To figure out the best approach to getting ARTH back to and above $1, we really need to understand how we got to the current state of ARTH, where it’s under $1, a backlog 736,000 ARTHB waiting to be redeemed, and a surplus of bonds with few buyers stepping up.
Not only do we need a solution that will help the project get to an expansion phase, but one robust enough that it is capable of handling and shortening future contraction periods. I mentioned a few ideas in my other proposal, AIP6.
ARTH is under $1 and few people are buying bonds so there isn’t a way to bring the price back to and above $1 outside of waiting it out.
However, ARTH is worth $1, the current peg. Buying below $1 is like buying 1 USD at a discount. People will buy ARTH below $1 and sell as it get close to $1 which negates the effect of bond buyers.
How do we make ARTH more attractive so that people are willing hold it and even buy it above $1? We really have to ask, what can ARTH do for you? Right now I don’t think there’s a strong reason to buy ARTH above the target price, which is why we’re in a extended contraction period, one where bond buyers aren’t willing to step up.
When ARTH is over $1, people are incentivized to sell and buy back when the price is below $1. This causes a constant cycle of downward pressure on the price. When we’re in an expansion phase, ARTH holders aren’t rewarded unless they provide liquidity with their ARTH, but providing liquidity isn’t a risk free endeavor, due to the risk of impermanent loss. Selling your ARTH for DAI makes much more sense since you can still retain access and use of the funds.
The solution to this is very simple. It’s already being used by ARTH holders who bought at a discount and are waiting for the price to get to $1 to sell, which will push the price down.
There’s currently a pool to stake ARTH for MAHA with 900k ARTH being staked. I have noticed that the amount staked has more than doubled since the price of ARTH dropped below $0.90. Most of the ARTH will be unstaked and dumped when ARTH gets near $1. What can we do to entice them to continue staking longer? We need to increase the rewards for the pool or create additional temporary pools when people aren’t buying bonds.
The current pool awards 4000MAHA over 30 days, which is roughly 133.3 MAHA awarded each day, pro-rated to the stakers. The pool currently holds 900,000 ARTH and each additional staker dilutes the rewards. There are currently 3,500,000 ARTH tokens outstanding. If we triple or quadruple the pools/rewards, it will soak up all the available ARTH. It’s a temporary measure, but it’s an easy fix and great marketing as well. I doubt the stat page is updated but we’ll just use the listed number of 150% annual rewards for staking ARTH. If we 3x or 4x, we can advertise 450% or 600% annual returns paid in MAHA, a very undervalued token. Who wouldn’t be excited about that? I know I am. If additional pools are opened. I personally will buy ARTH well above $1 to get 450-600% staking rewards in MAHA.