In the highly risky cryptocurrency markets, it seems that there is never a day without an interesting event. This time, the situation is much more complex. A significant portion of investors claim that the proposal presented by the team is a financial crime. Now the cryptocurrency community understands that they need to approach pre-sales cautiously.
A new proposal from the team of Parrot Protocol, a liquidity network based on Solana, has sparked debates among community members. There is a four-day period for the completion of the vote, and if the proposal is approved, the redemption of PRT tokens will take place. Then there will be a transition to a new protocol without the tokens.
According to the proposal, the redemption price for PRT is set at $0.0045 per token. According to CryptoRank’s data, the protocol has raised over $89 million since its inception in 2021, and there is a significant gap between the sales figure in pre-sales and the redemption value. If the proposal is approved, investors will have to return their tokens with a loss of approximately 90%.
PRT Token is Coming to an End
The protocol’s plan does not explain the reasons behind this move, only mentioning that “many PRT holders want to use their tokens for treasury value.” The proposal also follows changes in Parrot’s tokenomics, reducing the token lock-up period from 12 months to 7 days starting from November 2022, claiming that it will create more flexibility for stakeholders to enter or exit positions.
Comments from community members indicate that 81% of the tokens are controlled by the team. However, Parrot’s team denied these allegations on Twitter, stating that the treasury tokens are never touched or used for governance purposes. A breakdown provided by CryptoRank shows that 35% of the tokens are Protocol Incentives, 20% are held by the Team and Angel Investors, 10% are from public sales, 20% are from Seed investment rounds, and 15% are distributed in other items.
Furthermore, the proposal does not clarify the fate of abandoned funds after the 8-week redemption period, and community members suggest that the funds can be converted into cash by insiders. Several suspicious circumstances, including the early unlocking of tokens held by investment firms, indicate that lawsuits may soon be filed against Parrot Protocol.
