Currently with the new changes to Mahaswap, we can observe that the penalty fee while under target price has successfully discouraged further supply pressure the further we go under target price. However, in contrast to this, the reward for purchasing Arth while under the target price is rather minimal.
The maha fees paid are 100% burnt from the maha supply, however the maha rewards for purchasing arth are coming out of the ecosystem fund. Also, each hour there is a limited amount of rewards that can be allocated, and 5 maha or less appears to be the ceiling for each transaction.
What I propose is two-fold;
- 45% of the fees paid in maha (Selling while under target price), are burnt from total supply.
- 45% of the fees paid in maha, are redirected back into a funding pool that increases the maha rewards earned for buying arth under target price.
- 10% of the fees paid in maha, are added to the ecosystem fund to help with future development, marketing, and growth of both maha and arth.
What does this achieve?
- Greater rewards that incentivize buying arth on mahaswap when under target price. Rewards can be adjusted as equal to the fees depending on distance from target price.
- For example:
Selling 5000 Arth @ $0.80 wears a 400 maha fee. 45% of that 400 maha is burnt, and 45% is added to the rewards pool.
Buying 5000 Arth @ $0.80 rewards a 180 maha bonus (45% of the counter-part fee of 400 maha). This is paid directly from the rewards pool that is supplemented by penalty fees.
Maha rewards for purchasing arth under target price, no longer drain ecosystem fund, and are no longer limited to a fixed amount per hour - but rather in balance with accumulated fees from sales.
Maintains the same level of discouragement for selling below target price, while utilizing any selling as “fuel” for the incentive to buy arth under target price.
Whilst extra maha rewards may place downward pressure on maha price, in an equal sense, the burning of maha supply counters this (45% burnt of fee & 45% of fee redistributed to buyers).
Thank you for your time reading, and please feel free to give your input.
Based on similar question coming up. “How do we pay the buyers once we are already below the target price? e.g. implementing it while price is below target”
We implement it once Arth has returned to the target price. This allows opportunity for the rewards fund to ‘fill up’ with any price depreciation prior. Fill the fund up with 45% of the fees, and that is used to pay the rewards for buying back up.
With these variables consistent - Volume, Price Point, Price Impact
-The seller pays 100 maha fee, 45 maha is burned, 45 maha is sent to rewards pool, 10 maha is sent to ecosystem fund.
-The buyer who does the opposite to the seller in terms of volume, price point, price impact - they receive 45 maha.