AIP19: Stop ARTHX mint function and make ARTHX the fee bearing token for the entire ecosystem

TLDR:

  • Disable the mint/redeem with ARTHX
  • Make ARTHX earn 50-100% of the fees from all the MahaDAO products
  • Keep the deflationary ARTHX mechanics
  • (optional) Introduce an ecosystem fund which will collect 10% of all the fees

In this proposal, we’d like to recommend the following changes to the ARTHX token. Previously the ARTHX token was the token designed to absorb the volatility of the ARTH token, making ARTH meet the 110% collateralization ratio and the target price of 2$.

With the introduction of the new ARTH loans product, there will be an alternative method to mint ARTH which is less risker (as the minter will not face any risks on the ARTHX price) and will achieve the same level of stability that ARTH currently has.

This effectively means we can greatly reduce the negative sell/mint pressure on the ARTHX token.

By removing the mint function; we make ARTHX completely deflationary and also avoid the risk of a possible Soros attack (which could cause a bank run) on ARTHX.

This also means that the current distribution of ARTHX will over time get concentrated to the existing ARTHX holders but that should not cause any harm to the ecosystem (excluding the price of ARTHX) given that ARTHX is not used for voting or governance of any kind.

Furthermore, as the core MahaDAO team builds more and more products that will continue to generate fees, we suggest making ARTHX the central token for all fees that will get collected across all the chains.

Adding on to this, by recommendation by various advisors and economists, we also propose splitting a portion of the fees collected to an ecosystem fund which can be used to further fuel the growth of MahaDAO and the various products.

With the point mentioned above, there are two possible scenarios on how the fees get distributed to ARTHX holders given the fact that there is also a debt pool that needs to be paid back up.

Scenario 1: There is no ecosystem fund

In this case the fees given to ARTHX holders will happen in the following distribution

  • When the debt pool is active: 50% will go to the debt pool and 50% will go to the ARTHX stakers
  • When the debt pool is fully paid off: 100% will go to the ARTHX stakers

Scenario 2: An ecosystem fund exists taking 10% of all the fees.

  • When the debt pool is active: 50% will go to the debt pool, 10% will go to the ecosystem fund and 40% will go to the ARTHX stakers
  • When the debt pool is fully paid off: 10% will go to the ecosystem fund and 90% will go to the ARTHX stakers

Once discussed the proposal will go live for a vote on Monday Aug 9th at 3pm GMT and the vote will last for one day.

  • Approve with Ecosystem Fund
  • Approve without Ecosystem Fund
  • Reject

0 voters

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I believe it also might be beneficial to allocate some of the fees towards providing liquidity for Arthx. Extra liquidity will be necessary especially with growth of the Arth ecosystem and increasing fees that will be generated in the debt pools.

I would suggest an allocation of the fees in either situation to provide incentives to liquidity providers paid in arthx (maybe 10%), or just straight into liquidity pools themselves.

I’m in favor of Scenario 2 - However my suggestion is a change to the split of fees as follows;

When the debt pool is active:
37.5% to Debt Pool, 42.5% to ArthX, 20% to Ecosystem Fund

Reasoning for increased fee allocation to debt pool from 25% to 37.5%:
The debt pool is essentially filled with early adopters. Furthermore, ArthX committed to the Debt Pool does not qualify to earn fees while it is being paid off. Many will likely reinvest debtpool repayments back into ArthX or Maha.

Thanks.

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My Scenario 1 -
When the debt pool is active:
*50% to Debt Pool, 50% to ArthX,

Reasoning for increased fee allocation to debt pool from 25% to 50% :
The debt pool is essentially filled with early adopters. Furthermore, ArthX committed to the Debt Pool does not qualify to earn fees while it is being paid off. Many will likely reinvest debtpool repayments back into ArthX or Maha.

2 Likes

1-)ArthX Stakers must earn.Arthx Farmers must not earn.
2-)Arthx Liquidity Provider must earn more for example %50 more

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I am also tending towards an @Michael or @catexozcan distribution.

However, my favourite proposal would be the following distribution:

40% Dept Pool
40% Arthx Staking Pool
20% Ecosystem

(And 80% Arthx Staking Pool, 20% Ecosystem, after repayment)

  • The Dept-Pool mainly contains funds from loyal Maha supporters, whose funds have been blocked for months. A large part of it will go back into MAHA (superMAHA), Arthx and Arth and support the project.

  • 20% for the ecosystem will surely be a big enough sum to make some things happen.
    At least 50% of this should go into providing Arthx liquidity (LP) in the early days (some % long term). This ensures that Maha does not have to continuously increase the incentives (rewards) for Arthx liquidity provider in order to ensure Arthx liquidity, as Maha itself provides Arthx liquidity directly through its revenues and fees. Otherwise, LP incentives must be constantly increased (to maintain liquidity) and superMAHA and Arthx holders would constantly fight over how much revenue goes to the stakers and how much goes to the LP. This is a pre-programmed hotspot of conflict. And this conflict can so be prevented from the beginning.

2 Likes

"Disable the mint/redeem with ARTHX" should NOT be up for a vote, it MUST be done to fully transition to the new ARTH loans product, else, and if the proposal gets rejected (although highly unlikely), we will have a situation where users can mint through the old mint/redeem system and through the new loans system as well, we could run into risks that are hard to foresee at this moment.

This proposal should only discuss how fees will be distributed under the new and future products, disabling the old mint/redeem system is implicit.

Don’t get me wrong, I do get that this is DAO, however, I think that at such an early stage, the team should take critical pivot decisions like this, and once all the core mechanics are in place let the community run it from there.

Now, moving to the fees discussion, I agree with the proposal from @LongWay.

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i agree your ideas. “Disable the mint/redeem with ARTHX” should NOT be up for a vote. it must be directly

I would be careful with such a large allocation of fees back to the debt pool while it’s active. I firmly believe Arthx should have at least 50% of fees or it will prove less useful to the ecosystem and at higher risk in the future. People are already being highly incentivized to these pools as it is interest free. Not sure it needs much more incentive than that.

I’m in favor to keep 25,25,50.

2 Likes

when will begin? aip 19

Which ever is better for ArthX price appreciation.

Based on the above discussion points , if could be concluded as follows :

  1. Initial priority being given to debt repayment ( increase the fees due to debt repayment) - Those who converted arthx to debt were the first adopters and they might also want to remove their arthx from debt pool, especially if the price of arthx exceed $0.012.

  2. One of the main concern with ArthX is the lack of liquidity, so it would be best that the fees be split 80:20 to farmers and stakers . The LP to be prioritized should be the Arthx/Arth pair maybe followed up with ArthX/maha LP.

This is not really a summary of the discussion.

To 1.) Yes, Dept Pool repayment should be given more priority. But that people can take Arthx out of the pool again would only make the whole thing more complicated again and many people would probably only realise weeks later that they would have had this option. In addition, the Arthx supply would increase.
(You can also buy Arthx again with the repayments from the Dept Pool if you want to).

To 2.) It is not about giving more fees to the LPs and much less to the stakers. That creates conflicts. This is precisely what we are trying to prevent! The fees should go to the stakers and Maha should make LPs directly with a part of the income. In other words, Maha should provide some of the liquidity itself instead of attracting LPs with more and more fees.

Your content has been noted however wish to reiterate the following:
1.I too am against people asking back their arthx from debt pool. But as soon people note a significant price increase in arthx , they will demand to have their arthx back especially the Genesis participants. To avoid this better settle the debt off asap before implementation any strategy that might see arthx go above it’s listing price.

  1. For one i’m sure the team would like to see it’s LP’S grow organically. The best way would be to reward them as they will be taking a higher risk compared to stakers. Also in the view arthx was meant to supplement Arth. Why not attract liquidity to the arthx/arth pair along with other stablecoin pairs, there by giving some use case for arth.
    After all when we introduce vaults , sufficient liquidity is required to swap arth with other stablecoin…

I think this would be win win situation.

So guys,

This proposal will now be up for vote. I’m in favor of giving a little less to the ecosystem fund since the ecosystem fund already receives a monthly budget of MAHA tokens.

Whether to put this proposal for a vote or not it is a must that such changes go through the governance; Because otherwise there would be no meaning of the MAHA token’s utility for governance. However I encourage the MAHA token holders to pass this proposal in interest for everyone in the MAHA ecosystem.

The debt pool is something that needs to cleared off in priority; so increasing the % given to the debt pool is a welcomed amendment. Moreover in this scenario, the debt pool holders should be given a priority.

So the final proposal will be

  • 50% debt pool
  • 40% ARTHX holders
  • 10% Ecosystem
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Please redo this! Let’s break AIP19 down into more digestible pieces so it will pass. Thanks!

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