[RFC] - Quarterly Redemption Option for Holders

[RFC] - Quarterly Redemption Option for Holders

I support the following:

  • Yes to Redemption Option 1
  • Yes to Redemption Option 2
  • Yes to Redemption with Modification
  • No, I Do Not Support Redemption

0 voters

[RFC] - Quarterly Redemption Option for Holders


This proposal outlines the purpose and implementation of a quarterly redemption option for holders.

[DAO Discussion] - Quarterly Redemption Option for Holders [DAO Discussion] Quarterly Redemption Option for Holders


To provide a quarterly redemption option to enable holders to exit at either full backing or liquid backing (choice to be determined).

Provide a High Level Overview

A quarterly redemption allows holders to exit once every three months at the backing price–the treasury dollar amount associated “or backed” with each wMemo in circulation. They are essentially each wMemo token’s share of the assets in the treasury. This differs from the market price, which is the price wMEMO is trading at in the open market. When the market price of wMemo is below backing price, it is trading at a discount relative to its underlying or backed value. A quarterly redemption period allows users to exit at the backing price even when wMEMO is below the backing price.

The process may require a snapshot (if illiquid assets are used in the redemption process), followed by preparation of the assets for distribution to wMemo holders. This will be determined at a later point in the RFC process as we gain further input from holders.

Provide Low Level Details (to be completed)

For the purposes of refining this RFC, a few matters will need to be addressed:

1. Redemption Process

1. Snapshot (only needed if we use illiquid assets for redemption):

The day of the snapshot, a backing price will be calculated and presented to holders. Given the volatility of the underlying assets, the backing price may fluctuate from the time the snapshot is held to the time the redemption is distributed. A Holders Snapshot will be taken with a vote duration of 5 days each quarter (every 3 months). Voters who wish to redeem their wMemo for that quarter can vote Yes or No. The purpose of the vote will be to prepare the treasury if we decide to include illiquid assets in the redemption (see Option 1 below).

(Further details will be added on this process).

2. Two Redemption Options (One will be chosen for the WIP):

Option 1:* Redemption would be at liquid backing value + 25% of the remaining BSGG (excluding the airdrop bonus). I have discussed having a full backing redemption (with 100% of BSGG; however, there are concerns that we would be in effect “rugging ourselves” by dropping the market price of BSGG by dumping such a large amount on the open market at once. We were also concerned about the impact on the price of the remaining holders’ value of BSGG that was not redeemed. Furthermore, given that 500m tokens were allocated as an airdrop bonus and it is currently being distributed through the farm, excluding that amount would reduce the impact on remaining holders by ensuring the farmable amount remains. We could alternatively pay out the BSGG in the form of a stablecoin, but this does not seem fair to long-term holders.

Option 2:* Redemption would be at the liquid backing value (no BSGG). At the time of this writing, the liquid backing currently stands around $35,000 per wMemo, versus $48,000 for the full backing price.

*In both scenarios, no fees would be taken out of the backing since we are not doing a full backing price, but one closer to a liquid backing.

3. How will the redemption be paid out (in MIM, proportional assets of the treasury, etc.)? I’m advocating for a redemption that is paid out in MIM/USDC (and a portion of BSGG with Option 1) or an alternative stablecoin so that small frogs are not disadvantaged with gas fees and headaches associated with smaller proportional asset allocations. Paying out in stablecoins would also reduce price volatility risk during the redemption process.

Discussion of redeemed wMemo tokens:

Once the wMemo is redeemed I would propose that it be burned similarly to the previous RQ, effectively serving as a buyback. The non-liquid portion of the assets that are not redeemed would increase the backing value for the remaining holders of wMemo after the redemption period.

Business and/or technical requirements of the implementation of the proposal:

Present the requirements to implement the proposal.

There are two main ways we can execute a redemption:

Option A - Deploy a single tick V3 pool on ETH, load with stables and let people bridge wMEMO over and redeem. There will be costs/fees associated with bridging over to ETH.The V2 pool that’s currently on AVAX would stay. Arbitrage between the two pools would keep the prices close to backing - allowing frogs to sell into V2 to redeem. The benefit of this is that no contract will need to be deployed/developed/recycled. And it is something the TM can carry out on his own. Also any redeemed wMEMO would be able to be brought at backing in the V3 pool during this time allowing larger buys to potentially occur. This process may be quicker/easier to deploy given the TM has full control, and does not require devs to deploy a script (reducing the potential for SC risk and delays in the redemption process).

Option B - Reuse the RQ contract and make some slight modifications so that the redeem price can change for use each quarter - deployment and development of this is something that the TM would not be able to carry out and would need help to execute. A potential concern with this route is exposure to smart contract risk.

  • Thanks to SkyH, Tikkamasalas, Nal X, Kyle, and everyone in the discord/forum for input and help writing the RFC.

Please note that this is a work in progress RFC. If you have any suggestions, recommendations, or concerns please comment for consideration.


MIM makes the most sense


Yea, either MIM or USDC


Looks good to me. I think the liquid backing makes more sense. Some of the volatile assets will likely need to be dumped either way after any redemption period to rebalance the treasury. My main concern with using MIM is that a large amount of wMEMO will be going out to redemption, effectively dumping 100m+ MIMs onto the market. There might be some peg issues in the short term.


@ruian I think the idea would be to keep the same proportions/ratios in the treasury post redemption (although this is SkyH’s call). Therefore, unless we had a very large % of redemptions this should be a non-issue. I don’t remember this occuring during the rage quit when everyone redeemed for MIM (although some went to Spell). We could also convert the directional assets to USDC to create some balance and reduce price volatility of pushing it all through MIM.


Thanks for putting this together, looks like it’s a completely even split on the votes! I think the liquid backing makes the most sense for the longevity of the protocol.



:heart: the main post

:heart: the comments your agree with and make it easier to identify what should be incorporated in the WIP.


current holder of 18 wmemo, you have my vote. This is a great step forward to act like a VC


Please comment as to how you would like redemption executed, which option you prefer (1, 2, or something different), and a rationale behind it.


USDC for stable to redeemed. and then redemption at liquid backing. using a v3 pool to implement is the best path to go.

Also for the longevity of protocol liquid backing redemption is the best option. however can see some people wanting the full amount that is inflated due to BSGG. we could make these people happy by adding to the liquid backing their share of BSGG at cost to what we acquired it to due to it not being able to be liquidated.


I’d also add that reusing the RQ smart contract for these quarterly redemptions would be good too to avoid fees related to bridging and executing on ETH. We went through one of the biggest redemptions in defi with the last RQ with no issues.


Just to be clear, there are ~500 million BSGG tokens planned for the WMEMO FARM on Wonderland, there are an additional 1.5 billion BSGG tokens in Wonderlands treasury, currently worth ~$50 Million.

It is the 1.5 billion BSGG tokens that are “locked up” in the treasury that we are talking about. 25% = 375 million tokens or ~$12 million.

only 25% seems low, but for reasons pointed out I’m for it.


Smallish bags wont need to bridge to get the amount they are entitled too, larger bags would bridge if they wanted to redeem which the fees incurred for this would me small compared to bag size.

benefit of going the V3 route is that and wMEMO redeemed would be able to be brought by anyone at backing price, with less slippage. even when the redemption period ends the redeemed wMEMO could even be left in the V3 pool and just pull the stables allowing people to buy with minimal slippage.

1 Like

Yes were discussing the 1.5 billion BSGG allocation. I prefer to leave this up to SkyH as to how we would accomplish this, whether paying out in BSGG directly (from the non-farm alloaction), or by paying out the fair value at the time of redemption in stablecoins.


Thanks for putting this together. I’m all for Option 1.

It’s fair, it honors the idea of a backing you can trust and it’s needed. I’m looking forward to seeing this go to WIP and then snapshot.

You have my vote.


I think redemption should include a portion of the BSGG, ideally there should be a way to prevent/discourage people from just dumping the bsgg as soon as they receive it. If no such way exist, perhaps giving them additional stables is the way.


Very much for the proposal, I think once Wonderland shows that holders have regular redemptions like a real world fund, you’ll see a lot more funds flowing in vs currently where investors weigh putting in capital to let the treasury manager work with it, with the potential that they may never be able to get the funds back out again


Liquid backing (option 2) seems the best to me. The BSGG and Cross The Ages investments are much more long-term, and should really benefit the people who stick around and stake their wMEMO to farm those rewards, rather than just giving part of them to people who are exiting the project. I think people should know that those investment options are only available to current holders, and if you want to get BSGG/etc. you need to stay in the project to farm them.


Option 1 feels the most fair whilst also still giving a benefit to holders by increasing backing price. I’ll vote for Option 1.

I would like skyh opinion on which mechanism he prefers