Solution Proposal - Realistic strategy to recover. (updated after the team’s disclosure)
Aim: Protect the credit of Alex team (same as the price of ALEX in this situation)
If the team lose their credit, the price of ALEX will plummet to the ground 0$.
Proposed solutions
- Raise funds from VC and spend all the money in the pocket to get 13.7m STX to provide LP holder
- We know this is best, but it is unrealistic at this point. No VC will invest to the team, who is in danger of bankruptcy.
- Proposed solution by Alex team.
- We know if this occur, the team will lose their credit and reputation. Everybody will remove their LP in the DEX and swap their ALEX to STX or others. It will be like bank-run. Then, the price of ALEX will plummet. Maybe at least -90%. Every user and the team, everybody will lose their money. Team’s next projects, LISA and XLINK will also fail. It will be disaster. Please, don’t dump ALEX.
My realistic solution.
- Collect STX as much as the team can. At this point, it is 6.5m + alpha
- The team can use 7m $ among the recent 10m $ fundraising. That accounts 3.5m STX
- The team can collect 3m STX from among the frozen STX in many CEX exchanges.
- The team should also do their best to make any block deal for STX with their ALEX. Maybe STX foundation or Muneeb could assist. I wish they could make additional 1.5m STX, which would be not so difficult.
- Now let’s consider how many STX exactly are needed for operation? 11m STX rather than 13.7m
- Among the 13.7m STX, maybe around 70% are from ALEX-STX. Around 10m is from STX-ALEX. The exchange rate between STX:ALEX changed from 1:8 to 1:14 because the price of ALEX went down after the hack incident. The initial LP of STX-ALEX was composed of 10m STX and 80m ALEX. This components of LP should be changed to around 7.5m and 105m ALEX due to the impermanent loss. The team can easily make up extra 25m ALEX in the liquidity, which is much better than dumping ALEX to the LP holder. Therefore, the team need around 11m STX rather than 13.7 STX in total.
- If the team could be able to collect 8m STX, they could refund aroud ~ 70% of lost STX. Still short of funds. (Of course, it should be distributed equally according to the weight of LP, that’s basic)
- With 70% of STX, distribute equally for every affected LP vaults. Every vaults, have collateral of 70% STX and 100% the other. For vaults, such as STX-aBTC, it is easy to make 85% of LP by exchanging BTC to STX. For STX-ALEX LP, it would be very difficult to make 85% LP, but try best to make any block deal rather than exchanging in the cex market.
- Distribute 85% of LP to all LP holders equally according to the weight of LP
- How to fill up the shortage.
- We all know Alex team is preparing the launch of LISA and XLINK project.
- Make airdrop for the LP holder about 10% of total supply in each LISA and XLINK project with a vesting period less than 1 year. The airdrop should be based-on the weight of the size of lost LP.
Summary
- LP holders: receive 85% of their original LP. Let’s regard we invest 15% of our LP for the initial coin offering of LISA and XLINK.
- Alex team: spend 7m $ to get 3.5m STX, 25m ALEX to put liquidity, and maybe around 20-30m ALEX to get 1.5m STX through the block deal.
Team still hold more than 100m ALEX in their treasury, which is enough to proceed for the success of Alex protocol.
In conclusion, the LP holder couldn’t be 100% satisfied, but in this way ALEX can be in operation and have the future. In this way, LP holder, the Alex community all will become individual vc for the success of LISA and XLINK. Our community will be much stronger. If the #1 dapp ALEX is in operation, then the STX is also on the right track. The price of our precious STX and ALEX coins are back in the race to the bull market.