Meter compensation plan proposal

Foreword: A few days ago, Meter released a compensation plan in response to the Meter Passport exploit on February 5, 2022. The plan mentioned that the affected users would be compensated with MTRG for the overall loss of USD 4.25 million. But as an active member of Meter’s Chinese community, I think that utilizing MTRG to compensate users affected by the exploit is not in the best interests of affected stakeholders and will likely become an obstacle to the development of the Meter Ecosystem. Therefore, I propose that the Meter Foundation should use the foundation’s revenues and future fundraising to repurchase PASS tokens in stages after issuing the Pass bonds.

Purpose of the proposal: In the revised compensation plan, change “compensation with MTRG tokens in 12 months” to “Meter Foundation repurchases PASS tokens in stages”

Reason for proposal:

Why paying with MTRG tokens is a lose-lose scenario

1. MTRG token compensation will adversely impact the development of the project

With over 4.25 million worth of MTRG to be paid over the vesting period of 12 months, there is a potential risk of continuous sell pressure on MTRG over the coming year. This risk is further exacerbated by the fact that half of the compensation will go to the affected users on Moonriver, who would not have the same conviction to stay invested in the Meter ecosystem as the affected users of the Meter ecosystem. The overall result would be lower demand for the token by new investors and institutions over the year due to the potential sell pressure and lack of upward movement in price.

MTRG is also a key component of all major incentives driven by the Meter ecosystem – Hackathon, Developer Grant Program, Bug Bounty. With the compensation paid in MTRG, the efficacy and participation in these incentive programs will have a negative impact.

With an adversarial impact on the growth of the ecosystem, the compensation in MTRG is not beneficial to both the affected users and the Meter community.

The Furucombo Equivalence

A typical example is Furucombo. As a star project invested by Binance, Furucombo released a similar compensation plan after $15 million was stolen in 2021 (Furucombo Mitigation Plan: https://medium.com/furucombo/mitigation-plan-e498a95d335e), few new partners have been introduced since the release of the compensation plan (for details, please refer to this document: Furucombo weekly report collection)The development of the project is greatly affected by this compensation plan. This compensation plan is undoubtedly killing the chicken and getting the egg.

Potential risk of users being compensated not getting the full value

With a compensation plan equivalent to cutting the chicken, the users affected by the exploit actually get lower compensation than initially planned.

With a wider opinion that the current market conditions could continue for some time, a lower buy pressure and resultant sell pressure from the compensation plan would mean the affected users would not get fully compensated for their loss.

Further declines in the market could also lead to a gradual loss of market liquidity due to the impact of impermanent loss over the potential farming rewards. With lower liquidity, the price impacts will be larger.

As far as the current depth of MTRG is concerned, the 24-hour trading volume is only US$290,000, while the gate exchange, which has the largest trading depth, has a depth of only tens of thousands of US dollars.

image

(Data source: coingecko)

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(Data source: CoinGecko)

And 4.25 million USD, divided into twelve months, will generate 354,000 USD worth of sell pressure every month. This magnitude of sell pressure without resulting buy pressure can impact the price of MTRG considerably.

As the price drops, so does the conviction of remaining holders.

Why it would be better for the Meter Foundation to buy back PASS tokens

Reliability and Accountability of Meter Team

In the six months since I became a volunteer of Meter and started to take charge of the Meter Chinese community, I saw the efforts and persistence of the Meter project team. With a strong team led by Mr. Zhu, the CEO of Meter, and the consistent developments across several projects in the Meter ecosystem like Voltswap, Meter passport, Sumer, etc.

I have seen that in the last few months, Voltswap has been listed on the Meter mainnet, Theta mainnet, and Moonbeam mainnet successively within a few months of its release, and Meter Passport has secured partnerships across dozens of impactful projects. The ecosystem has also grown significantly over the last few months with numerous defi protocols and integrations (Ampleforth, Sumer, Defillama, 0xtracker, Gnosis Safe, Voltswap, Golucky.io, BEPRO, Chee Finance, TreasureBlox, BusinessBuilders)

NFT Market: ToFUNFT, Businessbuilders, Boring Mantis,

Support Networks on Passport: Energy Web, POLIS, Meter parallel chain Verse, multi-chain smart contract platform Parastat, Polygon, Moonriver, Moonbeam, Avalanche. Future partnerships include projects such as Acala, Helmet, and equalizer. These are just some of the collaborators I’ve listed.

Meter’s ecology is taking shape! Why should we not choose to trust Meter?

Successful precedent: Bitfinex successfully pays off debt after 120,000 bitcoins are stolen

In 2016, the Bitfinex exchange was shocked by a security breach, which resulted in the theft of 119,756 BTC on the platform, which is equivalent to nearly 36% of the assets of platform users. Then Bitfinex resolutely chose to issue bonds and hold irregular repurchases. At first, many people questioned that the token compensation was just to introduce delay and that Bitfinex had no intention of compensation. However, with the normal operation of Bitfinex, the exchange grew larger and was able to redeem the bonds successfully far earlier than anticipated.

For the income source of Meter Foundation, Meter has various income sources, including the future financing of the foundation, foundation investment, project cooperation income, and other various income sources.

Finally, I would like to say that in history, any success has unmistakably gone through setbacks, and those who can endure the setbacks will taste success. Between “loss of 70-80%” and “choose a reliable team and stand together through thick and thin”, I think the latter is obviously the correct answer especially when Meter’s ecology is finally taking shape. As long as it grows, compensation for the affected users should not be a problem.

Wish the Meter community a fortune!

5 Likes

Hard to say I’m not disappointed after the whole exploit thing, this looks like a solution, hope it could work.

2 Likes

I have carefully read everything you have written. I think this is really the optimal solution (and I am speaking as a user who unfortunately money because of this hack) especially for the fact that this solution will allow the meter team to be able to carry out the project with much more peace of mind and above all with many more resources. without affecting the price of MTRG too much.
Obviously I deduce that the compensation times will probably not be more than a year but a little longer but for me now the important thing is that the meter team can continue to develop without losing the confidence of the investors.
I believe that in this way all the investors who have suffered the hack can be satisfied without going to affect the project.

So I am really happy if we go to vote, I will definitely vote in favor. :slightly_smiling_face:

That is very important and will be referenced when loss happens like this in the future.

we have to identify who should respond to the loss of something like this exploit first.

Team, Meter foundation?
Meter price(all meter community and ecosystem)?
Investor?

we should all know that hack happen almost daily, the investor should take their own risk, and we also know Xiaohan and meter team have work hard and avoid something like that happening. We participate because we still think meter chain is most profit and safe than other chains even though no one can guarantee any things.

We should try our best to compensate the loss.
But more decentralised, more DAO methods should be prefer. Meter community and ecosystem, $MTRG price should shoulder the compensation as much as possible and not let meter foundation shoulder this alone.

“Meter Foundation repurchases” mean Meter foundation guarantee something like this, and “in stages” is uncertain, we should not take too much times on this.

compensation with MTRG tokens maybe have some sell pressure in short term, but we still think meter community know the $MTRG value, and sometime the price is not because of meter performance but the world economy and crypto environment.

:+1: :+1: :+1:Wish the Meter community a fortune

It seems to be a good plan, and I support it

MTRG tokens are only a compensation scheme and the token price is only the factor being influenced.
And the bearer must be the Meter Foundation, just what kind of compensation scheme will the Meter Foundation choose

A number of users have mentioned that they would like to be able to create a flow pool of PASS-MTRG and have PASS-MTRG participate in mining.
I think this suggestion is great

1 Like

The proposal was released and discussed for some time, and the following issues were raised by the community for the time being.

1、Certain users have proposed a plan to create a flow pool of PASS-MTRG and participate in Meter eco-mining.

Answer: This proposal is perfectly fine and should be implemented.

2、Some users want to quantify the plan of Meter’s repayment ability.

Answer: Since Meter’s repayment ability mainly relies on Meter’s future financing plan and the treasury diversification plan completed through partners, etc., there is a certain degree of confidentiality, so it cannot be disclosed for the time being.

3、 Certain users hope that the program to compensate MTRG can be combined with the bond repurchase program.

Answer: The root of the change plan is to change the expectation of MTRG’s smash, if each of the two programs takes half, then the significance of the bond buyback program will be greatly weakened.

4、Some users ask whether both plans can be offered and users can choose by themselves?

Answer: According to the prisoner’s dilemma of game theory, the result of such a black-box choice is that almost everyone chooses the MTRG compensation scheme. This is because the users who are choosing bond buyback are actually picking up the slack for the users who are choosing MTRG compensation.

I am against this proposal.

I think a better approach would be the Meter foundation purchase the ETH and BNB themselves and send the corresponding amount to the affected users. They can either get the money from selling the MTRG or by issuing the bond like PASS tokens.

This plan doesn’t has any term around how and when will the Meter foundation repurchase PASS token in stages, so the Meter foundation can delay the repurchase forever, and all of the affected users will lose faith in the project. If the Meter foundation could take the steps Wormhole bridge had did and recover all of the loss of the affected user, the user’s faith in the project would quickly recover and that will also give long term benefit for the Meter project.

First off, I’m glad we are able to have this discussion.

To me there are two issues. The first one is the ~ 4 million stolen. Replacing that. The second issue is the Return that stolen amount is no longer producing.

Call it what you will.

With that line of thought, my intention with the original investment was to earn Volt.

I am willing to wait a year to ever touch (sell) that investment, so long as I can earn the Volt I would have been earning.

Is there a way that could be accomplished? This would provide a 1 year guaranteeing an increasing the TVL, liquidity itself and supporting the entire community by investing into the pools.

Also, one issue I have with issuing just MTRG is that is only half of a pair. The first thing I would probably do I sell half for whatever I was going to pool it with. I that just me?

Who wouldn’t agree with that. For the record, I’m against the Hack and being robbed as well!

Thanks for the reply
First of all, meter would not be having this discussion if it could do the Wormhole Bridge. So meter can’t do this kind of compensation.
Secondly, the amount stolen will generate a return and we will try to give some return on the amount stolen.
Third, the first compensation method will affect the TVL of Meter’s ecology and bring a

To be honest I think it’s a sensible proposal. A lot of downward pressure on price could be applied over the next 12 months with the straight forward MTRG compensation. If you crunch the numbers 354k USD is 4-5% of the trading volume we currently see in a month if you go by the 24h trading volume of MTRG on coinmarketcap.

On a psychological front people like to see there’s progression and not everyone sees the big picture and will use the chart as a way of measuring the development of the project (rightly or wrongly). Protecting the price is a strong morale booster for investors old and new alike.

I support this proposal. It’s definitely the best option presented so far.

Voting has begun.
vote address : Snapshot

I don’t think the proposal should be voted using MTRG holding. For any big MTRG holder, of course they wouldn’t want their share to be diluted. I think voting using the VOLT token holding would be a far better alternative.

The proposal is funded by the Meter Foundation, which is vested in the Meter community, and there is no doubt that it is natural for MTRG holders to vote.