Liquid Stake mWOM token

Magpie 3. Community Ideas
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Hi Magpie Fam,

Again, this is gonna be a really long post. I really like to draft any crazy idea in my mind for the new protocol like Magpie, it’s full of possibilities. After this post, I might open another new post to consolidate all the ideas that I had already posted.

Alright in this post, the idea I would like to present is so called : Liquid Stake mWOM
Yeah, as the name given we shall allow users to lock their mWOM token to receive LmWOM ( Locked mWOM) at the prevailing exchange rate.

If you’re familiar with BNBx, then you can easily understand this Liquid stake concept. LmWOM will be the liquid token that represents your share of the total locked mWOM pool deposited in Magpie.

As soon as you lock mWOM on the Magpie smart contract, you receive newly minted LmWOM, based on the exchange rate at the time of locking. As the WOM rewards get added the value of LmWOM increases with respect of mWOM.

What is the LmWOM exchange rate and how does it change?

The exchange rate represents the total value of the Locked Pool for every LmWOM in circulation.

Exchange Rate = Total mWOM in locked pool / LmWOM in circulation

At launch, the LmWOM exchange rate is initialized to 1. When rewards are added to the pool, the LmWOM:mWOM exchange rate will increase.

Where is the rewards come from to increase the LmWOM exchange rate?

Answer is simple: WOM rewards from Wombat Exchange. According to Alan, last month our LP helped generated 600k WOM revenue, and 12% of it (72k WOM) being distributed to mWOM stakers.

So, with this LmWOM concept, this revenue could be converted into mWOM and accumulated & compound as rewards added to LmWOM, resulting in increase of exchange rate.

What more? I highly recommend such WOM-mWOM conversion to bypass Smart Converter to produce new veWOM in Wombat to keep us up in WOM war all the time !!!

Now you see it? Hope you guys still following me, this is not even half way of my idea…

To make it short, here’s some quick points added to this idea:

  1. Current mWOM staking pool to be maintained, but no more MGP rewards. So it allow users whom prefer WOM only rewards to utilize this staking pool and it’s not locked. However, the WOM rewards will be slight reduced as more rewards shall goes to Locked pool. For example, WOM APR drops from 20% to 15%.

  2. Magpie shall allocate some of the staked mWOM (not locked) to stake on Wombat directly to earn some WOM emission. Thanks to voting gauge mwom pool in Wombat is now emitting WOM, and could be boosted by veWOM, and Magpie got 9M of veWOM !!! However, such allocation has to be monitored from time to time to maintain healthy coverage ratio & peg in the mWOM pool of Wombat.

  3. New Locked mWOM pool still receive MGP rewards but drop to 0.2 MGP/s (is 0.55~0.6 now) Meaning that if the address holding LmWOM then he/she can still receive MGP rewards, unless LmWOM is being used to stake/lock in other Defi protocols.

  4. Yes you heard it right! Other Defi protocols! Once users locked their mWOM, they’ll get the same value of LmWOM, and can use that on other Defi protocol to maximize the earning while the LmWOM exchange rate keep on raising! That means the opportunity is unlimited.

  5. Reserve 0.05 MGP/s for direct emission into WOM UP pool, that is possible now as we reducing the MGP rewards in abovementioned points. The main goal is to let the WOM UP party open all year long.

Here’s the table to conclude some points from above:

rewards
rewards829×147 4.25 KB

  1. The mWOM pool in Wombat is gonna be 3 pools design, including WOM, mWOM, and LmWOM. This is to give liquidity to LmWOM users, and they can earn additional rewards from Wombat.

  2. We can then switch some MGP emission to Wombat, propose total of 0.8 MGP/s (is 0.45 now). Refer Table for the detail proposal:

image

  1. 2 weeks of unstaking & unbonding period.

Why I think LmWOM is needed?

Because I think it helps to create demand for mWOM, no matter what’s the user behaviour, mWOM will always be the token in demand.

image

Here’s the pros & cons of the LmWOM:

Pros:

  1. LmWOM holders can use the token on other Defi protocols to maximize the earning
  2. Easier for Magpie to build its ecosystem with LmWOM
  3. Development of LmWOM ecosystem will push mWOM demand
  4. WOM rewards converted into LmWOM and bypassing smart converter, generate new veWOM from time to time
  5. LmWOM/mWOM exchange rate increases as the WOM rewards accumulated & compound.
  6. LmWOM price is based on the Real Yield from Wombat exchange
  7. 2 weeks of unstaking & unbonding period to enhance the security by allowing bigger time for response in case of abnormality

Cons:

  1. More difficult to maintain liquidity, coverage ratio & peg of the mWOM pool in Wombat exchange.
  2. Could be hard to implement?? I not sure, I am just a planner, not technical personnel lolz. So, YOU tell me.
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Update 27/1/2023

Point #1 & 2 are no longer valid as Magpie open the mWOM pool (wombat) on Magpie, then my suggestion (based on LmWOM idea) is to remove Magpie’s Stake mWOM pool, leave only LmWOM option.

And since LmWOM will also available in wombat pool (3pools design), then we can maximized utilization of the veWOM that we have, as total mWOM TVL will be separated into mWOM & LmWOM, then APR would be remained high or higher