This proposal aims at converting FTT market reserves into Euler to save Protocol’s assets.
Motivation
FTT is a native token of the FTX crypto-currency exchange that on 11 November filed for bankruptcy. On November 14 the office of the United States Attorney for the Southern District of New York began an investigation into FTX’s collapse.
Since then, the FTT price has dropped 10 times, stabilizing at around 2$ per token for the time being. This affected the FTT market reserves for 6,64K FTT. The current value of the reserves is around $15K in comparison to $150k before FTX collapsed.
Unlike other dramatic decrease in price of assets that is not unusual for the crypto industry, FTT’s parent company FTX filed for bankruptcy meaning that it will cease to exist. Therefore, the FTT price will eventually go to 0.
Against this background, although the FTT market still de facto exists, it represents an artificial gambling-like asset with no company behind it.
In this regard, it is proposed to convert accrued FTT market reserves (6,64K) to ETH with the aim to save protocol’s money.
Yes - Convert FTT reserves to ETH
No - Do nothing
Converted ETH shall be moved to the Treasury
Converted ETH shall be moved to the WETH market reserves
My initial idea was to move it to Treasury. However, with u asking this question, I think maybe it would be a good idea to move reserves to WETH market, given recent proposals, including E-mode for USDT/USDC and WSTETH/WETH. All in all, I m open to any suggestions on this.
@Raslambek thank you for making the proposal, think this a great idea to convert FTT to WETH, the only thing to consider is the timely implementation of this proposal if it goes through! as the slippage is about - 6.5%, liquidity might dry up as people exit the market and there could be a lot of MEV for an action like this.
Support. FTT is fundamentally worthless and should be converted to Ether ASAP.
I think the WETH should be put into reserves since the FTT is coming from the reserves. We then ensure that the capital provides the same function: protecting the protocol.
It is paramount that we convert the idle FTT before it goes to zero.
Putting the converted FTT towards WETH market reserves makes more sense as it would add some extra security for lenders and an extra ~15,000 of WETH sitting idle in the treasury would not make much of an impact on treasury holdings.
This proposal aims at converting FTT market reserves into ETH to save Protocol’s assets and move them to WETH market.
Motivation
FTT is a native token of the FTX crypto-currency exchange that on 11 November filed for bankruptcy. On November 14 the office of the United States Attorney for the Southern District of New York began an investigation into FTX’s collapse.
Since then, the FTT price has dropped 10 times, stabilizing at around 2$ per token for the time being. This affected the FTT market reserves for 6,64K FTT. The current value of the reserves is around $15K in comparison to $150k before FTX collapsed.
Unlike other dramatic decrease in price of assets that is not unusual for the crypto industry, FTT’s parent company FTX filed for bankruptcy meaning that it will cease to exist. Therefore, the FTT price will eventually go to 0.
Against this background, although the FTT market still de facto exists, it represents an artificial gambling-like asset with no company behind it.
In this regard, it is proposed to convert accrued FTT market reserves (6,64K) to ETH with the aim to save protocol’s money.
I already voted against this proposal and am following up here to explain my rationale in more detail:
This proposal doesn’t meet fast-track criteria in my view. The protocol’s FTT reserves are not at risk of theft or loss, and the community seems to agree that they are not / should not be worth much of anything. Fast-track proposals should be reserved for zero-day exploitable bugs or when there is otherwise reason to suspect an imminent threat of meaningful loss or harm to the protocol. Most of the comments on this thread seem to agree that the value of FTT reserves is not meaningful or material.
I think it sets a messy precedent for governance to trade reserves while the token’s Euler lending market is still active with nonzero lending and borrowing activity. If this proposal passes, the FTT market on Euler continues chugging along with active lending and borrowing, and Euler continues to accrue reserves which would in principle need to be swept again (how often?) if the conditions motivating this proposal remain true. I think it sends a signal to prospective users lending/borrowing long-tail assets that governance is liable to play with that market’s risk profile based on sentiment around the token’s future value.
The tl;dr is that I don’t think governance should be trading a market’s reserves without also deactivating the market (not sure if that’s actually possible with Euler’s contracts) or otherwise changing the market’s parameters to effectively force-close the market entirely.
I absolutely agree with @allthecolors that this proposal doesn’t meet fast track criteria. But anyway, I support the idea to not hold reserves into asset which is gradually dying.