With the wNXM purchases close to completion it makes sense to think about what steps, if any, would make sense to help the original aims of Operation TM12 and be value accretive for the mutual. There has been some discussion on Discord but I think there are some questions that would be useful to address here:
- Is there room to allocate further capital pool to the buyback? / What is the MCR% that members are comfortable operating at which enables the mutual to be able to cover existing potential liabilities whilst also considering future growth enabled by Nexus v2 etc?
The capital efficiency ratio is currently considerably lower than during the late 2020 - early 2021 period and I struggle to see the catalyst for this increasing pre v2 but I don’t have a good feel for how far below MCR we could go without endangering the long-term health/potential of the protocol so will defer to those who have thought about this more deeply.
- If it’s deemed too risky to lower the MCR% further, would it be beneficial to allocate investment earnings from stETH towards continuing the buyback on say a quarterly basis?
Related to this, any update from the investment committee in relation to what needs to happen for additional capital pool to be staked would be gratefully received.