Wonderland Redemption II
Preliminarily, this proposal was written in the same period that the Quarterly Redemption proposal was posted by deal4412. I believe that if nothing else, this proposal demonstrates that the redemption proposals were precipitated by similar circumstances and this offers some constructive additions in terms of making the accounting process and voting process clearer.
As our proposals are similar, if we go to RFC stage, it would be excellent if the mods merge the proposals at that point by presenting voters the following voting options:
- No to Redemption
- Yes to Carrying out a single Redemption
- Yes to Carrying out Quarterly Redemptions. The first redemption to start immediately following this vote passing, and subsequent redemption opportunities to occur at 3-month intervals from this first redemption’s end-date
In March, Wonderland had a transformative event, a Rage Quit proving to holders the backing wasn’t just a meme. It’s time to prove this is the case again.
A ragequit was implemented in the middle of March at a price of 33,000 MIM per wMEMO, and revenue share was implemented in April. In late April (about April 26th), Skyhopper was elected treasury manager and has struggled to smoothly manage the treasury. Dani has rarely been around outside of a single AMA.
Currently the treasury value is about 215-220 million USD in value, down from about 260 million at the start of Skyhopper’s term, and further has about 50-60 million USD value in BSGG. The ragequit proposal was made so that investors at the time who wanted to quit at that point was given an opportunity to do so. Those who continued were hopeful that Wonderland can continue as an ongoing protocol and would look at the revival of the DAO (“comeback” according to The Professor).
However, this has been far from the case. Rather, some salient point must be discussed particular to Wonderland:
- Most importantly is the value transition of Convex gauge votes that Wonderland makes with CVX tokens for the MIM-3CRV pool. This is clearly done for the benefit for the Abra protocol. These votes have a market value of hundreds of thousands of dollars, which there has been no clear value compensation plan from Abra – and even if there is a benefit planned by Dani, Skyhopper has had no say in it. In the meantime CVX value has tanked as the broader markets have dropped.
- Risks taken during the UST/Luna debacle on UST. It remains a grey area at least on the motivation of taking on the risk, versus the reward gained. Dani utilized 60 million dollars of the treasury in an action which had a 100% chance of benefitting Abra, and a questionable chance of benefitting Wonderland – in the end we know 9 million was lost despite Skyhopper scrambling to sell the UST away after being put in the situation by Dani. Even in the best case scenario, Dani put Wonderland at risk and we have no way of knowing if he was unintentionally biased toward liquidating loans on Abra, causing him to misjudge the risk of UST’s complete depeg (a risk which Dani himself, as well as SkyH have repeatedly warned was too great for Wonderland to continue holding a position in the UST degenbox).
- Dani has a clear vision for Abra but the vision for Wonderland seems to have fallen to the wayside. If these value-destructive or non-compensation related activities continue; the risk adjusted return of Wonderland is probably negative.
More broadly, outside of the disappointing actions by Wonderland management, there are other considerations regarding the broader markets and environment which raise risks dramatically for Wonderland and should give wMEMO holders reason to reconsider their investment:
- Regulatory scrutiny over “backed” tokens or “stable” coins, which likely will fall under the same category. This concern is materially heightened by the huge value destruction caused by Do Kwon and the Luna/Terra USD complex. With hundreds of thousands of people losing life savings, politicians and representatives are going to have to do the politically popular thing which is to prevent any similar collapse in the future. Will Wonderland be able to continue again, as an ongoing concern under changes in regulations? Regulations may create a significant pressure to unwind positions and end the DAO from both a DAO treasury and individual holder perspective, especially considering who makes up the multisig and the conflicts of interest that Dani can objectively be seen as having, even if he doesn’t believe this to be true.
- Market conditions: yield farming and VC opportunities have shrunk considerably as of the end of May – with continued pressure on risk-taking as most professional firms have been shifting to cash protection (hoarding). Such conditions may not change for months. The viability of Wonderland as a distinct entity has dropped significantly, by no means a single factor – but a multitude of them. There needs to be strategic alternatives. The first of these actions should be a second RQ, to allow holders to re-evaluate their investment goals in a new investment environment.
Ragequit 2.0 (“RQ2”) Overview:
I propose that a ragequit 2.0 will be fair to all parties. A second chance has been given to Wonderland (over a reasonable timespan of 2-3 months) to see how we can adapt post “Sifugate”. Risks in operating and investing conditions have also significantly changed over the past month. This will give people that want to exchange wMEMO for backing a chance to do so and let those that want to continue retain even greater value in their treasury.
Assuming this proposal can pass the RFC and into WIP, two votes would be taken on snapshot.org.
On a determined block number, WMEMO holders will vote on whether to:
A. Disgree to redemption.
B. Agree to one redemption.
C*. Agree to quarterly redemptions, with the first redemption starting now and subsequent redemptions occurring at 3-month intervals after (this option was added to bring this proposal in parallel with Deal4412’s proposal)
If either redemption option passes then the addresses that voted Option B or C are allowed to vote to whitelist their address in the whitelist vote. Only the wMEMO in those addresses on the determined block number from Step 1 are eligible to be RQ, at the same quantity of wMEMO they held during that block number.
This will follow the same process as RQ1 thereafter with one modification:
A. Whitelist my address
B. Don’t whitelist my address
For the sake of fairness, wMEMO holders who are uninterested in the longer term success of Wonderland and its investments are not to benefit from revenue share for the period of the votes. To enforce this, in the time between the first vote on RQ2.0 going up, and conclusion of the second vote on whitelisting, there will be multiple snapshots carried out at random times. Only holders of wMEMO not staked in the revenue share farm in this period will be able to whitelist for redemption (this is in conjunction with the earlier stipulation that one must also vote yes on the redemption).
This creates a period of at least 14 days of elevated revenue share APY for those more aligned with the investments of Wonderland, given that there are two back-to-back votes and each vote takes 7 days at minimum.
RQ2 Exchange Assets:
Once determined, the treasury will be prepared for the redemption. The RQ2 Exchange Assets will be proportional slice of the portfolio including:
Stablecoins (currently MIM, USDT, USDC, YUSD, DAI) – we would ask the TM, Skyhopper to swap back to say USDC and MIM only on Avax, so that these two can be distributed.
Non-Stablecoins (WBTC, WETH, and Wrapped MATIC) – we would ask again for these to go to Avax Wrapped assets.
BSGG – all vested BSGG (also this can be into a staking/farming contract – and RQ’ers can get a wMEMO voucher for staking).
Convex – Staked CVX will be priced at a 30% discount and cash will be portioned out for this amount in MIM/USDC.
Node-staked Avax, Staked Spell tokens, Ice Tokens, Cross the Ages, and Unvested BSGG can remain with WL, and RQ’ers will NOT have this as part of the exchange assets for wMEMO. This will increase the backing per wMEMO for those that choose to stay.
After RQ, Wonderland may proceed per Dani’s vision or any future agenda set by the management. By allowing those who want to leave to leave, Wonderland can choose to align itself with third parties like Abra in the future. With the community aligned much better with the Abra community, value-positive things can get done and there would be a stronger attitude of cooperation. Through such cooperation it’s possible that Wonderland can survive and build together during the winter, and then come out in the spring stronger and in another form. We can say that Frogs may fade, but never die!
- There are at least two good reasons to give wMEMO holders a chance at redemption, including unsatisfactory management decisions and a dramatic-change in the direction of the market
- Redemption should increase backing per wMEMO and revenue share APR for those who stay, and also offer a fair exit to those who choose to invest elsewhere. If quarterly redemptions are supported, the price of wMEMO will also more closely and automatically track the backing of wMEMO.
- Redemption should go to a vote
- Redemption should not go to a vote