Use extra AIP-17 tokens to repay insurance premium

”When you make a mistake, there are only three things you should ever do about it: admit it, learn from it and don’t repeat it”

This proposal is self explanatory.

Via AIP-12 we decided to activate the insurance plan to repay lenders for the stkBNB hack.

Via AIP-17 we decided to reserve the extra tokens for future use.

The proposal is to use these reserves to repay the insurance plan we’ve activated for the stkBNB hack.

This proposal would be a yes/no vote.
The vote needs to reach a 50% quorum to be valid (either in terms of votes or people voting)

The outcome would be a short term sell pressure followed by an increase in the governance APY by 2X which will attract more people to lock and earn rewards.

We have been penalising our own investors for no reason for too long. Let’s set things straight


I support Gianni’s proposal in general. The low APY of the Governance vaults is hurting ALPACA’s utility. This is evident by the decline in number of tokens locked and average lock time.
However, I just want to mention that the tokens in question will cover only about a third of the debt and while they will significantly reduce the time to repay, the APY will not go 2x right away.
With this in mind, I think we should also consider using the leftover tokens from Liquidations and Early Withdrawal Fees to repay even larger part of the debt.


Great idea!!! Reward in gov will rise.

I don’t agree with this. Even if the Governance APY is going to increase we would be selling ALPACA at a very low price in my opinion. Also the funds could be used for other thing more important in the future instead of wasting them right now when we can wait to repay the bad debt.

Besides ALPACA locked has not decreased that much and I believe the solution to attract more capital is to make new partnership instead of wasting our money.


It’s a fair point, but also you could see it as a way to get those higher prices.

Your statement on amount locked is instead false and a pure cognitive bias. We used to have over 51% of supply locked at an average duration of 6 months+

Truth is that there’s no reason right now to lock as the APY is 50% down and unless solved will stay like this for another 6+ months.

So yes, we can save for the future and have another core feature of our platform half-dead OR we can act now and try to fix issues and propel us to a better state.

Sometimes you have to spend money to make money

P.s. The ideal vote would be to stop repaying, but i suppose we already got all the money from the insurance and so not viable

A vote to stop repayments is probably only going to hurt Alpaca’s reputation. But then again, what is reputation good for nowaways? Some people have said on TG: " Oh, you guys have such a good reputation, but wonder why the token is lagging behind…" It is basically the same as “Oh, he is such a nice guy (just not in love with him)!”
I think such a vote should still be on the menu, even if I know what some whales are going to vote/type in the memo field. Simply put, we need to find a solution that is faster than 9 months - this is ethernity in crypto. Even if we have to break some eggs to make an omelet. Waiting is not a good idea.

I think it’s a good idea to start considering $ALPACA token, it’s getting hurt at the moment due to the lack of sexiness in holding it. I understand selling extra token to repay debt right now is probably not optimal, but why not simply use these token to reward gov. vault stakers and increase it’s APY.

I don’t disagree with repaying the bad debt early, if the protocol can afford it and the method makes sense.

That being said, the timing of it would not be ideal. Perp is incentivized with $ALPACA which means additional sell pressure. There is no way to sell ~255K USDT worth of $ALPACA (~888k $ALPACA) on top of that without cratering the price.

Instead of selling $ALPACA directly on-chain or off-chain, could we finance the bad debt by selling time-locked $ALPACA at a small discount? Let’s say locked for 1 year at a discount equal to the current APY. I would take that deal.

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