No. 98B $SPELL is way too much.
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I’m concerned that Daniele and Merlin would even put forward a knee jerk proposal like this…
I own sSpell to have exposure to Abracadabra lending and leverage. I DO NOT own sSpell to prop up a failing Wonderland. “Acquisition” of Wonderland is a dilution of $spell.
I own wMemo to be part of Wonderland. Don’t merge the two to “save” the one. Frog nation will make mistakes (Wonderland current situation.) Please don’t let one failure be the downfall of profitable projects with a strong future.
25 Likes
I vote a big NO on this proposal. The two projects can work together in tandem and so I don’t see a need for this merger. Wonderland can receive the liquidity incentives that Abra is paying out. Diluting SPELL holders with 80 billion more tokens to buy Wonderland isn’t what I signed up for.
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There is no way to justify acquisition of a $800M treasury by diluting the $SPELL supply with 98B $SPELL (Circulating supply increase of +120%!). This seems like a poor attempt at saving Wonderland at the cost of $SPELL holders, and I can see that the market is not taking this proposal well. No support.
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@0xmerlin quoting a post of yours, you said “After talking to Sifu”.
This didn’t age well. You almost gave a repeat felon and known criminal access to the $spell ecosystem. In light of recent revelations, please pull this proposal and insulate your investors from Wonderland before $spell goes to 0
1 Like
This has been the 2nd attempt to merge projects that the team is involved in. If the team keeps pushing these proposals, investor confidence in Abra would pale. I know damn well that my confidence in the team has been diminishing ever since the popsicle thing came out. Mergers shouldn’t be a knee jerk reaction and should have a clear defined benefits for both protocol which justifies the amount which I don’t see here or in the Popsicle merger that was proposed a while back. The bar hasn’t been met in both proposals.
3 Likes
The 800m to be acquired are valued assets. Stables, BTC, ETH, ICE, FTM, SPELL, ICE, CVX
All of these would be put to work to generate fees on top of Abra Revenue.
They’re is a dilution/split but the value being added surely out weighs this.
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An increase of $SPELL circulating supply by +120% would lead to a drop of 1 - 1/(1+1.2) = 54.5% in staking rewards from Abra’s business model if this newly distributed $SPELL is staked proportionally. So no, the value being added surely does not outweigh the dilution.
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Timing of this proposal couldn’t be worse, and it’s not a good look for us. It looks like a bail-out for Wonderland users, but the timing is off, and I’m scared it will push the prices of both Wonderland and Spell down more.
We can form this proposal in a very simple way as well:
- is the community up for Abaracadabra to use all its remaining SPELL to market buy BTC, ETH, AVAX dip?
That is basically what we are doing here isn’t it?
Positives :
- we are quite possibly buying the market bottom
- we have no slippage in 800mil purchase of these assets with SPELL, which let’s be honest isn’t realistic if we would do it on a open market
Negatives:
- we are putting all our eggs in one basket here
- we are doing the purchase on very low SPELL valuation - current price of SPELL is also a market bottom (at least I hope so).
My opinion is that we already have a good product here (Abracadabra lend/borrow protocol) and it is better for us to invest SPELL into other up and coming products (like proposals we had to buy liquidation protocol and option protocol), that can do 100x with our community backing and usage. Considering the investment sizes, for 800mil USD we could diversify our investments this way into 100 projects at least.
I’m against using all our SPELL to market buy BTC, ETH and AVAX.
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Unfortunately, the 0 emission phrase in this proposal feels like cheating to me. sSpell stakers would have gained considerably more Spell over the next years, comparing to just minting all remaining SPELL at this point.
Wonderland’s $700M TVL vs Abracadabra’s $5B is not a real deal or impact. It would be purchased at the expense of SPELL holders. In addition, simply buying >50% TIME tokens to control the protocol would be much cheaper than purchasing the TVL. (TIME mcap < $500M vs Wonderland TVL approx $700M).
6 Likes
The UST degenbox strategy in wonderland yields about 140k per day. What if this could be used as a buyback and burn. Essentially producing a road map until the circulating supply is back to its original state ?? just a thought or something along those lines. Using the yield bearing assets.
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The treasury also creates sizeable returns.
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Is it possible to put a list with the tokens we will be buying but not in terms of usd, just raw amounts? I think that would be best for the sake of transparency
Returns are not guaranteed here. What if we enter a bear market cycle for year and half?
As said previously, I’m fully supporting investment in other projects/protocols, but this is a basic market buy of assets for treasury, not purchasing a part in promising new dapp/idea/protocol.
4 Likes
The size of the proposed transaction is significant for the protocol. Can the team provide more detailed information to properly assess the proposal?
Ie.
- Valuations
- Dilution effects
- Anti dumping mechanics
- Expected return of the transaction
Abracadabra tokenholders are asked to absorb significant risks. Let’s not rush this.
Is this really the best use of treasury funds?
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Right. But those that want to invest in the returns of a treasury can buy $time.
The concern here is that the proposal forcibly and fundamentally changes the investment thesis for $spell and dilutes the token to acquire the assets of a crumbling Defi experiment
12 Likes
This would give MIM and sSpell a really unique opportunity and value proposition to drive consistent income to holders. Wonderland price has been incredibly volatile (Abra volatile too), but Wonderland has very quickly evolved into a cash generating machine that people misunderstand. At it’s current price we’d basically be trading MIM for the equivalent amount of cash flow generating assets.
Name another project that has demonstrated the ability to build a treasury of nearly $1B in 4 short months.
1 Like
Instead of this merger, let’s propose a different use of the remaining Spell to be minted: a burn! Much less dilutive to existing holders
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If we fix Abra’s projected weekly revenue at $2M/week right now, you’d need the $800M treasury to bring in about $2.4M/week to not decrease the sSPELL staking APR. This seems far from realistic over longer timeframes and doesn’t even take into account potential sell pressure of this newly minted SPELL.
7 Likes
Agreed, Just do it! Moving to a VC model for Spell, where you own some part of the treasury it’s great