I like your idea too and we need to figure out who get to withdraw the $50m? Is it FCFS? Is it by lottery?
Here is an idea but it needs to be flushed out. I understand that people need liquidity during this bear market but how much is reasonable and at what point that it may cause a death spiral affecting the entire protocol. We want to have full control of the flood gate at all time to guarantee the survival of the protocol. Let’s say people are allowed to withdraw 2.5% with treasury backing per month. If they want to withdraw up to 10% of their holdings, then it is only at 50% treasury backing per month. We can create some sort of ladder structure with a max limit of 15% of their holding. This will provide investors with liquidity and also incentive to keep their investment with the protocal. If they can’t wait for next month, then take the hair cut. Maybe someone can help us with this ladder structure.
I think that your answer highlights part of the implied choice in this mechanism that should be explicit. Parts of the fund management allow redemption at any moment - mainly public equities and bond funds. Other parts of the industry require lock-ups for a period of time. This is due to the nature of investments and you would have a hard time running private equity funds on an open-ended basis.
Perhaps this is a moment to say something about the nature of the treasury management strategies that are proposed to accompany this ongoing quit option since that is part of the implicit package.
Also, I don’t understand why we need a redemption since wMemo is already fully tradable and people can exit their position at any moment in time. This seems to add unnecessary complexity and no obvious benefit. I can’t see that wMemo benefited in terms of financials from the first rage quit in a big way.
To the point about building a portfolio on my own, I could indeed. But part of the appeal of Wonderland was benefiting from the management of someone hopefully more skilled than myself and Wonderland having access to trades that I do not. If I should see it differently, than pls let me know.
Controlling redemption makes a lot more sense to me. Keep in mind that people do have full liquidity with wMemo. They can always sell it on the market. The only reason to do redemption instead would be if the protocol offers a higher price than the market. So it creates an incentive for more swing trading on a periodic basis.
I’m not sure that I would fully agree with this statement. Predictability and follow-through on management promises set the rug pulls apart from the reputable.
Reputation does matter, but that does not mean that this particular approach to ongoing, rolling redemptions is the only way to protect reputation. As long as Wonderland has clear parameters, transparent and professional management, and executes according to the parameters, then it will have a strong reputation.
Reputation does matter, but that does not mean that this particular approach to ongoing, rolling redemptions is the only way to protect reputation. As long as Wonderland has clear parameters, transparent and professional management, and executes according to the parameters, then it will have a strong reputation.
Controlling redemption makes a lot more sense to me. Keep in mind that people do have full liquidity with wMemo. They can always sell it on the market. The only reason to do redemption instead would be if the protocol offers a higher price than the market. So it creates an incentive for more swing trading on a periodic basis.
WMEMO falls significantly below backing value, and is perfectly comfortable staying there. RQ and redemption talks alone brought the price closer to backing. If Wonderland wants to attract investors it needs to offer them a way to make money. If there is no option to sell your tokens for their value, why would people keep buying them?
This is not overly complex, and the obvious benefit is new investors.
You are not draining the treasury when you redeem below backing. Both option 1 and 2 are offering a redemption BELOW backing. That means everyone who redeems INCREASES the treasury’s value of wmemo, not decreases.
It also reduces the supply which is another benefit.
The fear that “Everyone will take all the money and leave!!” is nothing but FUD.
People will continue to invest in Wonderland if it looks to be a good and fair way to invest your money.
I think that you have made several errors in your statements:
There is currently an option to sell wMemo. If people buy and hold, the auto compounding should make money for them. People want their pies and eat them too; hence, they would like a fulll treasury backing when they sell wMemo.
If you say that the fear that “Everyone will take all the money and leave” is nothing but FUD, then put your money where your mouth is. Will you put up collateral or guarantee to compensate the community if you are wrong? Why can’t we test the theory by taking small redemption monthly to control the flood gate? Why are you having issues with small monthly redemption?
I understand the reduction in supply, and both options 1 and 2 are offering a redemption below backing but we need to put some solid numbers behind these? Is the redemption 25%, 50%, 75% below backing or is it only 5%? Let’s do some game theory here, should I stay if the redemption is 5% below backing?
How much money are we planning to raise with new investors $50M, $100M, or $150M? So if we open the flood gate and drain the treasury by another $186M, to get $50M from new investors, is this totally worth it?
What am I missing here? Please explain it to me. Yes, I am an idiot in training and would like to become a certified idiot.
This isn’t a question. You are 100% wrong about auto compounding and making money. Rebases do not add value.
I never said anything against monthly redemptions, what do you mean by small? Below backing redemptions? What does a small monthly redemption look like?
I don’t know what will be decided, if you are talking about BSGG token percentages then all of those options are fine with me.
If people want to leave your protocol at fair value, and don’t want to invest with you, then you have failed as a protocol. If you offer a product that people want, then you will succeed. You can’t grow a treasury just by hoping unsuspecting investors will fall into it and be stuck.
Your logic is flawed here. You talk about attracting new investors by offering them ways to make money, but that’s not what redemption is. It will attract the arbers, but that’s it. Once/if market aligns with backing, there is still no extra reasons for new investors to come by and “make money”. If they bought below backing they can also sell below backing on the market. New investors bring very limited money to Wonderland (LP fees), but they can leave with a way bigger portion of the treasury through redemption.
Fairness is also relative and not a good argument.
@tesla888 brings very valid point about staying on the side of caution. Our own TM @TheSkyHopper has said that he believes OHM’s current inverse bond “cannot handle the treasury destruction it would produce” even if they have multiple safeguards in place. Yet he is not worried about our redemption that has no limit whatsoever and a much smaller treasury.
@rexfire to offer regular opportunities for holders to leave at backing value instead of market value.
That is exactly what redemption is. The new investor sees WMEMO below backing on sushi, and buys WMEMO. Then backing comes around and they redeem for profit. That is how they make money. That is how redemption gives investors a way to make money.
In fact, I will go further, and ask you, how do you make money while investing in Wonderland?
If you want to call people that will join right now and leave at the first redemption “investors”, sure. I called them “arbers” investors would park their money and stay for the long term.
Glad you ask! Have you heard of our new farm page ? You can stake your wMEMO and it currently gives you close to 23% APR.
Visit Volta Club to stake. Remember, it’s two transactions!
That’s racist. Do “arbers” as you so eloquently called them, not invest their money in hopes of a profit? What would you call someone that invests their money with no hope of profit, a fool perhaps? Do you not think those who have been “parking” their money with Wonderland, should earn a profit?
Is the 20% and falling APR from the BSGG token with a falling and undetermined value the BEST Wonderland can offer?