MIP-0009: Recirculating Penalty Fees into Rewards

This is an awesome suggestion.

A few important points have been noted here which is that the MAHA rewards for buyers does add additional sell pressure to MAHA whereas burning MAHA adds deflationary pressure but it is much weaker than the sell pressure.

So you could see this system get gamed if the buy rewards suddenly increase and MAHA starts absorbing all the volatility of ARTH which is not good long term.

It is always ideal to be burning more MAHA than that which is being added back to the redemption pool. So the first suggestion of 45-45-10 is pretty good imo.

Further, since every month the community/ecosystem already gets a budget of 50,000 MAHA; it’d be more applicable for allocate some % to the rainy day fund (a fund used to protect the maha ecosystem from a rainy day as mentioned by @Ace in AIP8 (AIP8: Create a MAHA/ARTH trading pair and a rainy day fund);

So let us put to vote the following changes:

  1. 45-45-5-5 distribution; That is 45% burn of fees, 45% redirected back to the funding pool, 5% to the rainy day fund & 5% to the ecosystem fund.

  2. buy rewards to take from the 45% pool which is taken from the fees

  3. Change fees and rewards to be taken on price impact and distance from the target; instead of just using volume.

Moreover we shall keep these variables dynamic so that it can be changed at any time by governance if we find that the numbers are not working out.

I believe this proposal is good enough to be put up for a vote.

2 Likes