Why People Are Not Un-staking their legacy eRSDL and migrating to new contract

I heard on Semper’s call Howard and Ryan aren’t totally sure why folks aren’t moving their legacy eRSDL to the new contract on Reserve Lending. It seems pretty obvious to me as a user of RL so I’ll speculate:

  1. The new collateral factor ratio on the updated contract for eRSDL supply/borrow is significantly lower, so there’s less capital one can borrow under the new contract
  2. ETH gas fees are horrendous for average retail investor
  3. aside from borrowing stable-coins against the asset on the protocol, there’s no utility for an individual to stake (zero staking rewards exist for native eRSDL token when acknowledging high gas to on/off ramp into/out of protocol)

The conjunction of the new collateral factor lowered, and high gas fees creates very little incentive to do anything for legacy stakers (many of whom entered the protocol under the pretense of getting an APY reward for simply staking eRSDL). Many probably chasing the false hope of 1000% APY. It’s worth mentioning that for many to even consider repaying a stable-coin loan (for those that are leveraged) it would be partially illogical to repay said loan at this juncture, since I imagine many are hedging on bet that when almost any project they invest in, in crypto, in the midst of a bull market will outperform the APY to borrow said stable-coin (even at 30% APY). But again the gas fees impede those who may want to re-pay the loan but can’t afford to, or don’t have capital to get out.

The team has said prioritizing providing a more affordable L1/L2 integration to reduce gas costs (i.e. Avax or Arbitrum) isn’t as important as Reserve Funding launching, but have said they are interested in such a concept. I’m hypothesizing here, but seems their engineering team is small and cannot produce both RF launching simultaneously with providing a opportunity to bridge RL to a more affordably L1/L2… which, when you think about it, would make sense I guess. In the midst of this kerfuffle on what should be prioritized, I don’t foresee any changes to the ongoing liquidity issues ever-present due to this bind. If RL marketing can’t start due to this legacy issue, we’re all just grinding into the future in a pickle of sorts. On top of that, team has said on Semper’s call Reserve Funding will frustratingly not be bringing in
nominal liquidity to affect token scarcity by buying eRSDL out of the market (aka what many are calling “buybacks”) until Q2 2022 likely. If I’ve misheard that, please let me know.

What makes this even more complicated, is the team asks for these kinds of questions to be posited in the forum, but rarely do we get a significant dialogue going with leadership here. Responses have been tepid on here, so I again put this all out here in the hope of sparking some dialogue on how to move through this. I hope best things for this project, but the confluence of these factors present a very uncertain sense of retaining investors, improving liquidity, or expanding this project to new holders beyond those already invested and waiting for brighter days, which appear may come now in Q2 2022.

7 Likes

Agree with most of what you said, especially the lack of engagement from the team on this forum. I understand that the guys are busy, but you can’t expect people to come here and actively discuss ideas if the team isn’t participating. I am surprised that the team hasn’t posted about this legacy contract challenge here in the first place to kick off ideas. I’ve been paying very close attention to the project but only through the semper discussion learned this was such a major roadblock. There are lots of active investors who are posting on Twitter multiple times a day. Crypto never sleeps and neither do many of us, but we aren’t going to engage with a dead forum.

Gas fees for me, I only invested a small amount into the project and always seen it as a longterm investment, I refuse on a point of principle to pay the gas fees being asked currently, maybe they have more smaller investors like me than they anticipated, I’ll continue buying ersdl on exchanges and when I feel the time is right maybe move it to the new platform/contract. Although if the new contract is also going to suffer from extortionate fees I may not bother.

1 Like

Guess the Gas fees and no incentive to move would be the majority of peoples issues.

Transaction Gas Fees
Swap to loaned coin +1
Pay off loaned coin +1
Remove Collateralised $eRSDL +1
Re add collateral +1
Borrow again to get back in your position +1
Swap back to your play +1
UnFed Paying Gas -2
Total Gas Fees outstanding 4

These 4 gas fees could amount to $500-$1000 for smaller holders and lets be honest…would not be worth it for them.
For larger uses who have loaned and re invested. whats the incentive to move?


With regards to the new token due to collateral lowering…I believe all that needed to happen was to give people more time. Not force the collateral change within a week of mentioning it. Because crypto moves so fast a month or 2 months heads up would of probably cut it. This would of not needed the new token.

But i do think if you want people to get out the legacy token who do have loans is use exactly the same jump rate apy as raricapital which ive mentioned countless times…it would be up at 300% or so pushing people to sensibly make decisions on there investments and at the same time releasing some liquidity on the platform. Which is one of your big issues.

I dont no if you have funds available but also offering distribution rewards on the new token will make people move. Were all human and greed is real. Offering a pot of 250k or something for distribution on a first come first served basis would make a few people move. (a once its gone its gone type thing) Plus entice new investors. and at the same time you could be lowering the collateral amount 1% every day on the legacy token collateral amount down to zero. Gives people 2 months from then the legacy token is useless.

I’m not convinced the “marketing can’t start” is enough of a threat for people to budge.

Another approach you have to play the numbers game and figure out… if we hurt x% of accounts by forcing liquidations there is a high chance we can fix the issues and start aggressive marketing while keeping the majority happy…That is if you believe this is the only way you can start marketing of course and getting new clients on board…

Some things and options that could maybe help…or maybe not.

Why are people not moving???
…because why should they.
…Your prodding them with a twig.
…Prod them with a Tree trunk!

DO NOT MISS THIS BULL RUN!

4 Likes

This is the second time is as many months that I have been threatened with liquidation due to what is either a terrible lack of foresight or intentional sabotage.

At the time of writing, I am down by at least $50,000 after the SSS disaster and I have lost nearly half of my tokens from partial liquidation.

l only borrowed with a 10% LTV. Since then, I have been frantically trying to keep my head above water by repaying what I can, but the gas fees make this impossible.

After all of this, I’m now being told that I have to take an even bigger hit because of issues at your end and that if I don’t, you won’t be able to deliver on your marketing strategy? Frankly, why should anyone trust you after all of this?

Even if I could afford to unstake and restake, what incentive is there for me to do so?

It is extremely disappointing and I feel like I’m being held hostage. If early adopters can be disregarded like this, what does that say about your credibility long term?

I’m sorry to come on here and complain but it is starting to feel intentional.

3 Likes

Being pushed into a lower collateral factor with the only incentive being if you dont well force you/liquidate you is a bit weird.

Personally I am disgusted by the amount of inner-circle-jerking that goes on with the information from the team. Seems like a weird thing to not share and proliferate through the forum or townhalls solely. Not to mention the entire sham that is the ersdl DAO. These choices should be made into informative proposals that we can all compare and vote on, not hastily made choices argued about but eventually forced forward with no inclusion from the peanut gallery.

His sentiment about it feeling intentional is really starting to hit home.

2 Likes

Definitely not intentional and I appreciate your concern and perspective. We are software providers and have a limited number of arrows in the quiver so to speak to get the platform into a healthy utilization and rate environment. Its actually other eRSDL holders pulling out stables as soon as they appear against their supply that’s dissuading new entrants. If you are being held hostage, its through folks taking advantage of settings that should not have been in place from jump.

I would be skeptical of us also, and we hope to re-earn your trust if we lost it.

You are not disregarded. That is why we set up a forum to ideate options.

-howard

2 Likes

I need someone at Unfederal to help me. I staked my ERSDL. Connected my Coinbase Wallet to the Dapp, then I disconnected the wallet from the Dapp and the funds never returned to my wallet.

I am unable to locate the funds.

Ironically, when I reconnected the same wallet some funds appear, but it is substantially less tokens then what I originally had.

Can someone help me troubleshoot this issue? I have spoken to Coinbase multiple times and they are saying that Unfederal has to provide assistance.

My email is matt@priorityjustice.com. I have emailed Unfederal about the issue as well.

“It is starting to feel intentional”

1 Like