We have seen a liquidation cascade at least 2 times now.
Most frogs don’t know how to manage their risk and ending up loosing their positions.
We could protect everyone, if we just don’t allow using wMEMO be used as collateral.
Please set up a vote to protect all frogs!
I think the solution is rather educating people instead of preventing wMemo being used as a collateral. From what I experienced in Discord last night, most of the little frogs thought that leveraging was close to risk free… Which is definitely not the case! And when a lot of YouTubers show how easy leveraging is and how one could easily make more and more money, without emphasizing on how REALLY dangerous it is, no wonder we come to… this!
If we dont do it , some other platform is going to do it.
When a person can go borrow against BTC why not against TIME, it is upto us on how we use the leverage
Think this is abras call but I would support a proposal to formally request that they lower max LTVs based on the market cap of wonderland. At current market capitalization, perhaps it should be as low as 25-30% and then you can allow higher levels of leverage as the market cap goes.
I’m for people being able to use defi to its capabilities and banking the underbanked but we should request lower LTVs so as not to endanger our own project.
Hey, maybe we could make where new investors are not able to leverage right away, maybe an “ownership period” for new wmemo to create less volatility and fewer liquidations and keep investors in for longer peiods.
This would not educate frogs on how to keep their wMEMO once the leveraging becomes available to them and would only delay the liquidation.
What I mean buy that is it would not prevent a liquidation event, if people get in when the market price is rising and then starts dropping. There would still be the snowball effect once the price drops and people get liquidated 1 by 1, causing the price to then eventually freefall.
2 liquid cascades in a month. Crashing the price from 10k to under 1K… Being able to collateralize wMemo, is allowing greed to destroy the price action of Wonderland and is putting everyone at a loss. I don’t know why it keeps being promoted as being one of the key features of wMemo. I would vote to turn off borrowing against wMemo.