Summary

This proposal seeks to allow remaining ABI token holders to exit the Abachi DAO at a fair value, leaving the Abachi DAO intact for those who wish to remain. With the market price of ABI currently trading at nearly three times below its intrinsic book value, the proposer believes it is unfair for long-term holders to be forced to exit at a significant discount. This measure is proposed to provide a responsible exit pathway for those still invested, preserving fairness within the community as the project continues. Voting for this Proposal will start in 2 weeks, allowing sufficient time for ABI investors to read and discuss the proposal in the Abachi Discord. Current State Treasury holds approximately $1,130,000 in crypto assets $300,000 USDC is currently loaned to Luca+ Protocol owns roughly 335,000 ABI Circulating supply is therefore approximately 665,000 ABI Maximum supply is 1,000,000 ABI (fully vested, no pABI in circulation) Monthly expenditures: 20,000-30,000 USDC

Background

The idea for the bonding platform originated from ABIP:#16, proposed in September 2022, as a potential avenue for achieving product-market fit and generating sustainable revenue for Abachi DAO. Since then, over $500,000 has been allocated to develop this platform. However, after more than 2 years, the platform remains in an ‘Alpha’ stage, with limited clarity around its market adoption. In return, the ABI price against ETH has gone down by 75% since the migration and the treasury shrunk by $700,000. This prolonged development and associated costs have placed a strain on the DAO's treasury without yielding any returns. As a result, the project has not only failed to generate revenue but also continues to operate at a deficit, with monthly expenditures estimated at 20,000-30,000 USDC. This continual draw from the treasury decreases the intrinsic backing of each ABI token, impacting holders' value directly. Moreover, while ABI is currently trading significantly below its intrinsic value, the team has not supported the token price, even the fabled $1 floor has not been defended. This lack of price support has allowed the value of ABI to decline further and further, creating a situation where holders pay the cost of dwindling value & tokenprice while the team continues to receive compensation from the treasury. Given these circumstances, the proposer believes that providing a one-time fair exit is the most equitable approach for remaining holders who continue’d to hold.

Rationale

The proposer is convinced that a fair exit is the best solution, preventing further dilution of returns for those who have continued to hold, and allowing anyone who disagrees with the proposal to continue holding. While the proposer personally believes that there is no way to turn the tide and start generating profits that outweigh the costs, this proposal is not requesting a wind-down of Abachi DAO. The proposer fully recognizes that there may be different opinions among members who believe in continuing to hold and remain committed to the ‘status quo’. This proposal is intended simply to allow those who have believed and held on to exit at a fair value, as it feels punitive to have longest holders bear the deepest losses. Proposal Details 1. Fair Exit Mechanism Set up a smart contract allowing remaining ABI holders to redeem their tokens for treasury funds at a rate of approximately $2 per ABI, depending on market conditions The contract can be forked from a proven model to minimize development costs and streamline implementation

2. Treasury Swap Process Implement a straightforward treasury swap, allowing ABI holders to send in their tokens (or burn them) in exchange for a proportional amount of USDC from the treasury This direct swap reduces operational complexity and enables an efficient exit process for ABI holders

The proposer is open to other suggestions for a ‘fair exit mechanism’ in a more cost-effective manner like an OTC.

Eligibility

ABI held on both Ethereum and Arbitrum at the blocknumber of this proposal are considered eligible for the Fair Exit Mechanism.

Proposal Implementation Timeline

Within 1 month of ratification of this vote, the fair exit mechanism has been agreed upon, tested and implemented to the satisfactory of team and ABI holders. The option to swap ABI proportionally with the treasury shall be open for at least 3 months after the fair exit mechanism has been implemented as previously mentioned, adhering to the Eligibility criteria.

Voting Options

Vote Yes - Support this proposal to enable a fair exit for ABI holders. Vote No - Oppose this proposal.