Yes, it allows members to sell at a reduced discount. That’s important if we want to improve sentiment in the short-to-medium term. The discount is 59.74% right now, so anyone wanting to sell takes a large hit on price. More importantly, they are selling below book value.
In addition to solving for the above, we earn 1% on every trade within the wNXM/ETH pool. We would likely provide wNXM single-sided on Uniswap and diversify into ETH as the price goes up, while buying back wNXM as the price goes down–all the while earning 1% of every trade. Deeper liquidity within a price range set above book value reduces the capital that members can arb out of the capital pool as well.
Having deep liquidity goes both ways, though. People can buy wNXM and people can sell wNXM. More liquidity means bigger trades can occur without suffering from large amounts of slippage.
Let’s face it, this would be a benefit to wNXM holders… Not really an economic risk to a community fund liquidity pool, more of a signal (when the time comes) that it is no longer required?