Great community call today - was nice to see this idea discussed in an open forum. I wanted to say one thing as we begin the next phase of ‘research’ on this. While the OTC / one person buying ideas are practical in getting this rolling, they are not long term solutions in my opinion. Yes, this will lead to the fund buying back wNXM and, yes, it will send the appropriate message to the market, but it lacks scalability, efficiency, and isn’t truly decentralized.
I know dev resources are a bit constrained at the moment, but what about beginning to design a contract where there is:
- Some deposited ETH (surplus given the current coverage)
- An oracle on wNXM price
- A calc function for the book value
- And an automated exchange ratio of ETH<>wNXM
Thus, we have this contract that is automated and decentralized, which will buy wNXM as long as the price is below the ‘book value / unit’ price. The onus would be placed on traders / arbitrageurs to find wNXM on the open market (even at centralized exchanges like Binance), buy it there, and then bring it to the redemption portal to exchange for ETH. In this case, we don’t have to rely on community members buying it OTC or from exchanges - rather, profiteers will come to the mutual looking to sell their wNXM.
There are some limitations to this idea:
- Introduces smart contract risk
- Will still be some deviation from full book value due to gas costs / oracle costs
Let me know what you think about this broad outline for a decentralized way to conduct the buybacks.