[WIP #9] - Quarterly Redemption Option for Holders

Governance Archive [WIP] Wonderland Improvement Proposal
1

[WIP #9] - Quarterly Redemption Option for Holders

Scope:

Outline Wonderland’s quarterly redemption process and implementation.

Links to previous discussions:
[RFC] - Quarterly Redemption Option for Holders
[DAO Discussion] Quarterly Redemption Option for Holders

Objective:

This Wonderland Improvement Proposal (WIP) will define the details of the three major components required for quarterly redemption to be implemented.

    1. WIP #9 vote to establish if quarterly redemptions should be implemented or not.
    2. Establish the redemption process.
    3. Assets considered as part of redemption.

Objective 1: WIP #9 Governance Snapshot

The goal of this vote is to decide if the community wants to implement a quarterly redemption option which allows wMEMO holders to enter a whitelist and redeem at a predetermined valuation (redemption price). This WIP will allow the DAO to decide if a quarterly redemption option should be implemented for wMEMO holders as proposed below.

The snapshot vote will be posted as WIP #9 with the option to implement quarterly redemptions as described in the governance framework. After the vote is over, and if the results indicate that the DAO wants to implement the quarterly redemption option, the core team will take the steps necessary to ensure the redemption process is implemented.

Snapshot Vote Duration:
7 Days

Voting Options:

  • Yes, implement quarterly redemptions
  • No, do not Implement quarterly redemptions

Link to Snapshot poll for the proposal:
WIP #9 Snapshot Vote

Objective 2: Establish the Redemption Process

If the result of the WIP #9 Snapshot vote is in favor of implementing quarterly redemption, the following process is to be implemented.

Announcement of redemption price (no later than 1 day / 24 h prior to whitelist)

The core team will present a summary of the treasury, including a breakdown of the redemption price per wMEMO to the community no later than 24 h prior to each whitelist snapshot.

A link to the breakdown should be added to the whitelist text. The breakdown should be easily available to everyone. A post on the forum is recommended.

If some assets will not be redeemed as USDC (or selected stable coin), the pricing used for the calculation of the redemption price breakdown will be taken as close to the announcement as possible.

Keep in mind that some of the treasury assets are volatile and the redemption price can move upwards as well as downwards until the treasury has been fully prepared. Assets not converted to a stable coin will continue to vary in price.

Whitelist (7 days / 168h)

A Snapshot votes for a redemption whitelist will be held on a quarterly basis, starting with “Q3 2022 - Redemption Whitelist” and will continue in the future with Q4 2022 - Redemption Whitelist, Q1 2023, Q2, etc.

  • The whitelist vote will start 9 days before the redemption period.
  • The vote will last 7 days.
  • The redemption price per wMEMO has to be included in the description of the snapshot.

wMEMO holders who wish to be eligible to redeem their tokens and receive the determined amount associated with their wMEMO will need to vote YES. By voting YES, their address will be whitelisted for the redemption period of that quarter.

Snapshot Text:

If you would like to participate in the QX 20XX redemption, vote “YES, add me to the whitelist”.

Redemption price: $XX XXX

Link to summary of treasury information and breakdown of the redemption price::
QX 20XX - Redemption Breakdown

For more details on quarterly redemptions, refer to [WIP #9] - Quarterly Redemption Option for Holders.

Voting Options:

  • YES, add me to the whitelist
  • NO, do not add me to the whitelist

Treasury Preparation (2 days / 48h)

Once the whitelist snapshot has ended, a 48 hour window will allow the core team and multisig to assess the results and prepare the treasury for the redemption period.

Redemption Period (3 days / 72h)

Once the treasury has been prepared, the redemption contract will be topped up with the amount needed for the entire whitelist to redeem.

  • The redemption contract will be open for 72 hours.
  • After 72 hours, the redemption contract will be closed
  • The assets left in the contract will be returned to the treasury.

The UI of the redemption contract will show if the connected address is whitelisted, the redeemable amount of wMEMO, the redemption price and the amount of redeemable assets.

Redeemed wMEMO tokens will be taken out of circulation and burned.

Whitelisted addresses should be able to redeem a portion of their total redeemable amount.

Potential timeline for Q2 2022 Redemption:

  • June 21st, treasury summary/redemption price breakdown announcement
  • June 22nd to June 28th, whitelist period.
  • June 29th to June 30th, treasury preparation.
  • July 1st to July 3rd, redemption period.
  • July 4th, the contract is closed and assets returned to the treasury.

The Treasury Manager will manage liquidity as required throughout the redemption process.

Objective 3: Assets considered as part redemption.

Illiquid assets, assets allocated to the revenue share farm, and a portion of VC assets** will not be added to the redemption price per wMEMO.

No additional exit fees or penalties will be enacted or deducted from the redemption price.

In the event of an unforeseen situation or issue around assets not covered by the proposal, the Treasury Manager will use their discretion in an equitable fashion for holders and redeemers with an allowance of up to 25% of the asset redeemable.

**Up to 25% of any VC assets that are considered liquid will be redeemable.The final percentage allocated will be determined by the Treasury Manager and announced as part of the redemption price prior to the redemption period.

VC assets: - For the purposes of this WIP, VC assets are defined as both liquid/illiquid assets generated from seed funding investment from the treasury.

Safe Guards
After discussions with the community, moderators, and acting Treasury manager, to address concerns from long term holders regarding treasury depletion, a $100mm “halt value” has been enacted. If the total treasury value drops below $100mm, a new Quarterly Redemption WIP will need to go up for a vote to determine a new “halt value” established via the governance process. If the community decides not to continue the Quarterly Redemption at that time, redemptions will cease.

If the halt value is met during a redemption period, the redemption period will not be halted until it is completed for the quarter. If a new WIP passes with a new “halt value”, redemptions would resume the following quarter unless indicated otherwise in the proposal.

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

23 Likes
2

Yep. Agree with this option. We need a reliable way to offramp with our full value in the event Wonderland takes a turn for the worse. The only question is how many redemption opportunities we’ll have before we’re folded into Abracadabra.

10 Likes
3

been here off and on since last october, i agree this is a great step forward.
I’m a current holder of almost 20 wmemo and will gladly support this, even though I won’t be redeeming. I even acknowledge this is a step in acting like a true VC

Also good to see Dani and Sky agree on redemption.
Good WIP and fuck do kwon

9 Likes
4

I don’t agree with this, why we don’t do the same with Olympus and have specific amounts of reverse bonds at the backing price.
I think its a lot harder to exploit than the proposed solution and much less work for the team to move the money around…

4 Likes
5

Looks good to me. Great job Deal in persevering through the painful process to get this done.

8 Likes
6

In favor of quarterly redemption, but think should start after a longer period to allow investments to be made first (so not allow redemptions as early as Q3 this year).

Most VC/PE funds lock funds for 3-5 years (not suggesting we lock for this amount of time) to allow manager to deploy funds, without worrying if investors will redeem in the meantime. Also given the current down turn, I think now is the ideal time to be making investments rather than returning funds to investors.

11 Likes
7

Agreed for this, keep us updated.

4 Likes
8

Still against any type of redemption. Will vote no.

4 Likes
9

Great job Deal! I would like to see a more definitive timeline/workflow from redemption announcement email to redemption. Its a yes vote for EverForward.

5 Likes
10

this should read 25% or more, not 25% or less.

Another concern from long term holders is 15% of their token value not being redeemable. I suggest a 10% MAX value withheld from people “redeeming” their token for 90% of it’s value.

This says “no additional”, but it does not specifically say that you are ONLY getting at MOST 85% of your token value. This needs to be added so people know how much they are giving up when they redeem.

5 Likes
12

WIP is final and will not be changed other then changing wording that causes confusion.

Also modified your post to include your comments in 1.

4 Likes
14

Strongly agree with this WIP, redemptions are needed. Thank you for putting it together.

6 Likes
15

Thank you so much for the write-up of this WIP.

A few points to make. As the TM, if this WIP goes through, I have a few areas of discretion on liquid/illiquid assets and the pricing of assets for redemptions.

  1. I consider all tokens that are accounted for to be liquid assets besides BSGG. (To note, SAFT on CTA is not counted, along with non-vested BSGG). Pricing will concluded at a date/time between the end of whitelist and the redemption contract is put up, but closer to the redemption contract.

  2. On BSGG, as the majority of the those who voted in the poll for “YES - Redemption” in the RFC was for 25%, and community engagement generally to this time has been for more, I will use this as evidential backing that I would include 25% of free BSGG (to be clear excluding BSGG already in farm at the time of redemption and non-vested BSGG) along side the USDC equivalent of backing for redemption.

I think most other Olympus-Fork protocols have redemption, or inverse bonding mechanisms that currently attempt to allow investors to exit at fair values - and becoming an industry standard.

9 Likes
16

Not sure where the “halt value” idea came from, didn’t see it in RFC or discussions.

Feels like a sure way to block redemption given jt is highly likely in current market conditions that more than half of wMemo will vote to redeem (which will trigger this new halt value clause).

Feels like it should’ve been discussed and not just added

3 Likes
17

Yo yo.

More than half? No way. Walk away from all that BSGG? No way.

1 Like
18

This proposal is based on the assumption that Wonderland is going to give away its treasury. Before implementing this change we need to focus on ways to refill the treasury.

There are few ways to do that:

  1. Turn on minting
  2. Invest heavily using treasury funds

I have a fear that Wonderland will run out of funds quickly. We may enter the loop that will empty the treasury in 2-4 redemptions.

2 Likes
19

Then Dani can’t steal anymore. Good.

2 Likes
20

In my view, this is less exploitable than inverse bonds. With olympus, only bots are going to be able to redeem their OHM for the positive discount so most holders do not benefit (and once buybacks stop, OHM will tend to its $13 backing again).

There’s no way to “exploit” a redemption because anyone is free to redeem. If market price is below redemption price, that’s just the free market at play. To some extent, buybacks by our treasury minimize that gap too. And liquidity will likely be pulled at some point so our treasury will no longer sell wMEMO at the discount or allow others to buy it at a discount.

4 Likes
21

Redemption is a must have mechanism for this protocol, giving frogs a safe way to get out of the moving train if needed.

Quarterly redemption is a Yes for me, fully in support of this proposal.

5 Likes
22

Fully support this. In my opinion, very comprehensive merge of the 2 proposals, along with a built-in end clause for re-evaluation if treasury shrinks to a certain level.

Ability to redeem completes the circle to make wMEMO into an asset that you can have full faith to invest more funds in knowing you’re protected from the downside, whereas without a mechanism – it’s not much different than gambling with a memecoin and hoping others pump the price up

4 Likes