Smoothfully, Bertoo1337
Wonderland Finance
DAO Discussion
19 January 2022
Ownership Period for New wMEMO Investors
It has come to the attention of a few community members such as Bertoo1337 and Smoothfully that there is a way we can prevent future cascading liquidations and less volatility of wMEMO.
New investors since the start of this project have been able to buy as much wMEMO as they can afford then borrow against all of it to get more token quantity so they claim more rebase rewards. The problem is that these “investors” do not really know the consequences or how borrowing works and are getting liquidated at high prices and setting their position health really low so they can maximize the amount of MIMs they can receive and as we saw on Monday, when the price plummeted, everyone was getting liquidated and are complaining to get their money back when it was just lack of education so here is the solution to somewhat prevent this from happening so often.
The Wonderland protocol and Abracadabra should prevent wMEMO from being borrowed against for at least 1-3 months after purchasing/wrapping.
This will prevent short-term investors from going (9,9) and getting liquidated at the next small sell-off wave and consequently lead to a downward cascade. This will improve price and also increase stability since dilution through minting is already taken care of. This also will attract more long-term investors because people will not be able to make quick money off the project anymore without knowing its utility and these long-term investors will help with the growth of the project, knowing they are not selling their bags.