Liquidity

Yesterday, March 11, Kuailian launched the process to request the reimbursement of funds for those clients who want to leave.

In a very summarized way and without going into details of the process (it is not the purpose of this article), between March 11th and 21th, users will be able to request the settlement of their contracts, Kuailian will make an estimate of the amount to be received and if the user agrees and confirms that he wants to proceed with the settlement, those funds will be delivered.

The value to be received will be the result of applying the percentage of participation of each user to the value of the pool on the day the settlement is made.

The reasons for the controversy

Some users expected to receive the same amount in ETH as they contributed when purchasing their licenses, with the corresponding capital gain from the appreciation of the ETH.

However, Kuailian has not kept those ETH in the pool. Those ETH were transformed into tokens for staking.

What Kuailian will return to each user will be their percentage of participation in the pool. Therefore, the relevant thing is to analyze the value of the pool and the % of participation.

As for the value of the pool, there is no possible way to know if the current valuation (just over $ 90M) is correct or not. We do not know which tokens have composed it, how they have evolved, if any of the low liquidity tokens could have led to a significant erosion of the pool … any estimate that can be made is pure speculation. Therefore, I will not go into this point and assume that the data provided by Kuailian is correct.

Where I do believe that there are reasons for controversy is in the calculation of the percentage of participation.

Until recently, when a user acquired kuias, his participation percentage was calculated as the ratio of the ETH contributed by the user to the ETH contributed by the total number of users.

Since the appearance of the SPU, the calculation is the same but based on USDT, which has made the % participation of all users vary.

The big problem is that this change in the calculation method has been applied indiscriminately to all users, both those who have accepted the change from kuais to SPU and those who have not.

It does not matter that this change may result in a more balanced distribution of the pool. From my point of view it means an alteration of the rules of the game that Kuailian should not apply unilaterally. They should obtain the explicit consent of each of the users to apply this change, which for older users represents a very remarkable decrease in their % of pool participation.

The three possible scenarios

Given this situation, I understand that there are three possible scenarios:

1. Request settlement

This option involves the settlement of all the contracts and accepting the conditions under which Kualian calculates the amount to be reimbursed, which, with the current value of the pool, represents approximately 60% of the amount in USD initially disbursed for the purchase of the licenses. . This amount will be returned in ETH.

This is a guideline approach that can change depending on the value of the pool at any given time. Kuailian will notify each user the corresponding amount, from which the commissions associated to the change of tokens and transactions will be deducted.

Accepting the settlement implies, as specified by Kuailian, explicitly discard any other future claim.

It also means the elimination of the user account once the settlement process has finished.

2. Not to request settlement and initiate a claim process

Users who want to leave Kuailian but do not agree with the conditions applied for settlement and feel harmed will need to initiate a claim process outside the company.

There is a scenario that I do not contemplate, which would be to accept the settlement and also start a claim process, because as mentioned above, by accepting the settlement you are giving up that possibility.

3. Stay on Kuailian

Once the liquidation period is over, Kuailian will reassemble its staking technologies with the capital that has not been liquidated and will work again as it has been doing until now.

Each user must decide which of the three scenarios is most convenient for him.

Join Kuailian

If you want to join Kuailian, you can do it through this link.