I propose to have a permanent exit option at 90% of the backing price, and burn the redeemed wMemo. It benefits everyone:
- Whales who bought well below backing price can still leave with a profit
- Holders will see the backing price constantly increase
- At the same time, everyone is discouraged to exit, since holders see their backing price increase
The backing price increases because, while the treasury decreases, the circulating supply decreases faster than the treasury. Simple example (not actual numbers):
- Total supply is 100 wMemo
- Treasury is 1000$
- Backing per wMemo is then 10$
- Holder of 20 wMemo (worth 200$) uses the exit option, gets 90% of the worth, which is 180$
- Total supply is now 80 wMemo, treasury is 820$
- Backing per wMemo is now 10.25$
If more people use the exit option, the backing price would increase even more.
Suppose 90% of holders (holding 90% of the supply of wMemo) want to leave and get their portion of the treasury. How would that affect the remaining holders? Again, example with fake numbers (calculations are approximate):
- Total supply is 100 wMemo
- Treasury is 1000$
- Backing per wMemo is then 10$
- Holder of 10 wMemo (worth 100$) leaves for 90$ → Treasury = 910$, supply = 90 wMemo, backing = 10,11$
- Holder of 10 wMemo (worth 101$) leaves for 91$ → Treasury = 819$, supply = 80 wMemo, backing = 10,23$
- Holder of 10 wMemo (worth 102$) leaves for 92$ → Treasury = 727$, supply = 70 wMemo, backing = 10,38$
- Holder of 10 wMemo (worth 104$) leaves for 94$ → Treasury = 633$, supply = 60 wMemo, backing = 10,55$
- Holder of 10 wMemo (worth 105$) leaves for 95$ → Treasury = 538$, supply = 50 wMemo, backing = 10,76$
- Holder of 10 wMemo (worth 108$) leaves for 97$ → Treasury = 441$, supply = 40 wMemo, backing = 11,02$
- Holder of 10 wMemo (worth 110$) leaves for 99$ → Treasury = 342$, supply = 30 wMemo, backing = 11,40$
- Holder of 10 wMemo (worth 114$) leaves for 103$ → Treasury = 239$, supply = 20 wMemo, backing = 11,95$
- Holder of 10 wMemo (worth 120$) leaves for 108$ → Treasury = 131$, supply = 10 wMemo, backing = 13,10$
As you can see, the last holders now own a larger portion of the treasury, even if the treasury got smaller. The real impact of individual exits would not be that big, even if 90% of the wMemo was sold, so the actual increase for holders would probably be around 10% in that case.
The percentage of the backing price offered for exits can be different, 80% would be more beneficial to holders.
Having this permanent option creates a soft price floor (it can go lower due to the value of backing assets decreasing).
- Exit option at 90% of the backing price
- Exit option at 85% of the backing price
- Exit option at 80% of the backing price
- No exit option
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