There’s a growing concern among the investors regarding “sidestepping”. The 8-hour rebase interval can make timing the market much easier for day traders, thus increasing volatility in price, and a siphoning of market value from holding investors.
A swing trader can purchase 3-4 hours before a rebase (at the low) and then sell immediately after at the peak. The sell off that occurs after the rebase has become predictable and these traders can purchase again at the bottom and repeat the process. By selling and buying, they can accrue TIME even faster than compound interest.
A possible solution is to increase the frequency of rebases. By doing this, the rebase reward is significantly lower thus making it riskier and/or unprofitable for traders to take advantage of the window.
The new rebase value will be lower, but it will still produce the same APY that investors are accustomed to.
- No locks, or other manufactured punishments for these traders
- Rewards long-term holders
- Gives traders the freedom to continue to trade
- Stabilizes price
- Potential loss of trading fees that treasury gains through its LP pools