protos.com
Arbitrum-based Plutus DAO has announced plans to scrap its long-depegged plsARB token, allowing users to redeem their underlying ARB tokens 1:1.
However, not all users are happy. Some feel betrayed after they decided to exit at a loss, with others even suspecting insider trading around the announcement.
Plutus DAO launched plsARB in March 2023 to capitalise on the ARB airdrop. The DAO aimed to secure an influential governance position on Arbitrum and activate a native ARB staking programme, rewarding depositors to encourage participation.
The proposal to activate a staking programme in October 2023 received pushback and criticism on the Arbitrum governance forums.
As stated in yesterday’s announcement, “The path toward activating native staking yield for plsARB has been more arduous than anticipated, significantly impacting the product’s appeal.”
The team admitted that lobbying the Arbitrum ecosystem to activate a native staking programme for ARB, was ultimately unachievable: “Despite our efforts, we’ve concluded that the complexity of crafting and passing a compelling governance proposal exceeds our current capabilities,” it said.
Read more: Opinion: Arbitrum misunderstands the definition of ‘proposal’ and ‘DAO’
Redemption?
Yesterday’s decision to wind down the product will allow remaining plsARB holders to finally redeem their off-peg assets for the underlying ARB tokens.
Although users’ ARB deposits were a one-way street, exit liquidity was provided via a plsARB/ARB liquidity pool on the Camelot decentralized exchange. However, as confidence in the project waned, the price of plsARB against the underlying ARB suffered as holders decided to cut their losses.
While many plsARB bagholders may be thrilled at the chance to finally exit their positions, frustrations were voiced by those users who had exited at a significant loss recently, fed up with a lack of communication from the team.
Plutus DAO’s previous official communication, published December 29, suggested there were no change in plans for plsARB, which the team believed would be “very lucrative for users in the future once ARB staking goes live”.
Others were angry that redemptions had not been allowed earlier, despite apparently being an option for select individuals.
Read more: SushiSwap team wants to kill DAO to benefit themselves
With plsARB/ARB trading below 0.5 for much of the second half of 2023, and around 0.6 as recently as April 6, some believe the price action in the lead-up to the announcement looks suspiciously like insider trading.
When the announcement was published, the plsARB peg hit 0.98, up from 0.75 directly before the announcement. At the time of writing, plsARB is worth approximately 0.92 ARB.
