I highly doubt anything involving inflation beyond the current rate will be on the table after such a thorough rejection be the community before. So I don’t think you have much to worry about there.
Directing part of staking rewards is one of the options that should be considered and assessed, I agree. But that’s really just one of an incredible amount of options. Especially if this group is strictly focusing on restoring the peg. And should the community approve, then they can take more aggressive and productive actions then might be politically viable if it were the team doing something like this on their own. Still, everything hinges on the team following through as well on their end of course.
If this is going to be something to effect of the long term roadmap of decentralization sped up and 2026 is here faster than the team or anyone else thought it would come, then any kind of well rounded recovery is also going to have to have people from the community focusing on acquiring, reengaging, and retaining users. Not sure if that’s what the team has in mind now or not. Somewhat got that impression from Stephen’s AMA, but not certain.
As far as the repeg goes and what’s possible. Seems many people in the community take a look at the problem and start with the original large number like you mentioned: $100 million, and then the treasury and conclude that it’s not going to be possible. I think that’s reasonable if you’re considering it something like an immediate debt to pay. But even ignoring future growth potential(since nothing is guaranteed) when you think about it as just a process of repegging and what the actual current state of the market is, there is a lot more going in favor of repegging then you might think.
To start with clearly the market doesn’t value the assets anywhere near the native values. So I could buy 1 1ETH right now for around $260/9300 ONE and send it to the burn address, and as much it would it would be a drop in the ocean, right now it shows progress can be made at a fraction of the value of the native assets. Of course the lack of liquidity and the ‘true’ book behind everything which is constantly changing with new information and such makes it really quite complicated. And both these things are probably true: there are probably larger holders who lack the liquidity to exit and would take a reasonable OTC deal here from some hypothetical contract that would burn the assets after at lower than the current rate on dexes, but higher than they would get from just getting killed by slippage from the illiquid pairs. On the other hand it’s also true that some people are buying the assets now and will continue to do so later as a speculative play because they either believe they will repeg in the future and want to hold them, or again some hypothetical non-custodial contract from this group is offering them a swap that will then burn the tokens in exchange for something they value higher than the market price of the asset(like say vested ONE over some longer period of time as a simple example not even considering things like governance). In both cases you should be able to burn assets at far below the native rate. At least for a time. So right away the idea that on any immediate time frame anything approximating $100 million would need to be spent to make progress doesn’t seem necessary to me.
Another thing is which is again somewhat speculation on my part is that there’s probably more assets sitting dormant in wallets that might be either lost or forgotten about than you might think. And on that scale, not even just lost keys but some people who might have just completely disengaged and left their LP going and plan to come back in a couple of years. We’d definitely want as many users back in the longer run though, but for some reason a surprising amount of crypto just sort of sits there collecting dust. So there’s not necessarily any immediate need to fully cover everything, but of course that’s the long term goal.
But all these little advantages really add up if you’re just going to aim for a repeg, the effective liabilities are likely less than you’d think when you assign some reasonable probability ranges to different sets of dormant coins. I’m not saying you take this as something to rely on for a repeg, but just consider how much the market value of BTC is based on the market assigning a very low probability that Satoshi isn’t going to wake up and send something perhaps approaching 1 million BTC to exchanges tomorrow. Again it’s not that I think a huge percentage of the assets will never move, or it’s a bunch of Satoshis who will never sell them out of the goodness of their heart. It’s just the worst case scenarios are unlikely and there are hidden advantages like this.
We could end up in a sort of algo-repeg phase, where eventually the assets are pegged and liquid enough on the bridge that combined with some slight prodding and maybe some backing from some kind of ONE reserve contract to allow people to burn assets for the full native value that the UX and market is the same as if it was a fully backed peg. As much as undercollateralization might be a scary word, the current state is zero collateralization. So things like this are probably worth considering for the future, and in this case it would only be a transitory phase anyway. But everything ideally functions the same from the users perspective. Figuring out a way to non-custodially stake most of the native ETH while either filling up the bridge on demand, or at a predictable rate for exits is also a way to stretch out smaller amounts in to possibly creating the same UX as if it was fully backed and just sitting there in the bridge.
We do have a couple of issues that current have not worked in our favor, that is the price of BTC and ETH mostly. Would be worse for that to change in the other direction though and it’s also something that can be addressed. Also I was looking at the affected tokens and for example the 1AAG one has like 84.6 million supply on chain here, but only 6.6 million was stolen. So I don’t know exactly what the implications of that are since I hadn’t thought about it and just happened to think of it now, but for governance at least it’s something worth looking at.
Also with governance one of the affected tokens, FXS has a system where you can lock your FXS into veFXS for up to 4 years(and get 4x the voting power and maybe increased rewards too but I’d have to check again). If people get ONE in some form, things like that can really help smooth out the curve and with the proper incentives actually give those willing to commit like that power to shape the recovery and rewards by taking a longer term view and eye towards future growth.
So I’d say the repeg part is more likely than people think. But also it can be almost ‘too’ good from what I can see without some other initiatives as well. Some work will have to be done on the softer side of things related to user growth and retention and such. Even though just the whole restoration narrative itself does a lot of the work there, getting back and exceeding old user growth again will end up being even more important in the longer run where the resources needed to repeg will probably seem relatively quaint in retrospect.