[LIP 16] Proposal for Wind-Down and Redemption

In reference to the wind-down and redemption proposal outlined under LIP-15, the Lodestar Protocol team is submitting this proposal to formally execute the process of shutting down protocol operations and returning value to token holders. This proposal covers the concrete steps the team will take to freeze functionality, consolidate treasury assets, and enable redemptions in an orderly and transparent manner.

As specified in LIP-15, all lending markets will be converted to repay-and-withdraw only, emissions will be discontinued, protocol-owned LODE will be burned, and all remaining treasury assets will be consolidated under the Lodestar treasury for final accounting.

The protocol will then divest its holdings and convert all treasury assets into USDC for distribution. Based on a snapshot that has already been taken, token holders will be entitled to claim their share of the redemption pool proportionally to their LODE balances at the time of the snapshot.

Of the total treasury assets that are liquidated, 30% will be allocated to tax obligations, legal requirements, and administrative closure costs, with the remaining 70% forming the redemption pool available to LODE holders.

Holders included in the snapshot will be able to claim USDC at a rate to be determined by the final value of assets at the time of liquidation.

The redemption window will remain open until January 31, 2026. Upon expiration of the redemption window, the Lodestar team will take possession of any unclaimed USDC and complete the final wind-down steps, including sunsetting the front-end and concluding all operational responsibilities in accordance with the proposal.

The voting period will last for 3 days.