19 January 2022
Ownership Period for New wMEMO Investors
It has come to the attention of a few community members such as Bertoo1337 and Smoothfully that there is a way we can prevent future cascading liquidations and less volatility of wMEMO.
New investors since the start of this project have been able to buy as much wMEMO as they can afford then borrow against all of it to get more token quantity so they claim more rebase rewards. The problem is that these “investors” do not really know the consequences or how borrowing works and are getting liquidated at high prices and setting their position health really low so they can maximize the amount of MIMs they can receive and as we saw on Monday, when the price plummeted, everyone was getting liquidated and are complaining to get their money back when it was just lack of education so here is the solution to somewhat prevent this from happening so often.
The Wonderland protocol and Abracadabra should prevent wMEMO from being borrowed against for at least 1-3 months after purchasing/wrapping.
This will prevent short-term investors from going (9,9) and getting liquidated at the next small sell-off wave and consequently lead to a downward cascade. This will improve price and also increase stability since dilution through minting is already taken care of. This also will attract more long-term investors because people will not be able to make quick money off the project anymore without knowing its utility and these long-term investors will help with the growth of the project, knowing they are not selling their bags.
Since this is the brain-child of me as well, im totally behind this change. it has to be done, otherwise we won’t escape that spiral
I definitely think 3 month hold times also with limits as to how much exposure. 3 months you can loan 25-30%, 6 months 50-60%, 9 months 85-90 percent
I was just giving a range, the period can be determined later.
sorry, don’t get me wrong but I think there is no problem with this borrow/loan/leverage position at all.
the problem lies in the people doing it without any knowledge of what they are doing!
In a free market, this should be allowed!
The idea is to be “free” to do what you want with your money… by doing what you are proposing, you will be removing that freedom from everybody investing in wonderland.
IF you don’t want this kind of stuff to happen to you (be liquidated) simply don’t do it.
IF you still think is a good idea to go ahead and do (9,9) then make sure you know what you getting yourself into, be ready to take the risk (and the rewards).
I understand that you want to protect wonderland with this measure, but again, wonderland and frog nation is all about “freedom”…
Freedom is great, and there would be Freedom after a year no more limits the idea is to gain trust back and make this more than a dump and pump. A person can also do what they want as long as they pay the penalty.
Freedom is great and that’s how it should be!
WHY does anyone have to wait in order to invest their money? (this sounds like, bye-bye freedom to me).
ps: this is just a topic because things went wrong for many of us. learn with mistakes and carry on
How, they can do whatever they want with it besides hurting other investors?
some of them might not know what they are doing… on the other hand some are just greedy and believe the rabbithole isn’t as deep as they think. they forget about it for just 1 day, are in (9,9) with huge positions and wonder what happened when their wMEMO is gone and the price plummeted 20%. its not just ignorance or unsuspectingness…
Exactly, what people need is financial education not investment barriers.
so you want the inexperienced to drag the DAO into the abyss? not really my cup of tea to be honest
people who lost it got more hurt than the investors and it’s like that in any market… some win some lose.
I’m sure the majority of people that lost this time will think twice before they do it again.
the problem is not the borrow or the amount you can borrow…
the problem is doing it without knowledge
But this will prevent it from happening again
of course not!
I wish we all go up!
“The inexperienced” hopefully will learn a lesson with this…
I don’t think it stops anything from happening and again, it’s an investment barrier.
someone more knowledgeable in finance than I could explain it better I’m sure
i’d consider myself an “investor” since i dont have any ambitions to sell anytime soon… i didnt borrow a single MIM even though i know the risks and potential rewards very well. But being down like 80% (rebases included) even though im holding since September is a very bitter pill to swallow. Dilution of TIME is stopped, but blind rabbits going for 9,9’s ruin the project, triggering FOMO in the minds of people that dont have diamond hands - thus: adding to the spiral we are in. All things considered this scares off potential investors, which would be needed to keep things going.
I’m with you, I have been holding since I got here at beginning of December… I got $TIME at a very high price compared to now but investing (in anything) is risky and I took my chances when I got in.
I’m not happy with it, of course, I’m not! but that doesn’t mean we need to place barriers on others that may (or not) know what they doing with borrowed money.
Same happens with forex and stock markets.
Most serious sites at least got kind of a Quiz goin which you have to complete in time and 100% correct to be able to use leverage. Other sites allow for leverage by default but limit the percentage of colateral from your total funds, increasing as you gain experience. At least i’d wish for something like that…
the Quiz sounds like a good idea!
BUT DEFINITELY, people need more education about it!
@Bertoo1337 - My suggestion would be for $TIME to partner with Abracadabra on this proposal in their forum - RFC - Abracadabra Community-Focused Liquidation Mechanism - [RFC] Requests For Comment - Abracadabra Forum
TL:DR - Kuji has put forth a proposal to Abracadabra around building their own bots to front-run the free market liquidators. For the portion of liquidations related to TIME holders, we should look to bring those (if not a percentage) back to our treasury to mitigate huge price loss action.
Have a read and let me know your thoughts.