Spell is still minting, and then burning excess, as the market demand cannot be guessed. Keeping the price steady. As long as the mints and newly created wMEMO is an option when demand increases. I say we burn as much as it makes sense, which should help the price recover for the Hodlrs.
I am in it for the long game but it is not comfortable right now. I had 70% health on my Abra leverage, now below 30%. I bought at the high, and have lost 90% of the value of my investment. Now the rebasing has cut that loss in halfā¦ but the rebasing isnāt keeping up with the bearishness of what happened.
Black swan sell off on OHM
This change to wMEMO before the community actually understood what is happening. Dani and them were solving a problem that was not a problem yet. Peering into the future.
Another proposal is Frog University. To take all the Dev Speak and translate into understandable English.
I think option 1, or 2, or a combination of both - I will leave that to Sifu to decide.
I go with option 2: Immediately burn all tokens (in wMemo) sold back to Wonderland due to liquidation below backing price. LetĀ“s decrease the supply in an effort to stabilize price
From Sao Paulo, Brazil. Love the project/idea and the team. LetĀ“s turn this around and make it happen. Count on me!
Complicated topic with no āone size fits allā answer. Decision to burn/not burn should be made based on the best economic outcome for all. Here is one potential scenario.
wMemo bought back by treasury in a liquidation scenario could become āavailableā for minting. The bonding discount is equal to the āprofitā generated by the treasury in buying wMemo below backing price minus costs and a profit share for treasury. This way, the wMemo gets recirculated back into the market and the treasury is able to recoup the capital plus a profit. The amount of profit share recieved by the treasury could result in a burn of equivalent amount of wMemo that already pre-existed in the treasury. Net - net, Treasury value stays the same but it results in more interest bearing token assets, and less wMemo supply (combats inflation).
Win-Win for all. Intermittent minting becomes available (similar to a āmim replenishā on abra), treasury generates a profit which is then burned. No change to treasury value and combats inflation.
On option 1: There is already zero dilution, since mints have been stopped. Simply not restarting mints keeps dilution at zero and caps wMEMO supply. Additionally, burning tokens in treasury has no effect on the backing per wMEMO, since those tokens are not included in the denominator and their value isnāt included in the numerator.
On option 2: Wonderland doesnāt hold liquidated wMEMO from abracadabra leverage, so I donāt understand whatās being proposed. If the idea is to remove those liquidated tokens from the LP and burn them, then there are only two ways to do this: withdraw an equivalent amount of LP (both wMEMO and MIM halves), thus eliminating some of the liquidity available, or buy from the LP on the market, thus depleting treasury-held MIM.
I agree to burn overall, but the schedule to burn is to be debated. I also like the idea proposed by @Syn here: Proposal to burn $wMemo tokens - #25 by Syn. Long term (3,3) holders should be rewarded for non-manipulating behavior.
Iām not sure that option 2 is the best overall, because I think we are reacting to the current state of the market. What if this buyback process only happens for the next couple month only, and the price of wMEMO goes back up all the way in response to the market going up? That means there will be burns only when the price goes below the backing price. If that doesnāt happen again in the future, then we lose out on future burns.
Option 4 seems too fast of a burn. Yes we benefit now, but I think itās just us reacting to the fast dip in price. Some people might need this quick burn, and then a good amount of people will sell and profit, then we are back to square 1 of burning the tokens again. It still hurts the long term (3,3) HODLers.
This is why option 1 makes more sense to me, but given that we discuss/debate the timeline in which the burn schedule is implemented. This is a more long term solution which doesnāt depend on the price action of wMEMO and overall increases value of the token.
Iām not well versed in financial markets, but this is how I understand it so far.
Considering that TIME can be considered out of the project:
min wMEMO price should be equal to MIM (TIME=MIM) times 4.5, times current index;
setting a minimum TIME/MIM price at $ 1,000;
buyback and burn should provide stability to this ratio and rebase mechanism.
So basically, price discovery shows that the current wMEMO intrinsic value is a little bit overvalued than its minimum price ($ 51.435 right now), plus backing wMEMO price is set over the minimum price, implying a sort of remunerations at every buyback.
Proposed solutions should be implemented in order to keep wMEMO price consistent with its intrinsic value and treasury proceeds distribution should be envisaged (both from liquidation and LPs), keeping in mind that the wMEMO price will be sustained by market demand and not from printing.
The more the platform will be able to sustain its intrinsic value as well as distribute profit to the stakeholder, the more demand will bring wMEMO price up.
Instead of burning, why not just redistribute the liquidated tokens to existing holders based on share? That does both - it punishes sellers and manipulators and rewards loyal holders while not affecting the treasury at all. Plus you get the added benefit of discouraging massive amounts of leverage.
It could be bec those seller or manipulator will buy back them at a lower prices and they sold at high which in turn create profit margin for themselves. The one who got liquidated lose their position and redistribute those fund back to them doesnāt really help since they will hold a lot share when they buy back at lower prices. B
That all I can understand if Iām wrong other can correct me. Frog Nation
We believe Burning will help hold value but has anyone ever proven that it will actually do that. In theory it should but if the price is backstopped by Treasury the floor is maintained. Burning will lower treasury value and token supply new price higher but could still go lower again and again. what am I missing?
A 10% sell tax would be good and this will also help reduce the speculators and bots from jumping in and out (and hopefully whale selling that set off liquidations). Frogs are investors in Wonderland, not speculators looking to hurt the DAO for a quick profit. The question is then, does the 10% tax get distributed to wMEMO holders (and how often) or does the sell tax go into the treasury to invest for future profits to be distributed to wMEMO holders?
No - Bad Idea You Tax this and you chase away investors. Why would I put money in Wonderland when Iām immediately down 10% I would find a Different investment.
