sounds great… i like the idea a lot.would be a good alternative to minting if you’d be able to to buy “at-risk” colateral at a discount. and there would be way less negative price action.
good alternative
I don’t believe this is a possible solution to the leverage cascade issue. Sure, because of Dani and the devs behind abracadabra.money and wonderland.money being the same there is the possibility of limiting access to wMEMO leverage in the abracadabra protocol… however that would not stop people from doing it on other protocols offering leveraged borrowing or stop someone from creating a new protocol to do so. If there is demand for a service, someone will create it.
If we were somehow able to instead implement a function that stops people from borrowing against their wMEMO for 1-3 months after purchase/wrapping of memo, it would likely come with a whole other set of issues for the liquidity of wMEMO because we would have to limit the ability to trade the wMEMO for that period of time to ensure they are not borrowing against it. This would likely have effects on other protocols that allow interesting composability with wMEMO such as https://pendle.finance/ (splitting of ownership tokens and yield tokens to get access to one without the other). Unless of course, there is some way to code in the ability for the wMEMO to do everything BUT borrow against it. It seems unlikely, but who knows. I’m not a coder!
For me, the better solution is to find ways to make sure the leverage cascades don’t cause as much damage to the bags of people still holding.
Ii think a change like this makes the investment less interesting. I’d go elsewhere. Be careful not to make this a uncompetitive investment by applying rules and obstacles to investors. There are other choices. We should make this a easy investment to buy sell trade hold etc.
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