Reform of the "ADA distribution to WRT holders" proposal

DAO Proposals
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Greetings to everyone!

Now that the launch of V2 is approaching, I would like to open a discussion thread to hear the ideas that the team or anyone may have to modify this already approved proposal for a possible vote for its amendment.

ADA distribution or WRT buyback?

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From what’s been said in past discussions the regulatory concerns remain specifically with rewarding WRT depositors with Ada directly. Now is there a way to implement this in a way that does something else than direct Ada rewards, or that eliminates this concern, then that would be the way to go I believe. The team is committed to implementing any and all DAO decisions provided they don’t risk the future of the platform.

I personally like the idea of a buyback program and it’s something that has been proposed in the past, we need something like this, be it a buyback or implementing the already passed proposal asap, so there’s some sort of path forward for WRT and Wingriders DAO. One or even better, more strategies to ensure future growth and durability.

Let’s leave this discussion open for now, wait for team to finish V2 mainnet work first and continue from there.

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I would prefer a WRT buyback for simplicity reason and refilling of the treasury for a reward loop given LPs.

Cant argue any regulatory concerns given direct ADA drops for WRT holders - is it possible to point out, where the problem lies within this idea?

Genius is also “dropping” Ada and other tokens for claim on ther EARN page for stakers - so either they are regulatory incompliant, or there should be ways to implement a direct ADA reward for token holders (maybe only for WRT in the vault and as a claimable reward with the other farming rewards, so it would mirror genius logic).

Anyway, Im fine with both variants, but as I layed out in Discord a while aog, I still argue, that WRT needs an updated utility with rewards (even if they seem low), as the token price is bleeding from inflation and provider need to be incentiviced somehow. The current utility is not enough to counter the bleed, as (while nice to have) the governance and the launchpad utility does not counter the inflation. The first, because governance is only usefull, if you can vote for rewards (as already proven by this discussion) and the second would need some launching products, but currently they seem to go on lther launchpads.

Anyway, if other have something to add, or to explain, why there would be regulatory concerns that do not already apply by running a DEX itself, would be quite welcome.

So, my proposals for implementation would be:

If in ADA:

Give Ada in the Rewards sections for farming holders for WRT in the vault

If with buyback:

Just buy back on each epoch (or once a month/week) on an automatic level and show the buybacks on the weppage with the amount in the treasury, so people can see the increasing buybacks (if it works as intended). Could be coupled with a nice automatic overview in the social channels, like the farming epoch message.

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GM! We already have V2! Now it would be great to follow through on the proposal approved by the DAO either in its original form or amended if it is for the good of Wingriders. Does the team have any suggestions for reforming the proposal?

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I would also like to propose that WRT staked as LP WRT-ADA also generate their share of the fee percentage to the same extent as WRT staked in the vault and with the same momentum as FT (x1.05 - x1.10 - x1.15). So, to give a simple example, if 1000 ADA is generated from the swap fee change and there is 5000 WRT staked in the vault and 5000 WRT staked in LP WRT-ADA, then 500 ADA would go to reward WRT in the vault, 250 ADA would go to the LP WRT-ADA pool along with another 250 ADA that would be used to buy back WRT and enter the LP WRT-ADA pool with the ADA. All this assuming that the rewards are distributed in ADA because it is possible that the DAO may propose and approve a modification to the initial proposal to replace ADA with a WRT buyback.

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@techrider discussion thread here on discussing alternative options for the previously voted proposal on distributing additional rewards for WRT depositors. e.g. some form of Ada distribution vs WRT buyback program

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Hey TNT!

I just wanted to drop here some thoughts about the two possible options that are being discussed.

For the ADA Distribution:

  1. V2 is out, so now we can change the fee structure of a liquidity pool. So Adjusting from 0.30% for LPers to 0.27% is possible, so no changes in this area is needed;
  2. Change the part that suggests sending the ADA to a vault to then be claimed by users to “send ADA directly to user’s wallet”. This will improve the UX and also make it cheaper (no execution of scripts on-chain and no harvest transaction fee);
  3. Change the distribution frequency to every 6 epochs. It’s still a good frequency and we’ll end paying less fees;
  4. This isn’t just a simple modification, so we need to consider the dev time (a scarce resource) that’ll be spent implementing this proposal;
  5. As far as I know, distributing ADA (or any other token) for holding WRT (locked or not) is a legal gray zone that the WR team will probably want to avoid (can potentially turn WRT into a security).

For the WRT buyback program:

  1. As @krebsmenschen said, it’s simple and can refill the treasury to extend the LP rewarding;
  2. Will probably need way less dev resource to implement it;
  3. No legal issues;
  4. Tax optimized, as users won’t need to pay taxes for receiving tokens (the majority of countries taxes dividends).

As always, I’m open for the discussion.

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As always, Lucas, your answers are exquisite. After reading the pros and cons, I’m leaning towards the repurchase of WRT. Now it would be interesting for the team to explain their point of view and the details of the process so that it would be more efficient and easier to implement. I continue reading contributions. Receive a big hug!

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I would like to take advantage of this opportunity to propose that at the time of the harvest it could be determined which WRT comes from inflation and which comes from buybacks

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That is, they were two well-separated flows.

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