Sorry for the delays folks! Here is the recap for AMA #2
We are prepared for the bear market to aquire assets, been selling Avax, Eth, wBTC before and are ready for buying the dip.
Feeling that it is a good idea to start engagement of the treasury more directionally, as the assets become cheaper it becomes relatively good to look into it. At the end of the day we need to look at sort of an average price for wMemo and I put that target at around $110k per wMemo and my target is at least reach that plus profit by the end of the year. You need to have an idea of which price point you want to arrive at and this is a 2x, 2.5x, which with the right directionality, the right market conditions, and smart management is achievable.
Thought a lot about what to buy. World doesn’t look good. Feels like confidence in stablecoins and defi has been dropping. UST went really bad and nobody knows what’s safe anymore.
There are certain commodities, for example gold, that are interesting, I feel that like the is a lot of uncertainty and if you can’t hold stablecoins you might want to hold gold at this point in time. And I feel like this could be an interesting option and eh to that we have prepared some time ago and never was the right time to launch it with abracadabra: MIG which I don’t actually know if it’s a good name at the moment with the war happening but basically was Magic Internet Gold and that is launching in the next few days. (more info will be in forum)
I want to go back into the mentality of non stop delivering, non stop giving giving giving hammering hammering hammering and it needs to be like that. There is no other option. When everybody is sleeping we need to be hammering like when everybody is awake we need to be hammering there shouldn’t be like any case we are not doing 110% out of the capabilities that we have. Because in terms of ideas, using stuff, building stuff, using the software that we have, the development that we have done, and all of that like the possibilities are endless.
Lots of stuff that has been done but is not out there yet. So we need to take them out and get back into this mentality of over delivering instead of under delivering.
I feel like Wonderland is kind of the same, I’ve been under delivering in the recent months and I want to move into over delivering again. In that sense we have the liquid staking that is coming. I have received a video two days ago of the whole thing working on Testnet, so I’m very very happy about that. I don’t want to release it yet, but it’s right there - so I think it’s part of our expertise.
I’m a builder. The maximum value that I can bring is in products. So that’s also something that I wish to discuss with the community. How do we also use part of the treasury that we have to build products, rather than just invest. What is the multiplier if we build things on top of Wonderland that generate revenue over the course of time. It might be a good idea to start doing that. We find ourselves with a very large treasury at the end of the day, that has not been impacted by this downturn much. We were mostly in cash positions and we are capable of doing investments, buying distressed assets and things that have hyper-traction directionality, but also we can build. Which is always the right attitude during the bear market in my opinion. Build build build.
Another thing is - I have been pushing a lot about an Abra merger and I would like to give a little bit of context.
I call it merger but it doesn’t have to be a merger. I’m very open to what can be done.
There is a certain amount of money, that if given to Abracadabra as a product, as a protocol - it would really help Abracadabra to shine and stand out from the crowd.
Abra has never raised money, like some other protocols - but those other protocols do not have better products than us.
Ways a merger could be done:
We just merge, which means it’s one token to rule them all, which I think is super cool and instantly gets all the token holders and we merge the protocols, it has a treasury, it has the value of abra and is a whole new entity. An entity that still has the VC investments, the TM, everything just like now but in addition has all the abracadabra products and the future of abracadabra. So this is option number one. And everything continues as it is, but with focus on using part of the treasury to really improve the value of the underlying token by making it gain directionality. Possible to have treasury generated revenue exclusively shared to Wonderland investors for a time frame, like a year or so, as to honor current investment revenue promises from Wonderland in this scenario. Sspell preferred token (auto compounding)
We come up with a number, the number is what we are willing or interested in raising for all the things we want to make, I need to make a number, based on all the goals we have and what we think to do and we propose a deal to purchase that large amount of spell exclusively for wonderland to hold.
We just don’t do it. Like nobody wants to do it, not interested.
Go to spell or rage quit and take your money back because the experiment is over.
These are the options that I see. I think the best ones are the first and the second, but I’m open to everything. Ping me on discord, have open conversation, have an idea, more meaningful conversation around it. I don’t have all the answers all the time, many times I just look and lurk in your things and I pick up ideas from you and I try to implement them so I think that this is very important.
Lets talk about the Abra business model
Record volumes on curve, the most important part of the protocol, which is the liquidation mechanism in my opinion, is working like a breeze, the collateralization right now good, we have moved away from UST and that has been a good call so risk management did a good job, and has matured into a stage in which it should aim for the next target. In the case of Abra, it is now 3rd protocol able to lock crvs on curve with mcrv, big win, basically own a part of curve which could be a very good idea for investing money and a mission for a very long time. For Abra to be able to grow it requires a certain amount of liquidity to create profit.
We mint MIM (Magic Internet Money), which is a stable coin, which value is minted at $1. So it’s a debt, it represents debt. So, someone comes to Abracadabra, wants to borrow money, dollars in this case, so the protocol gives you MIM at the price of $1, always. So if MIM goes up or down in value your debt is always denominated in dollars, so you always need to repay your debt in dollars. If the coin on curve depegs, for example slightly for example - 50 points - there is an interest for people to repay their debt. Because they buy the MIM cheaper than the dollar, they have an arbitrage, so this system maintains the peg and the liquidity to basically always be collateralized.
MIM is always overcollateralized in a sense, because the amount of collateral that is used to mint MIM is always bigger than the value in dollar. If it’s equal, or lower there is a liquidation ongoing, so the asset that mints the MIM goes out and gets sold and what happens is that the MIM gets bought and send back to the protocol. So this system maintains the peg.
In the recent months we have had a lot of movement of money and one of the biggest critics that I had is that our interest rates are fixed, so there needs to be a depeg sometimes for someone to want to repay their debt, especially for specific cauldrons or markets, in which the borrowing fees are very low, or almost at zero. So, to be able to fix that we are going to add the strategy of bento box (going through governance, coming in the next weeks), which is the layer in which the assets are deposited and can create a fee charge on top of the asset that is deposited. So the old markets, the current markets go from being a fixed market to a dynamic market, which I think is a very big improvement on the stability of the protocol. It’s huge. This also allows us to think a little bit more about business.
But the reality is that with the capital, like spell has no emissions anymore, has no more down pressure, it has only revenue to be generated and we can lock now the crv´s we can literally buy the crv at a discount, we are worth more than convex, just by default. And we actually use those emissions for ourselves, we have so many products to be able to do and we don´t need to just to buy curve. Right now curve is a discount, compared to what it was before, so it might go into even more discount so we can really own a big chunk of the protocol just for the emission side forever and still have 200+ mm dollars for making other stuff.
Like do a budget and ok lets say we are going to use 5mm dollars hiring 5 new devs, getting an office, getting 5 people for business development, rebranding everything with the best agency in the world and make everything look fucking insane. Give a new light for the whole protocol and really manage it like it´s an apple instead of being like the restaurant “Peppina Aroma” like I am. Because in the end I`m guilty of this. Like I have good ideas, the pizza is fucking good - but maybe it´s time to build a McDonalds rather than the Pizzeria of the block. Like that´s the kind of aims in life and I´m aiming a little bit bigger now, in life. After all these months of really thinking what I want - this is really what I would love the community to support me doing, because this is what I want to dedicate my life to do. And this is my opportunity to leave a mark and really build something big. And I don´t want to loose it. Like, I really want to do it. And that´s why we are doing these AMA’s and stuff. And why I am here.
It’s been developing for a while. The real world market is made of non-fungible assets that money can be borrowed against, specifically like real estate, yachts, airplanes, cars etc - all these things are all non-fungible and the interesting part is: how do you scale a business on the blockchain to be able to interact in the real world?
Regulation and Security Tokens - every NFT can represent a real world asset and it is a security in a way.
High demand to earn yield without the need to KYC (bank vs defi)
System is legal in general, but maintain this privacy feature of being able to lend money against this assets without needing to KYC.
Achievable with a specific kind of auction, because the only time when borrower and lender should meet is when there is a liquidation. So if the person is not paying, then, theoretically the lender should claim such asset and liquidate it and get his money back. But there is also the problem, also on the global market - like if I´m lending money against real estate in Switzerland and I live in Singapore there is a lot of logistics and issues to be able to claim such assets. The auction system works around that, the liquidator and liquidated don´t interact with each other and you still get your money back this way. To my knowledge, this has never been implemented before.
A lot of potential on the long term (next couple of years).
Scaling and legal structure, why expanding is needed. Been looking into the legal structure for the past couple of weeks for both wonderland and abracadabra and how to make all this happen and it is possible. Real corporate way, physical offices, the opposite of the anon way, which has been the degen way, yes- why not? Like, we are still degen at the heart, but I would love to be able to make our holders know that there is something there, like it´s not just a bunch of anon people doing code and doing cool stuff, but more like: come over, we are here, we are doing stuff and we have meetings and we have customers and we can scale on a business to business level. We can invite the bank, we can invite the real estate developer.
No more “I know that guy who knows that guy and go to a meet for a coffee“ as I think this thing doesn´t scale. So we need to scale to a more traditional business and get out of this mentality of just crypto and we have developed this platform for nfts that can tokenize real world assets. We can really expand into making very interesting business models in the real world we can really be big.
Go out there and show the world, our insane tech and take over. Do it better.
Several ways to do this
Multiple variables: Proposal written out with details is being written.
Special Note about the concerns with UST
I want to address the UST thing btw - like that is something the community wanted to know. So - just to make sure I make it very clear. Two days before I made the purchase of UST - I take all the blame, like I´m not in the blame fucking game, - I made the call to buy it, so… So two days before, Skyhopper come to me and said like I want to buy 25mm UST and I want to put it on anchor.
And I said I don´t know, I don´t feel very comfortable about it but if that is what you want - whatever.
So then, he was asleep and all the thing was unfolding and there is like a 5%+ fee, which is not bad, into liquidation on abracadabra and I was seeing other people doing liquidations, because like, we did like 50mm of liquidation but there has been liquidated like 700mm dollars worth, so lets put things in context and I was like yeah, I think we can get this UST for Skyhopper, that he wanted and if we buy them for cheaper then whatever. We still have the margin of the 5% and when he comes online we can either sell it or we can decide to hold it or we can do whatever we want with it - but we bought it much cheaper than anybody else.
So then, I bought it and he came online and we said okay, we are going to sell this. What do you think, are we going to sell it, now it´s in 92, which is profit - and we were together in a call and we decided to sell about 35 or 40% of the UST that we bought. Then we keep some of it. Then yeah he went to sleep and I wrote to him like „maybe we should sell more“ but he was sleeping, like it happens, we are all humans and then it went back collapsing and it was kind of like - pain in the ass but that´s kind of the situation- but we would have lost much more money if we had the UST from the beginning because, you know - it was for sure a net loss. We had the opportunity to make a good trade but unfortunately it didn´t come all as intended. We have lost a little bit of money, not too much. Like in general terms but yeah. It´s sad but that´s what it is.
The opportunity was worth it. That´s what I wanted to explain. And all the fud and everything like whatever like other treasury manager like I´m also Co-managing this treasury. It´s not just like I put my input and my ideas. Of course the last vote should go to the treasury manager but I mean - I expected to have some influence around here. Like I´m not the last of the chariot, like I´m not the last one that came to Wonderland and pretends to be to have a little bit of voice.