It’s a fair and good analysis.
Recovery One is an ambitious proposal that could result in a higher reimbursement rate if it works. With this comes a larger risk it fails, all the funds spent on rONE utility/governance/organization are spent, the utility does not work, people don’t “ape” into rONE swapping for it, an overwhelming number of people swap out of it for the rage quitting option and the victims staking it or holding it have to wait until the end to get a 1:1 conversion rather than receiving daily ONE amounts or accept whatever the rage quit parity happens to be along the way.
This is why I call it a gamble. If its successful, victims could see 100% on the dollar returned to them or even more because if they strike magnificently on utility it could become a very valuable asset to utilize and generate significant revenue with fee sharing or other agreements. This agreement from Tranquil only increases my confidence that individual deals could be negotiated and bring this to a viable plan with utility never before attempted due to buy-in from massive projects like Defira. However, this is a hefty price tag for that risk. Tranquil gets $1M and they add it to a small part of the game and incentivize the lending pool. That might not be enough to do anything. Why wouldn’t that work with depegged assets anyways? Tranquil V1 lending already highly incentivizes depegged assets.
If the plan works, it could result in more compensation. If it doesn’t, it could result in bagholding for 3 years and then ending up getting basically what you would have gotten anyways under Stephen’s except its 3 years later. This means you take on both the risk of rONE individually being a success AND the risk of ONE being a success at the end of the tunnel. If ONE fails, rONE most certainly would. If ONE succeeds, its not guaranteed rONE would follow.
Where I don’t agree is the single digit parity value in Stephen’s original proposal. Stephen’s proposal had two options. Option #1 assumes 2.5B ONE is minted. That was in reference to paying back victims at $0.50 on the dollar but the payment is in ONE and takes place immediately but equally over 3 years. People would start receiving ONE immediately, and can go stake that in the ecosystem just the same. We could just the same highly incentivize ONE to improve Stephen’s proposal. Put all the incentives on ONE token, and everyone benefits including the victims and everyone else.
A victim will have received 33% of the ONE entitled to them within the first year. Only risk they take is ONE fails in which case the ONE they receive may not reach this parity amount. If ONE rallies, its potentially more just the same so there is still massive upside for this proposal because the proposal sets it at $0.02. So we take on the risk of ONE token only and still have huge upside and still can stake ONE on any platform for additional returns. It also included a second option of higher inflation at 4.5B ONE minted which would represent 100% reimbursement of pegged value lost over 3 years. Again, what’s the risk? That ONE does not do well. Then that could be different. Same upside if ONE crushes it. Why doesn’t every platform just incentivize ONE and then if ONE hits $0.06, Stephen’s proposal could pay 200% or even 300% parity value to these people.
Tranquil and AAVE still get the entirety of their supplier balances paid.
Under Recovery One, rONE has to do well, it has to maintain its utility amidst rage quitting AND the victims still have to bank on ONE doing well in order to recover because ultimately, its equivalent to receiving 1:1 ONE at the end of 3 years but not the entire time unless I am misunderstanding the proposal.
Its not less risky. ONE could do well and rONE could not. Could it go well? It could. Hard to think it would if ONE doesn’t do well. Offering a lending pool doesn’t mean instant price support. Just look at any incentivized coin on Mimas for example, there’s plenty that have lost tons of value even highly incentivized.
Just because ONE does well, doesn’t mean rONE does well. There may not be a correlation given there can be rage quitting and also speculators at least during the 1st year in rONE only. Its a huge upfront price tag and adds a secondary layer of risk. Could that risk result in a valuable staking asset? Sure. But its going to cost Harmony millions. Could it result in a devaluing staking asset with an extremely expensive upkeep to keep adding grants to support utility, absolutely.
I also need to see more details of the absolute final proposal of rONE to compare it but the reality is this is about risk. It adds risk. Could it be more successful? Seems unlikely given if ONE goes up, the other proposal would still present the same upside because the minted amount and each person’s share is set at $0.02. It would just be earned faster and without the massive price tag. Of course Harmony still gives out ecosystem grants and should absolutely give one to Tranquil, that’s beside the point.