Hi,
There isn’t a security issue here, all parameters are hardcoded in the contract. I hope it has been tested for more than one set of params, and in the case of an extension of the RAMM, we could mainly redeploy the same set of contracts.
Let me share some data that I analyzed. I wanted to have a better understanding of the capacity and demand for RAMM until the end of the fast period. I hold a significant stake and I am getting quite anxious that I will not be able to sell my NXM within a reasonable range below BV. The idea of spending countless hours in front of my computer swapping every 10 minutes, rather than providing liquidity and waiting for the RAMM bots to eat it up, coupled with the feeling that the RAMM would fall short of absorbing all willing sellers, meant I had to crunch the numbers.
I went through the top 100 holders of NXM and wNXM, and I added up all the holders that either (or)
1/ bought after the announcement of the tokenomics revamp
2/ sold to RAMM
3/ approved their NXM to the RAMM contract
4/ sold wNXM during the last 365 days
5/ provided liquidity in a range within 7% below BV
I excluded all wallets that had not been active for >365 or are known team members.
The total of NXM/wNXM holdings of these wallets is ~1.3M.
At this moment, the RAMM fast period can absorb ~994k NXM at 5% below BV. This means that the remaining wNXM/NXM willing to exit will need to wait ~66 days after the end of the fast period (6500 ETH, if swapped 5% below BV).
Note that I didn’t include holders out of the top 100, meaning wallets with less than 1500 wNXM/NXM were not included. I also didn’t include exchange wallets, where we could estimate that the same corresponding % of holders are willing to exit (~35%). This can be very impactful, especially in the case of Binance, because their wallets have >200k wNXM, so this would add 70k NXM to the exit demand. Please also note that if any dormant wallet woke up, this would cause increasing pressure on the RAMM capacity, and some of them have huge holdings.
It feels very awkward to observe that the missing capacity (~6500 ETH) is below what Nexus Mutual leading investor decided to sell to RAMM without previously participating in the tokenomics discussions or even expressing their intent to the team.
Overall, I am very worried and don’t think the fast period will end up as a celebration for anyone who had the intent to exit and ended up trapped.
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We all understand how governance forums work.
We all understand who has which incentive here.
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The team wants to keep ETH in their treasury.
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Past holders and new capital, who bought below BV, want to exit at a fair price, according to the treasury value and equivalent’s BV.
It’s clear now that the ETH in RAMM will not be enough. The team needs to start listening to their community (composed by token holders who just want to exit and composed by token holders who do not want to exit and want to continue to get involved in the protocol) and do whatever the majority decides upon.
If we go to a vote, we will clearly vote to increase ETH available for redemption.
Please, team, don’t drag this further than it has to be; don’t force a pointless bureaucracy, stop this sham. Please, increase ETH for redemptions so that people who want to exit, can do it properly and without incurring a mass slippage loss (which from time to time, looks like an intended instead of an unintended situation). Nexus will keep functioning after people get out.
Demand to exit is greater than the offer to exit. Should we not make these two equally aligned?
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@aleks I’m really glad that you don’t feel a need for parameter changes after you already dumped a HUGE bag of NXM on the RAMM without previously expressing your capacity needs in the leading governance discussion. Your opinion really adds a lot to the conversation.
I think it it somewhat ugly that the team is resisting adding more capacity to the RAMM. @Hugh and @Rei are who provided the “no VCs will redeem” argument to the original capacity estimate discussion, while constantly trying to push down any proposed capacity suggestions that they deemed too high.
It’s pretty obvious now that there is currently not enough capacity, after VCs gobbled up a huge chunk of the fast allocation. The current process is stressful and PvP. Without any parameter changes this is not going to end on a happy note and will likely blow up in governance and in public for months to come.
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If the goal is for Nexus to be able to move forward focusing more on product and profitability, and move the conversation beyond treasury, having an underfunded RAMM is going to delay that shift in focus for a long time.
if we increase the budget now then everyone who redeemed already should get some eth to compensate them. they played by rules that were given without the information that the budget would now be changed later to benefit everyone else. there was 0 nxm voting against this budget in the recent proposal, so it looks like now people voted in a smaller budget to cause people to exit at a lower price to be safe, with the plan to increase book value for them after they then vote to increase the budget later (this is now happening). It would be unfair to change the rules of the game now. The idea was always that you can exit early at a lower price to be safe and guaranteeing a fast exit or you exit later with 100 eth per day liquidity but a higher price. Not both of these things, especially not after so many already exited at a low price understanding the original rules. If there is a change to parameters then there should be claimable eth for those who exited at an unfair lower rate based on the rules we are working under now!
Nail. On. The. Head.
These are the top VC minds in our space?
No we shouldn’t compensate anyone (including myself I sold 60% of what I intended @ 95% BV). That’s just cope.
then we must let everyone play by the rules that were given to everyone. otherwise compensation is relevant for the rule change.
Of course not. If you dumped below BV, that’s your problem. Compensation… can you imagine? People who did not sell also did understanding that rules might, can, would change. If you decided to get liquidity earlier, that’s your problem. Anyway… isn’t this a DAO? If you’d like that, then make a proposal. Tokenholders will tell you no, not me.
We should increase RAMM ETH treasury. It’s not enough, and given that VCs are dumping and that token holders want it, it will eventually have to happen. I urge the team to be reasonable and not waste everyone’s time.
If you don’t dump before the fast liquidity ends, that’s your problem. A rule change… can you imagine?
Anyway… isn’t this a DAO? Oh, it is and we voted for these rules. Tokenholders told you the rules, not me.
No, it’s not a material science. The initial budget was an estimate with very little data available regarding the actual redemptions. It appears that this was underestimated, so now we can discuss an extension. This is very common, and there’s nowhere written that “rules can’t change”.
Regarding people exiting currently at a lower BV, they are trading time for money. Everyone can participate in this discussion to increase the budget, or sell.
Would be healthy if we focused on the data and constructive conversations rather than feeding an obvious troll.
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The parameters of the RAMM and its liquidity sizes were voted on based on assumptions of how much of the wNXM supply wants to exit the mutual, as evident by the amount of ETH already redeemed and onchain data showing Vc’s and other big holders aggressively redeeming their tokens, these assumptions were wrong by a significant amount.
Current paramaters are not fair to holders who wish to exit at a fair price, as they are effectively trapped with so much of the wNXM supply wanting to redeem for very small amount of available eth. It seems quite shady that the team isnt willing to change paramaters to let people out at a fair price even though they have more than enough capital to allow people to leave fairly.
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