to the long term health of the project. Still, I think the community might benefit from more context and information on the factors at play with such a big move.

As Angurius states in @Chris_Armor 's post, though a proposal like this wouldn’t automatically dilute the circulating supply in a single vote, but would open the door to significant supply dilution much more easily.

Though markets are fickle and often irrational, $Armor is trading today at a ~20% drop vs. ETH since the time this idea was originally posted, a week ago. If we could assume this reflects investor sentiment or even a “pricing in” of supply dilution, I think bringing more context and guidelines about how the new DAO treasury funds will be specifically be used could calm things down. Communicating more precisely on considerations, benefits, and safeguards for long term investors feels like an important component to ensuring that the remint doesn’t become both a zero sum game for the DAO treasury and a substantial drawdown for individual investors.

2 Likes
11

Another great post Joel! :raised_hands: :slightly_smiling_face:

Angurius’ posts on Discord made me think too. Two thoughts, actually.

First thought:

We really need to have more informative and transparent campaign about the whole reminting thing. The OP is too short. Yes - it contains all the relative info and deductions. It gives all essentials, basically, without any redundant data. But the OP also comes from a very thorough and thought-out position, the idea maybe developing and maturing for weeks, before being condensed and expressed in a brief manner.

It created negative reactions. I myself had a negative reaction, but changed my opinion. Other community members also had negative reactions, but changed their opinions. Yet, there are community members who keep their negative opinions.

This could’ve been executed better. We could’ve extrapolated the matter, discussing it openly with all the collateral info and seemingly redundant details and considerations, thus mitigating emotional reactions.

I’m not saying all negative opinions on the matter are only based on emotion. I’m saying the negative reaction was common for everyone and it was avoidable. It was created by sharing too little information (as a quantity, not quality). There are two ways to manipulate someone’s emotional reaction - by sharing too little information, or too much, and we will avoid that in the future.

Second thought:

I can’t agree with Angurius’s opinion about the dilution, however.

The burn did not actually have an effect. It created the potential for a positive effect on price, but that potential never gave birth to the effect.
A remint, basically, will negate the potential for the expected effect on the price (that never came to be).

Metaphorically, it’s like an army that takes a battle position, but then falls back - potential arises, but no factual effect.
Your boss tells you “The company is locking in a great partnerships so everyone will get a bonus this month”. Partnership fails in the last moment, boss tells you “Yeah, sorry about that, it failed, so no bonus for anybody”. Guess what - you will still have your regular salary, as it was before the failed promise.

And hey, I’m also an investor, I was also >90% underwater at the time of the burn. But I’m being honest with myself here and I really can’t call my investment diluted by a remint of a previous burn. It’s just the same.

True - they are suing Musk for backing off from Twitter deal. But that move had its effect on Twitter’s price, and there is your case. The burn had no positive effect on the price. Sure, given enough time, so a bigger part of the total supply enters in circulation, it may have had. But we never got there.

That’s why I think there’s no case for the dilution thesis.

P.S.
I guess if investment decisions were made based on the news of the burn, one may say “I’ve been misled on this matter” and he/she would have a case then.

I guess, that’s why we vote on it. Because I too made a number of investments after the burn event. But given the fact the burn never had enough time to have an effect on the price, my investments aren’t really diluted. Only my expectations as an investor have been damaged on this matter.

But I will vote for the remint, because I have much bigger interest in fuller treasury and smoother swap to $EASE, pursuing the new usecases from here on, and much smaller interest in sending impeccable messages to investors. Real world is far from impeccable, it’s actually brutal and I don’t see any reputation damage for Ease if the bun is reminted.

2 Likes
12

Good points about the proposal not having enough information. We’d thought about this at a high level a decent bit as a team, but honestly this post was made without too much thought of trying to convince people one way or another. This post was made to begin discussion on whether this may be something the community wants to proceed with. This thought in particular is something I believe the community should take the lead on. But I realize now we should have introduced it with a lengthier proposal describing both arguments in more depth.

Regarding other posts of it seeming like flip-flopping: I don’t think that’s a bad thing at all. If the community makes a decision, then new information and events come about that make us want to change that decision, why would we not change it if we can? If an army learns the enemy knows their plan and is going to ambush them, would they proceed with the same plan?

That being said, I understand the negative reactions. It could very well have a negative effect on holders now or in the future.

Same with making any decision, no one knows exactly how any of this will play out. Beau recently recommended the book “Against the Gods: The Remarkable Story of Risk” by Peter L. Bernstein about the history of risk, decision-making, and insurance. In it Bernstein says,

“Not acting has value, and the more uncertain the outcome, the higher the value of procrastination.”

Because of the debate within the community, the lack of time spent on that debate before token launch, and the fact that these tokens do not affect operations of the protocol for the foreseeable future, I propose an option C to allow us to procrastinate: add a function into the token contract that allows the DAO a one-time mint of these tokens, or the ability to relinquish that mint.

This would allow us as much time as we need to determine if this is the best course of action. These tokens would only ever be necessary if we need more than the 400MM currently in the treasury to make Uninsurance ubiquitous, so this decision may only need to be made years down the line. At that point we will have MUCH more information regarding its necessity so it should be an easy decision.

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13

There has been no further discussion on this. Robert’s proposed option C basically postpones the decision to a later moment when the need (or lack thereof) for reminting those tokens is much clearer, so we will go with that.

At any moment a DAO proposal can be started to re-mint the tokens (up to a max of 250m), making the total supply of $ease tokens 1 billion. Until that proposal is made and passed by the DAO, the total supply with stay 750m, the same as the current $Armor supply. At no moment there can be minted more tokens than that, irrespective of DAO votes.

Thanks for your comments and participation!