Last night was pretty traumatic for most of us. I think we can be in consensus in saying it was a liquidation cascade which brought the price down to the $800 range. At the start of abracadabra.money the amount you could borrow against was 30% and after a while it was increased to 75% due to the assumption that TIME/MEMO was not a volatile asset. As we have seen the past few weeks, TIME volatility is extremely high and it only takes a few whales to coordinate to crash the price over 50% in one day. Major assets don’t fall 50% in one day. This is why the borrow limit needs to be set back to 30% for an indefinite period and it can be slowly increased and set a maximum borrow limit of 50% for the foreseeable future.
Another proposal I would like to put forward is to disable leverage trading for any high ranking devs working on wonderland TIME, currently that being sifu and daniele. Imagine if you heard that Elon Musk was jacked to the tits in OTM Tesla calls expiring in 2 days on 10x leverage. I feel like having a major position of 12m advertised to the public can cause a lot of whale manipulation. If this proposal seems too much for sifu to consider then at least we must set a borrow limit of 5% for high ranking devs working on wonderland TIME
Strongly support this proposal. I think it’s also in abra’s best interest to see that their backed assets are sustainable.
So idk if we have power over the 30%. In a sense, I guess we do given the close tie to the team, but it would technically be an Abracadabra thing.
I think the dev leverage trading should be a whole different discussion. That said, I don’t really agree with limiting their ability to trade, but I understand what you mean.
And whats next? A certain FICO score to borrow? Show paystubs? Bank statements? This is defi - if someone wants to leverage to the tits, its on them.
Personally I think that Abracadabra community should solely decide over it since it is their protocol albeit there is an overlapping with Wonderland. Said this, although I shouldn’t have a say in it since I’m just into Wonderland I would be against it since it is not in line with the concept of decentralisation that DeFi is bringing, if I want some sort of regulation on the risk I’m taking I can alwayss go into TradFi.
Social credit for devs, welcome to China!!!
I think I might change the proposal to say “formally request that abra decrease borrowing….”
Exactly right that it is abras call but I think it’s right and if the community supported it, I would be surprised if Dani wouldn’t accommodate it.
Agree with the defi ethos and the ability to help the unbanked become banked. But if these projects are dying in the crib due to leverage, what will be the point.
How about this: request of abra (again, I think ultimately their call) leverage limits based upon the market cap of wonderland. As the market cap goes up, so can the leverage allowable. I don’t think the message is “don’t leverage”. I think the message is, “I don’t want it to endanger our project.”
Regulation and decentralization are not the same thing. Decentralization means governance is distributed among a broad community. Power is not consolidated into just a few hands.
Regulations or governance is absolutely necessary to ensure the health, growth, and prosperity of a project. Including projects in the Defi space.