[WIP #10] - Proposal to burn wMEMO tokens

Governance Archive [WIP] Wonderland Improvement Proposal
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[WIP #10] - Proposal to burn wMEMO tokens

Scope:

In January a proposal was introduced to implement a burn mechanism for wMEMO tokens.

While it had been put on ice due to everything that happened with Wonderland since, the proposal did gather community support.

Therefore, it is being moved to WIP for the DAO’s consideration.

Link to previous discussions:
[RFC] - Proposal to burn $wMemo tokens
[DAO Discussion] Proposal to burn $wMemo tokens

Snapshot:
https://wl-l.ink/Snapshot/WIP-10

Objective:

Define how wMEMO acquired through buyback as well as the other TIME, MEMO and wMEMO is the treasury should be handled.

Proposed Process

Rage Quit
During the Rage Quit period, wMEMO tokens exchanged through the portal were sent to a dead contract effectively “burning” the tokens.

Those can be find here:
0x000000000000000000000000000000000000dead

Buybacks & remaining tokens
A similar process can be followed when doing buybacks or to burn the TIME/MEMO/wMEMO in the treasury.

The same dead address can be use to send wMEMO tokens to this address that has been bought back, which includes nearly 5,700 wMEMO in Treasury on Avalanche alone, and close to 2 000 000 TIME/MEMO.

This does create a bit of distortion in the market capitalization and calculation for the backing price without adjustments being made in such calculations. Burning the tokens would remove the need to do these adjustments.

Protocol Owned Liquidity & Reserve

The current need for wMEMO is for protocol owned liquidity (POL) and some buffer for the future.

The following amounts are being suggested:
Protocol Liquidity: 200 wMEMO
Reserve: 500 wMEMO

Given wMEMO is multichain, POL on every chains will be managed and prioritized accordingly.

Other wMEMO, MEMO, TIME in the treasury will also be sent to the burn contract above as a matter of housekeeping.

Technical Requirements:

This would required the Treasury Manager to send the tokens to the burn contract and consult with the core team on potential future need and/or technical requirements.

22 Likes
2

Interesting. So this to increase the price of wMEMO overall and reward long-term HODLers, isn’t it?

Also would push price of TIME back up with some sort of benefit re: the original rebases? That’s another thought, though.

I like the idea overall, if I’m understanding correctly (and please someone correct me if I’m not), my only concern is that wMEMO has stayed pretty strong in this turdésque market. If we start initiating buybacks and drive the price around, is this going to initiate also volatility that, until now, has been quite stable with what Dani and the Treasury are doing?

“…if it ain’t broke, don’t fix it”, kind of thing?

5 Likes
3

Buybacks have been happening since SkyH took over as Treasury Manager. I think this WIP is to officiate the procedure of “burning” the tokens as currently they are held in the treasury and not sent to a dead address.

5 Likes
4

I’m The Ferengi and I approve this message.

4 Likes
5

I am Captain Jean-Luc Picard and I approve of The Ferengi’s message.

4 Likes
6

I am The Fry and I approve this message.

1 Like
7

You guys are taking the right path during this bear market season. Fix and agree on the right properties for Wmemo. For me is approved.

2 Likes
8

all for pushing for better pricing. idk if its the right timing. like others have said the volatility has been pretty stable why chance at messing that up and being worse off. since we are only dealing with wMEMO i would definitely approve of burning all other tokens associated (MIM, Time). streamline and declutter. we need to look at the long term stability not the short term value of everyone’s wMEMO. if you are here for the HODL then this needs to be a multiyear investment for an ROI. Yes is would be nice to get a little something in the short term but it would chance the stability in my opinion.

9

So price increase is not guaranteed and most likely wont happen without a new run or backing increasing.

However, should Wonderland become more successful, it could create some scarcity around the supply (dependent on if we turn bonding back on or not).

As for buybacks, like @hypermassiv mentioned buybacks have been happening and are a big part of the reason for the price being so stable. This will ensure the supply is burned.

@Sabatage88 unsure this would have any effect short term. If anything, I see it more beneficial for the long term.

6 Likes
10

increasing the price of backing and of wMEMO has a short term increase. we have no clue who is actually willing to hold long term or sell as soon as they are even or have some upside. me personally i am looking for residual income. meaning i need atleast 2 good years before i start taking small profits over 10+ years. most from what i have seen are in this for less than 2yrs and move on to the next up and coming project. by increasing the price and dwindling the supply you create a squeeze to the upside. yes that is good short term and long term so long as there is little to no sell pressure. i think doing it is a risk to possibly be worse off than just steady going with a clean up and consolidation.

11

I don’t see any reason to burn tokens held by the treasury. If it’s held by the treasury it’s out of circulation anyway. No need to destroy it. Then in the future we could do more fundraising if needed.

1 Like
12

I like it, I see no negative to this. If for whatever reason WL ever got to the point where there was a need to increase supply we could always start minting again. burn away!

2 Likes
13

@Diazalon i don’t think this would help Time price at all due to the wmemo will still exist just not accessible…. Will still be staked and making time if I’m correct. Only way to make time go up is to burn a ton of time it’s self.

Burning I think is better in the long run as supply starts lacking… supply demand. Just have to have the demand and would have to start bonding back up or add something to create demand.

Maybe unwrap it then burn the time instead of wmemo?

2 Likes
14

Aye! They’re considered as burned, let them burn. :v:t2:

2 Likes
15

All for it, consideration for those long term HODLers IMO

1 Like
16

Right, but isn’t that more-so supporting the theory? If excess Time leftovers in the Treasury are being burned as well as Time wrapped in Memo wrapped in wMEMO being destroyed, TIME is more scarce so more valuable if I had some sitting in my wallet and sold at the right moment? Or? Am I crazy and blinded by rebases rolling down my screen like Matrix numbers or just plain wrong?

I guess there’s fa liquidity anyway. Dead salmon

17

It’s not a make or break but I support this as well.

I’d say it’s way lower priority than the clarification of Dani’s role or the redemption process though.

Cheers guys

1 Like
18

I’m on board with you here.
Fundraising would likely lower the backing price because in order to raise funds we’d need to offer a discount, however if the treasury is increased and put to use in a more productive way than the discount, I see that as a win.

For example, offering a 5% bond under the current market price while having an investment opportunity that looks to earn 40%… I’d say raise the funds to earn everyone more revenue.

This shouldn’t be done now though because it looks like we aren’t in a situation to optimize the treasury and don’t have a need to raise funds. But maybe in the future.

If the Abra merger happens, I’d say burn them right away. lol

1 Like
19

We should do reverse bongs with specific amounts that the TM will decide in order not to halt the growth of the Treasury investments!
Its buybacks technically!
This way we buyback and burn tokens, this is a win win situation since we don’t allow rage quit, we do sustainable injections of reverse bonds to benefit the protocol, price increases people can have a decent profit and holders profit from the price increase.
We should re launch the bonds its a huge income source and it will help WL become great again!

20

Buybacks and burning of the tokens is essential for Wmemo increment of price at list in the long run.

Scarcity brings more value to Wmemo and more benefit to long term holders.

I absolutely Approve.