A Letter to the Community - Sunsetting Pilgrim Protocol and Compensations

Summary

  • TIP concluded that TIP could not sustainably maintain Pilgrim Protocol.
  • Therefore, TIP figured out that sunsetting Pilgrim Protocol was the only decision for everyone’s interest.
  • To take responsibility, TIP decided to compensate (almost all) users’ losses with USDC for those who spent ETH to buy PIL. ETH/USD price set as of 3/15 ~ 3/23.
  • If you locked your NFTs with a market value for over a month, please fill out the form below. We will drop a little gift for you upon our next token launch.
  • Please delist and withdraw your NFTs on our web application with ETH and PIL that we sent you on 1 Apr.
  • For compensation and gifts, please submit your option by 19 Aug 2022. TIP will provide compensation by 26 Aug 2022.

Hi, Pilgrims. I’m Taem from Test in Prod. We designed, built, and launched Pilgrim Protocol. As you read in the title and summary, after a few months of iterations, the team concluded that we should not keep maintaining the protocol.

Therefore, we figured out that sunsetting the Pilgrim Protocol is the only way for everyone’s interest. To take responsibility, we will (almost) fully compensate PIL buyers with USDC who will be financially affected by our decision.

We are sincerely sorry for you. Because we asked you to use Pilgrim Protocol, maintained for less than three weeks, and saying that we are stopping the protocol. Also, for airdrop waiters, we are sorry for you because this may not be the announcement that you’ve been waiting for.

In this letter, I will explain why we decided to sunset Pilgrim, how we will compensate for the losses, and, you might not be interested, the next step for TIP.

It’s kinda sudden. What’s the rationale for this decision?

Frankly speaking, we figured out that running a Defi protocol is not the best thing we can do, and we don’t think it’s beneficial for everyone’s interest.

We proposed pausing the protocol on 1 Apr to fix the foundational problem. The biggest foundational problem was that the use case of the Pilgrim Protocol was a bit vague.

However, although we diligently explored use cases, we couldn’t develop clear use cases. Rather, fundamental problems with the blockchain started to appear. Especially the infrastructure.

We figured out that it is impossible to make a successful project unless we are genuinely interested in it, good at it, and sure of what we are doing. And infrastructure was the field we were genuinely interested in because of our backgrounds.

We had to think very seriously about if we should keep maintaining Pilgrim. Since Pilgrim is a financial product that deals with people’s liquidity, it must work out. We weren’t sure if we could work something out that we were not genuinely drowned in.

Therefore, we concluded that wrapping up the protocol and taking responsible measures are the best decisions for everyone’s interests.

Why did it take so long to announce?

In short, we needed some time to deliver the best decision. We also had many things to fix both internally and externally.

After we decided to wrap up the protocol, we were thinking of building the next product quickly, swap PIL tokens to the new one, and onboarding current Pilgrim users. To not make the same mistake, we had to carefully validate if our new product makes sense enough to persuade Pilgrim users. The validation process included user interviews, building MVP, and onboarding a handful of users.

We had a lot of iterations in the short term. For example, adding a loan feature upon Pilgrim Protocol, a perpetual protocol for NFT collections, Defi strategy curation mobile app, etc.

After all those iterations, we finalized an item. However, the same mistake will likely happen if we rush to create another product and token, which will be bad for both users’ and TIP’s interests.

Therefore, the time has passed with the above iterations and recently concluded that swapping tokens for the new one is not doable.

What is the plan for sunsetting Pilgrim?

We should resolve four questions for the successful sunset.

  • What about NFTs listed on Pilgrim?
  • What about the Pilgrim code?
  • What is the plan to compensate PIL buyers?
  • Are there any gifts for the true believers?
  • What about the website?

What about my NFTs listed on Pilgrim?

Please delist and withdraw your NFT on our web application with ETH and PIL that we sent you on 1 Apr. We sent you enough tokens for delisting.

If you have trouble withdrawing your NFTs, please tell us. We will provide a guide for you.

What about the Pilgrim code?

We hope someone takes the Pilgrim code and builds some great products.

We opened the code on Github. The license is under GNU Lesser General Public License v3.0. I hope you have fun with the code. It’s here.

What is the plan to compensate PIL buyers?

We prepared compensation to recover the financial loss affected by our decision. Therefore, we decided to compensate users who bought PIL tokens with ETH at Uniswap. Because -

  • People who paid ETH to buy PIL tokens are the ones who are financially affected by our decision.
  • Uniswap was the only place users could buy PIL tokens, and ETH was only trading pairs with PIL except for xPIL.

For each wallet address that bought PIL at Uniswap, TIP will compensate the financial loss of buying PIL tokens by the following formula.

(ETH Amount Used To Buy PIL at Uniswap - ETH Profit By Selling PIL at Uniswap) * Average ETH/USD Price of 3/15 ~ 3/23 (2873.7)

We set ETH/USD price as of 3/15 ~ 3/23 since the price of ETH/USD has dropped a lot. I hope it helps you in this bear market :slight_smile:

Example 1: If you bought 10000 PIL with 0.2 ETH and sold 10000 PIL at 0.1 ETH, we will compensate you 287.37 USDC. Explanation: (0.2 ETH - 0.1 ETH) * 2873.7 USD = 287.37 USD.

Example 2: If you bought 10000 PIL with 0.3 ETH and held it until now. We will compensate you 862.11 USDC. Explanation: 0.3 ETH * 2873.7 USD = 862.11 USD.

Example 3: If you bought 10000 PIL with 0.3 ETH and sold 10000 PIL at 0.4 ETH, you won’t be compensated. There is no financial loss in this case.

You have two options to get compensation.

Option 1 - USDC

If you choose option 1, you will receive the calculated amount with the above equation in USDC.

Option 2 - TIP’s new project token

If you choose option 2, you will receive 30% more amount than option 1 in TIP’s new project’s token after it launches. The swap ratio will be LBP or the public token sale price.

We added this option because there was some demand who wanted to bet on TIP’s projects. However, be careful when you choose this option.

Because -

  • The token launch could take a long time, like a year or two. We are planning to launch the product first and launch the token later.
  • Since we should double heads down for the successful product, you might not receive updates much.

If you like us and can hold for a long time, I think it’s worth trying.

Please read this instruction to submit your option by 19 Aug 2022. The guide is here. TIP will provide compensation by 26 Aug 2022.

Find your wallet address here if you are applicable. This sheet contains the compensation amount.

Are there any gifts for the true believers?

First of all, sorry for those who truly believed us. We appreciate your efforts and time put into the community and using the protocol.

Therefore, we would like to give gifts to true believers. Please submit the following form if you -

  • locked your NFTs over 0.001 ETH worth for more than a month.
  • received a diplomat or artist role on Discord.

You will receive an NFT. It will allow you to claim a small airdrop when we launch the next token. Please note that we will deploy a contract that you can claim your NFT and notify Twitter if entries are over 500.

Please be informed that it will take time for the launch as stated above.

The form is here. Please submit your option by 19 Aug 2022. TIP will provide NFTs or deploy the contract to claim NFT by 26 Aug 2022.

What about the website?

We will keep the web application open until this year. Though we close the website, you can still withdraw your NFT by executing the contract directly.

What is the next step for TIP?

While we had iterations for the next step, we figured out that making an impactful web3 product was very hard. It’s not about the product-market fit but the lack of infra. Even though you make an impact and attract many people, there is no infrastructure that can handle those people. Therefore, current web3 products sacrifice either decentralization, feature set, or UX. But, those are too important factors to sacrifice. We saw a huge problem here.

Luckily, our expertise is designing a system that handles millions of traffic and operating it since we all have experience in handling huge real-time traffic. We think it would be beneficial for the web3 community if we design and operate resilient systems for web3.

Therefore, our next mission is to provide a resilient infra that compromises nothing to enterprise-level builders and onboard millions of users to web3.

We hope to announce what we are building publicly, but we are not ready for the public announcement yet. We will happily make an announcement when we are ready.

Keywords are L2, enterprise, mass adoption, and infra. We are on our way to onboarding the first powerful use case and discussing its adoption with a few big companies.

It will be our long-term project. We are planning for at least five years. I personally think that it’s a problem worth solving for such a long time and tech/market timing makes sense.

Sorry, Pilgrims. We will do better next time.

Pilgrims, I know this is not the announcement you’ve waited for; I’m sorry for disappointing you. Everyone in the community wished for the protocol to make it. We are also disappointed because our blood and sweat for months couldn’t see the light.

I know everyone here would be disappointed with the sunset; I hope you understand that it’s best for everyone. I know it’s a very hard favor, but a responsible decision should be made since Pilgrim is a financial product.

We learned a lot by launching and operating the protocol. Taking a lesson from this, I hope to meet you all with a better product in the future.

It was a pleasure to build with you all.

Thanks,
Taem

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