I have volunteered to write this proposal, with clarification and feedback by both the MahaDao team and various community leaders. I submit this as a ‘best effort’ representation of the community interest, and with the purpose of improving the MahaDao ecosystem to realize its goals.
This Proposal calls for;
- Trading for ArthX to be locked
- Reopening of the Debt Pool
- Repayment at $0.012/ArthX utilizing Fees and Maha Emissions
- The Removal of ArthX
- Price of Maha to be snapshot and used monthly to calculate repayment value
- 5,000 Maha/Month of Maha Emissions to be used for servicing Debt Pool
- The Debt Pool remains until it is paid in full, and is exempt from any future proposal that may call for its early termination.
- The Debt Pool will receive Fee’s to service debt at NO LESS THAN a base rate of 30% BUT CAN INCREASE HIGHER THAN 30%.
This topic has been thoroughly discussed within the community and supported by the MahaDao team. Let’s first take a moment to review the considerations made, and the conclusions that we have resolved. I understand this has been both a contested and controversial issue, and that the goal of trying to find what is in the best interest of both the community and project has not been easy to say the least. As we review the contents of this proposal I ask the community to reserve any bias, and consider the greater need - that is, the quality and success of our project, and the unification of our community.
With the new and improved model of stability (Vaults) - the prior use case of ArthX to function as an absorption of volatility no longer held relevance. It’s role was redefined as it became an accessory to the ecosystem with the intent of receiving fees. The new justification was that this would act as an insulation from Maha being classified as a Security Token. However, since then this line of reasoning no longer holds merit.
In light of consultation with Legal advisors, the option was explored to make MahaX fee-bearing - citing various competitors that are doing just this (Gov + Fee Token) . The response was that there is so much regulatory uncertainty, that this is a ‘grey area’ . Considering the Howey Test criteria, it is both vague and old - established in the 1930’s. All four checkpoints need to be valid for a security classification to be deemed. At a glance, you can see for yourself that this is something that most utility tokens could pass depending on the interpretation of it . What we can summarize from this, is that the risk of security classification is present regardless of ArthX existence or not. To further support this assertion, in both AIP 18  and the ‘Community Catch up’ Article for August  - it is clearly stated that MahaX will already be receiving fees (trading fees), which assumes the specific criteria for the Howey Test point 4, while already meeting conditions 1, 2 and 3. Thereby contradicting the redefined role of ArthX. Regardless of this AIP, the removal or continuation of ArthX - ArthX simply fails to achieve both its prior purpose and new.
Essentially, there is no longer a justified purpose for ArthX - it stands alone as an additional token in the ecosystem that appeals to speculator interest while extracting value from the merit of Arth and Maha. In addition, competing with Maha as a secondary speculation asset which disperses interest among our own community.
In recent news, US-Regulators are currently trying to pass new amendments around Crypto Laws that would classify any crypto into either a ‘Commodity’ or ‘Security’  The take-away message here is that attempts for compliance are likely to be less effective than a greater emphasis on decentralization and community governance. The risk is unavoidable, and ArthX does not and will not successfully act as an insulation from it.
Since Genesis, the majority of ArthX supply was burned away as users preferred to deposit it into the Debt Pool for a promised $0.012/ArthX. At the moment of listing, the price tanked dramatically, volume dried up and remained miniscule, while liquidity providers averted investment. Some months on now and things have not changed - price can be moved effortlessly yet there is insignificant demand to prompt this in a positive appreciation. The market is sensitive to even the likes of a single investor making small moves. This has led to a greater emphasis on how the community has reacted to any commentary around ArthX.
With high APY offered at over 200-300% it still fails to attract liquidity while products and pairs within the same exchange (and ecosystem) see much greater interest while offering much less APY. Simply put, most people do not want to touch it - they prefer Arth and Maha. This is evident by volume, liquidity, and community feedback.
Community members have witnessed a sense of inhouse rivalry develop since the inception of ArthX. The controversy and divided lines has often resulted in members lost, while discouraging the commitment of new members gained.
The conflict that ArthX presents is that it also diminishes clarity - new members are joining with a first impression of confusion. They enquire what it is they should invest in - which prompts the rivalry of existing members to approach them with a sense to ‘win them over’. This is not a good introduction to new members - that we attract them into the community, only to make them feel in the middle of a ‘tug-a-war’ match. Confusion, conflict, division, and controversy - this is the hallmark of ArthX to date, and arguably it’s most notable (yet unintended) purpose.
As mentioned above this proposal suggests the following changes, which I will supplement in greater detail;
1). Trading for ArthX to be locked.
ArthX has a feature integrated into it’s code that provides the option for transactions to stop - as verified by Steven . This can provide optional protection from significant volatility and IL to liquidity providers during the process of adding ArthX into the Debt Pool.
2). Reopening of the Debt Pool.
A requirement to fairly compensate ArthX holders.
3). Repayment at $0.012/ArthX utilizing Fees and Maha Emissions.
Standardizing the offering that was initially put forth when the debt pool was created. All ArthX supply + the existing Arth supply that is currently in the debt pool, become a single sized debt.
4). The Removal of ArthX.
With trading locked, LP providers can start to remove liquidity and move it into the debt pool which will remain open. Once sufficient time and liquidity has been removed, ArthX to be delisted from Arth website, Dfyn, and Cryption.
5). Price of Maha to be snapshot and used monthly to calculate repayment value.
The Maha price will be taken from a single snapshot each month, and the amount of debt reduced from Maha payments will be valued at this snapshot price. This ensures that we do not dilute the Maha supply due to the significant difference between current ArthX price and offering price of debt pool.
6). 5,000 of Monthly Maha Emissions to be used for servicing Debt Pool.
Maha has a monthly ecofund supply of 57,000  which is dispersed between liquidity pools (20k), DAO payments via Co-Ape (5,000 but changeable via vote). With the remaining to be used for various pursuits such as Incubation Projects, Listing Fees, Marketing and Development costs. The 5,000 allocation has been recommended by the MahaDao Founder.
7). The Debt Pool remains until it is paid in full, and is exempt from any future proposal that may call for its early termination.
This clause provides immunity and protection in the possible event that future token holders of MahaX seek to terminate the debt pool before it is paid in full.
8). The Debt Pool will receive Fee’s to service debt at NO LESS THAN a base rate of 30% BUT CAN INCREASE HIGHER THAN 30%
This secondary clause compliments the above by locking in a minimum base rate for fee allocation of 30%. This may be adjusted in future proposals to a higher rate, but not a lower rate.
It is recommended that a follow up AIP commence to decide the actual fee distribution rate
- The Feedback from Legal Team expresses no confidence in the classification of utility/security regarding Maha becoming fee bearing.
- Industry standard thus far demonstrates that our competitors are indeed offering a two-token system that combines Governance with Fees in one token.
- ArthX has failed to define itself with a legitimate purpose that is of necessity.
- ArthX has failed to perform well and attract adequate investment and liquidity
- ArthX has been the catalyst for significant disruption, confusion and division in the community.
- US regulators push for new Laws/Amendments that bring greater “Security classification” risk
- Team has recommended Removal of ArthX 
Thank you for your time, and also to everyone who contributed their ideas and input that has gone into making this proposal. Notable credit to Steven, Xof, Farhad, UL, Javaughn, Shilonki, S, Moon, Real World, Mirian, Ivan, CryptoMedic, Crypto Hutch, Geniusmillenial, Abs, Joey, and many more.
 Enquiry to Legal Consultant - Legal-Enquiry — ImgBB
 Response from Legal - Response-Legal — ImgBB
 The Howey Test - Howey Test Definition
 AIP 18 - AIP18: superMAHA: Locked MAHA tokens for better incentives and stronger governance
 Community Catch up Article for August - MahaDAO Community Catchup — August 2021 | by Gafoor Khan | MahaDAO | Sep, 2021 | Medium
 US regulators push for new laws regarding Security classification of Crypto - https://old.reddit.com/r/Bitcoin/comments/pr7fow/new_shocking_us_crypto_regulation_far_more
 Teams recommendation for ArthX removal - Steven-Input — ImgBB
 Option to stop trading on ArthX - arthxtradingstop — ImgBB
 Monthly inflation and distribution breakdown for Maha Spreadsheet - MAHA Token Distribution - Google Sheets