I have been following the project for a long time. At first I did not believe in the prospects of the DAO because I could not imagine what was necessary to sustain this. Over time much has been slowly revealed and the current proposal to merge Abracadabra and Wonderland really clearly spells out the intentions of the future of these protocols. That being said, I feel that it will be a very negative historical landmark on the ecosystem to kill off wMEMO completely to form this merger. For this reason I believe the merger should be represented by an optional token staking contract. A user would burn their wMEMO to access this token at a premium as planned for spell, however the token itself would not be spell and therefore not impact it’s price directly. Not only this but if we can burn wMEMO, it’s holders will be rewarded. This new token staking contract would earn spell rewards similarly to how the farm on abracadabra does, but potentially at a higher rate due to this merger and to compensate for the staker’s risk on this merger. Meanwhile both wMEMO and spell stakers can stay put and decide if they want to take on the risk from this merger. Eventually if sentiment is high towards just completely merging the two(or three if this is approved) tokens into one, it should be done. I am personally hesitant to do it during the bear market because it will seem desperate to outsiders. I know many are down right now so I can understand wanting to get a premium and leave, but in general I think this is a bearish 0 sum scenario as Abracadabra already benefits off of wonderland and the merger would just increase tensions within the community, as I see it.
Please let me know what you think about this, I am looking forward to the future.
I think a lot needs to be added as background info surrounding the merger proposal but let me just add one important fact that all Wonderland investors (and I am one of them) need to be aware of:
To date, Spell stakers have yet to see a benefit from the fees the protocol generates. The payout mechanism (Merlin buyback) is structured so that most of the profit gets absorbed by arbitrage traders and bots. It issues more Spell per SSPELL but it has not translated into a value gain at all. Quite the opposite: the price decay of Spell far outpaced the additional Spell that stakers received.
I think it is an important point to remember. The last thing anybody needs is the feeling that Spell holders somehow got rich from all the Wonderland liquidations. That is simply not true.
Disclosure: I own wMEMO, Spell and sSpell.
100% I am not implying this, that is the exact type of additional criticism I am looking for in this discussion. Although the abracadabra ecosystem is confirmed to profit off of liquidations, it is not positively impacting spell holders. This is why I believe the merge will not look good in the long run, it looks irrational.
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