I will cover 3 things :
- Why we are going to 0 due to “communist party” talk
- What it would cost treasury to allow a full arb by whales once we allow “ragequit” or “redemption at backing”
- Can we be that whale and lose 0 ?
PART 1 - Communist party anti-whale sentiment is getting us nowhere.
I have observed the events of the last few days, and i’ve observed a quite strange phenomenon. A lot of people seem to be against people who bought below backing making money because they themselves bought higher, or some basic anti-whale talk with little substance.
This is truly a novel concept and thinking is so basic that i feel weird having to explain it.
For the price to go up, you need buyers, and if price goes up, people who bought low make money. That’s how it works.
You can’t ask for people to buy your token to make it go up, and at the same time try to find ways to confiscate their money. They are not going to come.
Noone outside of frogs cares about frogs, the market won’t do charity to us.
We are left on our own now, there is ZERO new money that will come until we fix this issue.
We are going to dump forever until price is so low that new buyers just buy 51% of vote and take the treasury anyway.
That’s literally what happens to countries that start voting laws to confiscate foreigners capital “because foreigner are richer and can buy cheap here”. Investment stops and the country collapses, then mercenaries come and loot it.
PART 2 - Cost estimate of ragequit / arbs.
Let’s assume we announce that treasury buys back at backing. Let’s imagine a big fat whale then comes and buys all the wMEMO possible until price reaches backing.
Everyone makes money, but this whale will basically make “free money” out of treasury, how much exactly ?
Let’s examine sushiswap pool, as of now you need around 6.2m$ of MIM to buy wMEMO and push price to backing of 36,500$ (let’s assume this is the number, and full math at the bottom)
This gives you ~235 wMEMO, that you can instantly exchange for backing value of 36,500 using ragequit option. You would then recieve 8.6m$, making a profit of ~2.4m$, which is 0.35% of the treasury.
So these “whales” will cost us 0.35% to fix the whole problem, and move on with our lives and building the project. This is a very small price in the grand scheme of things.
Now let’s estimate how much money might actually leave. Snapshot vote had ~ 95k TIME Yes
Backing at 36500 per wMEMO is roughly equivalent to 560 backing per TIME. 560 x 95k = 53m$
Assuming everyone there leaves, we lose less than 10% of treasury.This doesn’t endanger in any way the project. Now the more this shitshow continues; the more people lose faith and the worse the outcome will be.
Part 3 - Can we do it ourselves ?
This is the even better part. Treasury has a gigantic pile of money, much more than 6m$.
If we just allow ragequit + buyback 6-7m$ of wMEMO using the treasury MIM (it has more than 35m$ of MIM).
Then we fix the problem, there is no arb to be made anymore, and ragequit can be allowed.
So can we please just stop this anti-whale bullshit ? It costs us almost nothing in the worst case, and nothing if we execute a buyback at same time.
What we cannot do, is prevent anyone who already bought as of now to make money once price goes up. They already bought and are taking the risk of further collapse (like whats happening now) So if price goes up, everyone benefits. Telling new buyers they can’t make money “because they are not diamond hand buyers from 1000 years ago” is the best way to get ZERO buyer. The market is not a charity and doesn’t for how long you held or how much you lost. So can we be a bit more rational to make back some money instead of losing it all ?
Math : Sushi pool is a constant product AMM with
844.5 wMEMO / 16,063,240 MIM - Price 19,021
Using target new price of 36,500 and constant product formula.
New_MIM = SQRT ( 844.5 x 16,063,240 x 36,500) = 22,251,681
So net buying pressure required = 22,251,681 - 16,063,240 = +6,188,641
At which point the pool will become made of :
609.63 wMEMO / 22,251,681 MIM - Price 36,500