MIP #3 - Proposed Reduction of Smart WOM Converter Threshold from 95% to 90%

Abstract

Magpie is a BNB Chain native yield boosting platform that maximizes governance benefits on Wombat Exchange. Magpie offers WOM holders the chance to earn boosted rewards by converting their tokens into mWOM. mWOM is a liquid wrapped position of WOM that can be staked on Magpie to earn passive income. Magpie has designed a feature known as the “Smart WOM converter” in which users can get the best rate when converting from WOM into mWOM. Currently if the exchange rate of mWOM to WOM is lower than 95% on Wombat, the Smart WOM Converter will swap WOM into mWOM for users and they will get more than 1 mWOM for each WOM converted, the same for compounding. In this proposal, we suggest to decrease the Smart WOM converter threshold from 95% to 90%.

Motivation

Since the launch of the Smart WOM Converter, there has been no increase in Magpie’s veWOM balance. This is due to the current value of the mWOM peg being less than 95%. Every time a conversion is made, it automatically triggers the swap function, swapping WOM tokens to mWOM on the Wombat platform. By reducing the threshold of the Smart WOM Converter, Magpie can continue to accumulate more veWOM through WOM conversions, while keeping the price ratio between WOM and mWOM balanced. This would lead to more WOM rewards for Magpie’s depositors, and a greater share of voting power on the Wombat Exchange for vlMGP holders.

Specification

Lower the Smart WOM Converter threshold from 95% to 90%.

Current Smart WOM Converter Mechanism: https://docs.magpiexyz.io/mwom-token/smart-wom-converter