RIP #16 Enable claiming of the treasury while benefiting holders

Voting ended about 4 years agoSucceeded

As of writing this the price is currently at 2.95$ and the backing per $RUG is at 11.41$. Since there is a huge disconnect here I propose that we enable people to get an exit by introducing a new, non time bound, core mechanic to $RUG:

Claiming

Every $RUG would be able to be claimed from the treasury for part of its backing. The important difference to a generic buyback or redemption is that fact that only PART of the backing can be claimed by trading $RUG to the treasury.

I propose we return a 70% share of $RUGs current backing for every $RUG claimed. 10% of the remaining 30% would then be used for Buybacks and Burns from the Exchanges to push price above the backing and help incentivize bonding. The remaining 20% will stay in the treasury and thus push up the backing of each remaining $RUG Token.

Effectively that rewards $RUG holders with a higher backing the more $RUG is claimed while also enabling the market cap for $RUG to never drop below 70% of the treasuries current holdings.

For this to work minting and bonding have to be severely adjusted though:

Mints can only ever happen at the backing price or above.

That means that discounts will be negative as long as the backing is higher than the current market price. Otherwise minting will push down the backing per $RUG and devalue current holders.

The proposed steps above would have serval benefits and some downsides to the Project and its holders:

Benefits:

Price can never drop below 70% of the backing
Holders have a "Risk-Free" exit point that can never decrease (unless treasury holdings like wAVAX/QI drop in price)
In case of future borrowing functionality liquidation cascades can be avoided
Trust in the Project is increased since every holder can redeem his $RUG for part of the assets in the treasury.

Downsides:

Minting will not be viable until the price of $RUG is above the backing
The treasury will shrink through claiming (although backing will increase)
Future investments could decrease the Amount of the treasury that could be claimed

Off-Chain Vote

Implement claimability

56.07K 46.7%

Adjust the percentages(new vote)

4.97K 4.1%

Don't implement claimability

59.01K 49.2%

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Timeline

Jan 01, 2022Proposal created

Jan 01, 2022Proposal vote started

Jan 07, 2022Proposal vote ended

Oct 26, 2023Proposal updated

Claiming

Effectively that rewards $RUG holders with a higher backing the more $RUG is claimed while also enabling the market cap for $RUG to never drop below 70% of the treasuries current holdings.

For this to work minting and bonding have to be severely adjusted though:

Mints can only ever happen at the backing price or above.

That means that discounts will be negative as long as the backing is higher than the current market price. Otherwise minting will push down the backing per $RUG and devalue current holders.

The proposed steps above would have serval benefits and some downsides to the Project and its holders:

Benefits:

Price can never drop below 70% of the backing

Holders have a "Risk-Free" exit point that can never decrease (unless treasury holdings like wAVAX/QI drop in price)

In case of future borrowing functionality liquidation cascades can be avoided

Trust in the Project is increased since every holder can redeem his $RUG for part of the assets in the treasury.

Downsides:

Minting will not be viable until the price of $RUG is above the backing

The treasury will shrink through claiming (although backing will increase)

Future investments could decrease the Amount of the treasury that could be claimed