[WIP #3] - A United Front: Abracadabra + Wonderland Merge

[hms154]

I’m for this merger.

I loved the Wonderland model of earning yield in the short-term via farming/fees and in the long-term with great VC type deals for 10x+ opportunities. Unfortunately a combination of a crypto-wide downturn and several leverage cascades have made the sentiment towards Wonderland very poor (not a surprise when the price has dropped 95% from ATH inclusive of dilution and several people including the founders were surprise liquidated).

With a treasury of this size and the long and short term opportunities, Wonderland can still have a great future. The price will eventually follow the real growth in treasury. To that end whether or not this proposal passes, we should shed all counter-productive and misleading mechanisms:

• rebase rewards - 0 true wealth generated with this mechanism.

• stop buybacks - the token price doesn’t matter and will eventually follow the growth of the Wonderland treasury divided by the token supply.

• Stop/Reduce leverage on wonderland tokens

The 2nd and 3rd mechanisms have been working together to drain the treasury by aggressive traders. The treasury is our core growth asset and needs to be preserved as priority no.1.

Dropping these mechanisms could cause the price to fall further, but treasury growth will restore the price demand over time as crypto overall recovers and the current poor sentiment subsides. So, I think wonderland can be rolling again in time.

The problem is that it’s purely a treasury with reliance on great treasury management. From my understanding, the dev team is not setup to expand wonderland to multi-chain. Merging with spell allows us to shed all the above unnecessary mechanisms, access a larger dev team, move away from the bad sentiment, and focus on taking advantage of the treasury for short and long-term profits.

Before voting yes, I would want to see some data at the vote:

• A confirmation of the wmemo to spell exchange rate

• Current treasury value and yield

• Estimated revenue we can expect on spell adjusted for spell dilution resulting from wmemo exchange

• exit option for disillusioned wonderland investors at the exchange price. Lets leave as much of the bad sentiment behind as we can

[Ironman.jtsme]

A better strategy

I believe it is time for wonderland to take ownership of its greatest asset which is the treasury. Farming as a service works especially in the present market condition. There is zero reason for a treasury of this size to lose money on buybacks - nor is a merger to the benefit of wonderland. Usually the larger bank acquires the smaller bank.

We need to fully implement shared revenue.

Farm as a service which wonderland and Dani and team know well

Focus on restoring the intrinsic value of the token by offering this shared revenue model. Fewer people will see benefit to shorting an asset that yields them a passive growth of value.

Stop additional treasury depleting activity (to include investing) until we have restored the value of the token Wmemo to at least pre 68k wmemo level

Focus 100% on a clear restoration of value strategy

Full transparency of funds (good start with FUNDS tab on the wonderland app)

Appoint team from overlapping timezones so that someone is always at the helm

Appoint marketibg and communications to counter-FUD strategies

Once we have stabilized above 68k Wmemo levels start the process of burning all liquidated supply. Burning supply after stabilizing the price range will help prop up price in the next range - while the revenue share model will keep holders firmly entrenched.

Next focus on a goal based APY reduction (not the punative model some daos use) Utilize price to phase out rebasing - example

At 50k wmemo apy = x example 60,000%
At 60k wmemo apy = x example 45,000%
At 70k wmemo apy = x example 30,000%
At 80k Wmemo apy = x example 25,000%
At 90k Wmemo apy = x example 15,000%
At 100k wmemo apy = x example 10,000%
At 110k wmemo apy = x example 7500%

Use this model until apy = 50%

Once price of Wmemo is at a sufficient level Apy will be zero. However once Wmemo was to enter specific ranges earlier holders are made whole and will likely stay due to revenue share vs taking an opportune exit.

Let Dao vote determine all levels of apy. This will assure those who hold on the riskier end of the curve are always rewarded because right now people are only holding because they are down - that should never be the reason to hold a blue chip asset

Finally, stick to ONE clear and concise direction. Execute that plan and after that plan has been executed move to the next stage of the plan. No more zig zagging. Zig zagging doesnt create momentum it creates head winds. All of this communication of plans that go unexecuted become opportunistic fud.

It was great PR to execute buybacks, but not good PR when we still havent received air drops of assets the community was promised. Also not good PR to discuss a revenue share plan one day, then the next drop a merger plan on the community. Obviously bad communication strategy.

Top priority for this Dao and for Wonderland should be to restore the intrinsic value to the token asset.

[kbanna]

I can see how this proposal could make sense but it is unfortunate as a lot of us investors who entered in the beginning lost ~70%+ on our initial investment if we invested in November 2021.

I can see in discord that Sifu is saying that if this merger were to move forward that the exchange from 1wMEMO to SPELL will be $40,000 for 1wMEMO = 4.9 million SPELL. If this is going to be the official exchange then investors from November 2021 will realise 70-75% losses on initial investment. This means that investors who bought in January 2022 have a major advantage vs those who believed and stuck with the TEAM and project since November.

My proposal:

Adjust the exchange rate according to how long an investor held and believed in the project.
For example:

1wMEMO = $80,000 or 9,800,000 SPELL if invested from November/October 2021 (realised loss will be ~50%)

1wMEMO = $55,000 or 6,737,500 SPELL if invested from December 2021

1wMEMO = $40,000 or 4,900,000 SPELL if invested from January 2022

The final exchanges can be discussed but this is the overall idea. Please vote if you believe that this would “cushion the blow” for early investors. Thank you.

• I agree with the idea and exchanges mentioned above
• I agree with the idea but I DO NOT agree with the exchanges above
• I DO NOT agree with this

[feelsbadman]

If anything, the swap ratio definitely has to be much favourable to wMemo holders instead of just using the current Spell price. Maybe a multiple based on FDV divided by existing circulating supply.

Why? Instantly realizing Spell price from existing circulating supply to fully diluted value will definitely cause a crash, leaving wMemo holders further in the red.

Or at least give us an option to cash out at backing price for those who believe the same as I do. Then we can buy back Spell cheaply when the crash happens.

Another idea i saw in the forums is to buy out Abra (51% of their circulating supply) using our treasury. Obtained 51% circulating supply of Spell will be part of our treasury/backing and we can still have protocol owned liquidity and continue VC investments as usual.

[Ironman.jtsme]

[Ironman.jtsme]

Does it look like we have a problem?

[Im_The_Bishop]

As always, amount invested will need to play a major part not timeframe. Imagine investing 500 in November and being given the highest payout amount for this and coming in late in January and putting 10,000 down to back the project and getting the 40k route when wmemo was still 108000 in early January.

[Sol_Mustafa]

Great proposal! I agree that Wonderland is the bigger asset in this merger proposal and would be a good time to take ownership of the treasury to restore the value of the token as well as the confidence of those of us hodl’d. I feel with a little bit more patience and focused attention; we can come up with a better solution than the merger that is being proposed. I’d really like to see this project rise from the ashes and claim it’s top spot in the Defi space as originally dreamed. Consider adding your proposal to the forum for voting.

[Beto_L]

I would support the motion to merge, but the wMEMO that was held through these confusing and difficult times need to be rewarded appropriately

[MINT]

Awesome news! More power to investors for bigger and better deals. Can’t wait to vote. Road to life-changing wealth.

[Ironman.jtsme]

Ok i will do that, thank you for the feedback

[Lord_Bogdanoff]

Two items to STRONGLY consider. Please read the following as you think about the merger:

For those who currently have WMEMO as collateral within Abracadabra post merger: In the discord Sifu stated that they will remain in the cauldron, an oracle will track your owed amount of SPELL. When you exit (withdraw collateral), it will be auto swapped for your owed amount of SPELL.

This causes a few issues or items that will need to be clarified:

1.) Your CDP position basically becomes SPELL, so while it is sitting in the cauldron, you will be unable to stake it as sSPELL. This puts those who are unable to pay down their loan in a horrible position as they will get none of the benefits of sSPELL. The whole point of collateralizing WMEMO in the first place was to repay your debt position with the accumulated rebases held within WMEMO or at the very least the potential revenue share associated with WMEMO. Since your collateral position will just be in SPELL, you are essentially stuck and only gain benefits of price appreciation. This is not what people initially signed up for and is representative of a completely different asset than what we initially invested in to initiate our collateral positions.

SOLUTION: WMEMO held in collateral positions should receive sSPELL when withdrawing their collateral position.

2.) Under the same assumption that the WMEMO collateral position is basically migrated to SPELL - this can open up a high probability that you will get liquidated even quicker given volatility and confusion surrounding the merger. How will WMEMO CDP positions be protected? Even during these crazy liquidation cascades, very conservative leverage positions were put at severe risk and found people continually adding more collateral to improve the health of their liquidation price. As this migrates, it will be extremely hard to keep track of the sudden wicks, as your collateral is now denominated in a completely different asset which has to undergo price discovery.

I would be open to hearing the community’s thoughts on these two points. For point #2, I am not sure of any easy fix for this, but the risk is very real and needs to be addressed.

[pmapp]

Yes!!! STANDING Freaking Ovation!!!(clapping!!!)

[Axor]

Absolutely right. Feels like a knee jerk reaction to the real issue.

[SammyD]

its the highest payout for 500 which still wouldn’t be that good… and im sure a shit load of people invested way more than 500 back in november. 500 would be a minority

[Eddy1977]

NO WAY, this will not solved the problem of wonderland holders! this will create new problem by sharing our potential revenue to another spell token holders!!!111

[drewbled]

Please listen to Dani’s AMA from today. This is not possible, currently. There are only 98B SPELL tokens available for this, period. Every available SPELL token, including the founder/team shares were offered up to get the number of tokens high enough to propose. Their valuation has fluctuated. When this was originally negotiated the “buyout” was actually at a significant premium to the backing price. By the time this closes, if it does, it could be again. It could also be at a significant discount. Bottom line is that the number of SPELL tokens on offer here is fixed.

[BigPapaDefi]

WHY do we have to have a merger … What exactly is the breakdown in this system and why do people believe it’s failing in the first place?

[daobra]

Good response, I am with Bert.

[rcarms33]

I agree overall with the above proposal, brilliant, but don’t agree that ppl who bought in in December should get an exchange rate of $60,000 per WMEMO. I have been buying since November and have only seen WMEMO price fall under 90k until after January 16 if I’m not mistaken?