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.
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.
Thanks for the proposal. Would you be able to expand on the following:
What is the current value of Wonderland treasury? Different sources give $973M - wonderland web, $539M - treasury wallet, $261M Defi llama. How much wmemo will be converted exactly?
How do you plan to handle time/wmemo and spell volatility during the merge?
18B spell would be loaned by Dani & 0xMerlin for what purpose?
Where does that 98B Spell figure come from? It’s WAY too dilutive! It’s like market buying the treasury assets. At this point, we’re probably paying a premium to treasury for the bailout.
Where is a thorough M&A analysis?
We have seen Spell bleed and bleed. It’s unbelievable that deeply depressed Spell prices are now the basis for this acquisition, potentially causing enormous dilution.
Reduce the Spell amount, or it’s a hard no from me.
That $2M/week is just a rough approximation of Abra’s revenue over recent weeks, so that’s not taking into account any of Wonderland’s revenue. My point is basically that Wonderland needs to generate more revenue per dollar in its treasury than Abra generates per dollar $SPELL, or else we not only dilute the $SPELL supply, but also decrease our $SPELL staking APR.
Ive seen it mentioned before that wonderland farming strategies on average yield 1m a day. Spell revenue is 2m a week. Wonderland treasury essentially is bringing 3.5x more income and needs to be represented that way in the deal.
Im a holder of both.
I think even the pessimists misunderstand this proposal. This isn’t to bail out Wonderland, it’s to bail on their promise to buy TIME at backing price, which would use up the Wonderland treasury in the process. The only long-term wMEMO holders that truly benefit are the ones who are benefitting from the 0 slippage trade - ie the team/whales.
On the sSPELL holder side the trade is equivalent to using HALF our assets(doubling the supply, halving our market share of Abra) to buy assets at a premium(if they go through with the 40k wMEMO pricing mentioned) and essentially locking those assets in an incoomer contract forever. This again only benefits Abra WHALES - not frogs - who benefit from the 0 slippage treasury acquisition.
Please completely restructure the acquisition proposal so that it benefits the small holders of SPELL.
Another early Spell investor and I’m against the merge. Abracadabra has rock solid fundamentals, whilst Wonderland was always due for rapid growth and decline imo.
Spell seems undervalued against the wider market, making a buyout at these levels particularly unfavourable.
“We prefer to buy for cash, but will consider issuing stock when we receive as much in intrinsic business value as we give.” Source: ACQUISITION CRITERIA
The proposal is not sufficient for us to decide whether the above criteria is being met. We need to drill into the numbers. Without these, I see it as a rushed bail out where Spell holders are subsidising Memo holders.
In addition, we need to be extremely careful here giving Wonderland access to the MIM printer. If mismanaged, solvency of Abra and value of MIM at risk.
I disagree. It’s largely a WL bail-out. 2 points in support (acquisition terms):
Price basis for Spell: current market price ($0.008). Deeply depressed, meaning unbelievable amounts of Spell are minted to acquire.
Purchase price basis for wMEMO: >$44k. Really? Backing is now listed at $41k. And that includes SPELL holdings!
And it’s EXACTLY them keeping the promise to back wMEMO. However, it’s at the expense of Spell and sSpell holders!
Based on what Abra’s income is, Spell should trade substantially higher than $0.008. You can even take out Wonderland’s contribution to Abra’s income and still argue for a substantially higher fair value. In addition, the purchase price for wMEMO should be substantially lower. This goes in the wrong direction for Spell holders 2 times.
Abracadabra is a great project, with a clear roadmap and future, generating revenue and being a net positive for the holders, users and DeFi in general (as it provides a good service)
Wonderland was just an experiment, it failed and a lot of blood was shed because of this failure.
Combining a great project with a failed project will not improve the great project, it will actually bring weaknesses over to it. There are no synergies between the two projects other than common leadership and developers.
I think this proposal only makes partial sense if the Wonderland Assets are acquired at a big discount to Market Value, at least 30-40%.
I think a better approach would be to just wind down Wonderland, by distributing assets to the wMEMO token holders and be done with it. It will hurt a lot, but it is a much safer approach to protect Abracadabra from further problems and distractions that don’t add value to it.
I don’t support this proposal as it is negative for SPELL holders.
There are 3 reasons being cited for why the merger will create synergies, and I believe these 3 reasons are NOT actually meaningful.
Spell emissions will not go to zero - actually, what the merger does, is emit all remaining Spell in 1 shot, MAXIMIZING the pace of emissions, not stopping them.
The 2nd point is just some abstract rallying against VCs and mentions “efficiency” with no actual data or process changes mentioned
Investments and acquisitions can always be made, indeed Spell emissions are an investment in liquidity already…
Point 1 is just false, and points 2 and 3 are total nonsense. Spell holders need to reject this proposal or we will see astounding value destruction!
UST looped yield, a major part of Wonderlands income, is not sustainable. Degenbox was a raid on Anchor reserve which is now got less than 1 month runway. I second @WhenGeniusPrevail . We need a more detailed proposal and we must be business-like to make sure we issue stock when we receive as much in intrinsic business value as we give.
Before anything happens or a vote, Wonderland should figure out what they are doing to
Make those “whole” that lost when protocol did not work as advertised. Sifu has announced this on Discord. Before any valuations can be done, we need to know how much of the Wonderland Treasury will be used, and when those people are made “whole” if they will stay around or bail on Wonderland. As I am sure you all know its a certified shit show on discord right now.
Fix the protocol to work as advertised. Currently it does not. Twice in two weeks price has dropped below backing, triggering liquidations which if theoretically should not have been able to happen if systems worked as advertised. This is the basic premise of Wonderland and significant energy needs to be focused on that rather than a merger.
So, I say pump the brakes a little. I do like the idea of eventually merging, at the very least we need much more information and Wonderland needs to get thier stuff straightened out.