Right now we have three things the protocol does based on the price of Arth.
- Mint Arth for Arth B holders to redeem.
Now the third case is something which can and should be automated because it is based on the 1 hr TWAP of ARTH. So instead of manually checking the price every 1 hour and having issues to redeem it (Ex :during epoch 12 where the button doesn’t work) I would like to propose an Arth- ArthB pool where Arth B holders can stake their Arth B tokens and farm the freshly minted Arth meant for Arth B redemption.
The issue is the stability fee for maha which is currently paid while redeeming so I propose to make a change where the stability fees in Maha is paid while buying the bonds instead of when selling it. An alternative to this option would be to pay the 1% stability fees while claiming Arth from the Arth-Arth B pool.
Basically to buy arth B you will pay dai plus 1 % of fee in maha or you will claim your Arth by paying the 1% fee. Either way we will be able to collect 1% of fees in Maha which will be burnt
This would allow the following,
Fair distribution based on your percentage of Arth B tokens. Whales with deep pockets right now can easily spike up the Gas prices or use bots to take the arth allocated for redemption each time leaving other bond buyers no chance to redeem their bonds since the Arth minted for redemption is significantly less than the Arth B available.
No one needs to check the Twap 1 Hr price constantly to see if they can redeem the tokens. People from different timezones need to sometimes stay up or monitor the 1 Hr Twap just so that they can have a slim “chance” to redeem their Arth B.
Reduces the complication with regards to the Arth B redemption and issuances. For example now you just buy the bonds when they are made available based on the 12hr Twap at the time of contraction and then add it to the pool. Later you just go to the pool to claim your Arth. When you claim your arth, the arth B tokens are automatically burnt. Every time the 1hr Twap is above 1$ the ARTH-ARTHB token is seeded with more Arth from the minted supply.
The farming rate should happen based on the Arth 1hr Twap
- if the Arth 1hr Twap < 1 the farming rate should be reduced.
- if the Arth 1hr Twap>= 1 the farming rate should be increased.
To make things even more automated. When the bonds are being bought they should be directly added to the ArthB-Arth pool by doing an extra transaction. We already have something similar when redeeming the bonds for Dai, the protocol sells the arth for dai by doing an additional transaction. In a similar fashion, we need to do an additional transaction of adding liquidity to the Arth-Arth B pool.
Conclusion : Implementing this proposal would not only keep the whales at bay and ensure an easy and fair distribution but it will also make the UX much better. Arth has shown that it works and the protocol is a gem so all we need now is to bring more users on board, make the whole process easy for them. As far as I know, its the complexity of the tasks , understanding of the protocol and dominance of whales and bots that is keeping users away from buying bonds. this proposal or change fixes all the above mentioned problems.