Hello ReFi Community,
We’re following up on our post last week to share specifics about the two upcoming options for ReFi token holders. We’ll also share step-by-step instructions to walk you through this ‘token migration’ process.
To recap, there will be two options for current holders based on the number of tokens they hold:
- Claim a $USDC payout from your portion of recovered Treasury funds, opting not to continue along with the team + community.
- Claim an IOU of the native token from the protocol we’re currently building in stealth mode. We’ll call this $XYZ token, which will be claimable in Q1 2023. $XYZ tokens will be vested linearly for 6 months with a 6-month cliff.
Before we dive into the specifics, it’s important we set expectations with the community and shed some light on what we’ve been discussing internally over the past few weeks.
The hack erased a large percentage of our token’s market cap and assets in the ReFi Treasury. We currently have a combined ~$750k of liquid capital from our Treasury. Before the hack, the market cap of the $REFI token sat around $5.7M. The market cap now sits below $500k.
Our LP positions (REFI/ETH) have been fully compromised by the hack, so we should not expect to salvage anything at this point. Although a portion of our LP was unlocked on the 11th, the hackers control it and have blacklisted us from accessing the funds. To re-iterate, we have ~$750k of liquid capital from our Treasury moving forward and zero access to our LP positions. The hackers can control the LP position so that if you attempt to swap your REFI tokens they would just take 100% of the swap.
An update on the Dec 11th unlocked LP:
- On December 11th, the LP was unlocked, and the team moved the LP from Unicrypt (token locker platform) to a separate wallet.
- Before selling the LP, the hacker (who controls the REFI token contract) blacklisted the REFI token. This means that you can’t sell REFI anymore. Although the team controls the LP, since the token is blacklisted, it’s impossible to sell.
- Incredibly petty move from the hacker because they can’t do anything with the LP either. Meaning the Liquidity Pool will stay there (with ReFI/ETH tokens) indefinitely until the hacker decides to whitelist the REFI token.
- The team has a few ways to potentially salvage the LP if the hacker whitelists the tokens, but since we think the hacker is most likely in this chat, we won’t disclose our strategies.
- Therefore we have to write off the unlocked LP as ‘lost’ because we don’t believe we’ll have access to these funds.
The process of deciding how to allocate the remaining capital and transition our community to the new protocol was not an easy one. The team spent several weeks going back and forth on the tradeoffs between several approaches and are moving forward with what we’ve collectively agreed is best. We won’t be able to please everyone — and we don’t expect to. Just know that a lot of discourse and intention went into the decision made, and it’s what we’re confident will bring the most success to our community and new protocol. We hope you’ll join us.
Another important note: This new token is not a migration from ReFi v1 to v2. We’re winding down ReFi and building out a new protocol while giving everyone a chance to exit for $USDC if they choose. Any remaining runway after the $USDC payouts will be used to help fund the new project.
With that said, let’s break down exactly what we’re covering here:
1. Details on the numbers & percentages involved in the token migration options. Specifically:
a) How much can you expect to receive in $USDC if you go decide to cash in your existing tokens today, and what percentage of the post-hack value that is.
b) The percentage and value of the $XYZ tokens you’ll receive, should you choose that option.
2. A how-to guide on the token migration process for both options.
Option 1: Claim USDC from our remaining Treasury and LP
We are making all liquid Treasury available for those wanting to exit the project. Any leftover funds from holders choosing not to cash out will be used to fund the new protocol’s LP. Using remaining capital to fund $XYZ token’s LP is essential to providing sufficient liquidity and ensuring a smooth market at launch for buys/sells. If everyone decides to exit for $USDC, we’ll utilize a private sale and/or start with a smaller LP for the new token.
The existing liquid Treasury will be split out equally in proportion to how many $REFI tokens you hold. Given the current value of the Treasury, you can expect to regain 14.5% of your pre-hack value and 173% of your post-hack value.
This percentage is not what we wish we’d be sharing. The hack, along with recent market conditions, created a less-than-ideal circumstance for us, but we want to make it right with our existing holders by offering a straightforward way to cash out. From day one, we emphasized that the Treasury belongs to the holders, and that’s exactly what we’re sticking to here.
Option 2: Claim an IOU of $XYZ tokens (launching Q1 2023)
Currently, we have 890M $REFI tokens (89%) owned by existing ReFi holders. In an ideal world, we’d give an equal percentage of ownership in the new protocol, but this isn’t feasible. We’ll explain why — and also detail how we’re making the dollar value of $XYZ tokens more comparable to your pre-hack $REFI holdings.
For the XYZ protocol, we knew from experience and research that if 89% of the token supply was already allocated, it would be difficult to attract new holders and positive trading volume. We asked ourselves this as a team: would you invest in a new protocol if 89% of the supply was already owned by insiders (team, advisors, private sale, or token holders from a previous protocol)? Our internal answer was a resounding no, so we needed to figure out a better approach that was fair to the existing ReFi community and also set up the new token for success.
Our goal with this new protocol is to retire the FaaS model and the ReFi Brand/Project, which we’ve learned throughout 2022, no longer has a compelling product-market-fit on chain. As we all know, this space moves fast and is very narrative-driven. So, we’re developing a trading-based protocol that solves a very manual, expensive & time-consuming aspect of the current trading experience. It’s applicable for both institutional & retail investors and will be a tremendous value add to the industry throughout 2023 and beyond (#RealYield). It’s a product that we’ve validated demand for and have a lot of confidence in. We’re excited to share a lot more in the new year.
A few key pieces of attracting new users & investors are through offering a token that has value accrual, can appreciate with protocol volume, and has fair tokenomics at launch. We needed to strike an equilibrium between compensating existing ReFi token holders that wish to be a part of the new protocol and ensuring the long-term growth & success of the new protocol.
We’re allocating 20% of the total $XYZ token supply to ReFi holders choosing Option 2. We plan to launch the protocol at a market cap of $500k and a Fully Diluted Value (FDV) of $10mm, meaning your vesting $XYZ claim will be worth 35% of the pre-hack value of your $REFI tokens. ReFi token holders choosing Option 2 will be required to claim their $XYZ tokens at launch — this prevents an unhealthy ‘dead supply’ of tokens that’d come from inactive holders receiving an airdrop and more directly rewards our active community members. Unclaimed $XYZ tokens will be allocated to the XYZ Treasury.
We’ve also included this calculator that outputs the dollar value you would receive for Options 1 and 2.
Additionally, if you opt-in for the $XYZ tokens, your wallet address will be eligible for a private sale of the new token at a discounted price. Details about the private sale will be released closer to the launch.
To conclude, if you decide to stick with us, we’re rewarding our loyal holders with a guaranteed allocation of 20% of token supply at zero cost and the opportunity to acquire up to 10% of future tokens in a private sale before launch. Both options will have a 6-month cliff followed by a 6-month vesting period.
Token swap logistics
Token Swap is planned to go live on the 15th and will look like this:
The Token Swap consists of three parts: Website, API & Contract, and while the Website and Smart Contract is ready the API is still underway (thus the delay). We plan to have the swap live on Arbitrum where you can connect the address that owns ReFi in BNB and/or ETH and because we took a prior snapshot it will register for users (Even though you won’t have any REFI tokens on Arbitrum).
We will release a separate how-to-guide once the tokenswap is live. Thank you for your patience!