As many have stated before, currently whales (and others) are able to manipulate the price of wMEMO into a near constant downtrend. If you’re not familiar with the explanation it goes like this: Since the backing price is a known figure that the DAO is forced to buy back at, whales are able to sell on every pump which crashes the price to backing price. The whales scoop up more at a low cost, then when the treasury is forced to buy back, the whales dump again on the price pump.
Dani has said that they set limit orders below backing for this reason and while this may help prevent some whales, most are willing to just wait on a 1 minute chart to see when the volume picks up then begin buying again.
This proposal is NOT to get rid of backing. This proposal is for merely hiding the backing price. Everyone now knows that the backing price will be honored and the backing will continue to exist and function as it does now, but by hiding the backing price it forces people to trade more speculatively.
Think of it this way - no one would buy a $1 bill if I tried to sell it for $2 because everyone knows what it’s worth. Now imagine I sell you an ancient Roman coin for $2. The price would rise and fall more naturally in trading because the inherent value of the coin has no consensus of value. Some may pay $2, others may pay $20,000. Remember, that something is only worth what the market will bear. Well right now, we’re telling the market what it should bear by displaying a backing price.
By obfuscating the backing price of wMEMO, it encourages more speculation of its market value, less manipulation of the backing price, less risk taking by borrowoooooors, and reduces downward selling pressure.
That is all and I thank you for your time.