While automating these purchases from the capital pool in the medium term seems like a great idea and I wouldn’t want to discourage that exploration, are there any compelling arguments against starting to buy wNXM at the current discount to book value manually from the community fund as a proof of concept?
dfmerin’s idea would immediately lower the MCR%, halting the leaking of book value to bots … sounds like a no-brainer to me.
Could the investment committee not already do this with no further vote? Even if there are tax consequences on these small amounts, surely the capital gains tax on this is cheaper than the cost sustained by the mutual for letting the bots erode the book value instead?
Agree with most points raised here. 100% agree, that it makes sense to buy below book value, as well as do so in easiest way possible…
Maybe one way forward would be to create a snapshot proposal for the nexus community fund, and potentially task and pay the best fitted people to make progress on the best plan to execute on a buyback. I like the idea of the community fund starting to buyback smaller amounts as proof of concept, although I think it doesn’t hold eth as of yet right?
The community fund has ~342k of NXM and 97k of LDO and I don’t think we would learn much about the strategy by converting the LDO into wNXM.
I would support a snapshot vote to do so just from the perspective of upside for the community, but I think the learning would be negligible. All the blockers seem to be around taxes and process for the investment committee to take funds from the capital pool and the tax implication for the mutual.
can the community fund redeem NXM for ETH? (if not, is this something to think about?.. the investment committee would need to be allowed to redeem between say 95% and 100% MCR)
If so, it could redeem to ETH, buy wNXM, unwrap, redeem, and repeat…
this would avoid ‘taking’ funds from the capital pool, it may have different tax implications?
No, the bonding curve is the same for everyone, even the Community Fund. NXM cannot be redeemed for ETH when the MCR% <= 100%.
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