Bear Fund - Proposal

Honeypot funds cannot currently be used as part of a passive reward system to Bear holders despite initial statements. An alternative solution may be to implement a system where Bear holders can exit the community for guaranteed minimum value, referred to as the Bear Fund.

Parameters outlined below:

  • Honeypot value: 250ETH
    • Allocate 50% to Bear Fund: 125ETH
  • Total Bears: 10,000
  • Bear Fund/Total Bears: .0125ETH

Under this arrangement, if a Bear holder wanted to exit the community and immediately sell their Bear, they would receive .0125ETH (less fees) per Bear. To avoid fees and maximize value delivered to the Bear holder, pursue the most efficient transaction. Honeypot cannot use more than the allocated Bear Fund per Bear amount on any given transaction.

The Bear Fund per Bear amount will depend on the allocation percentage and the Honeypot value:

  • Allocation percentage should be reviewed and adjusted routinely, perhaps quarterly. Comment period beginning the month prior, with voting open the week prior to implementation of changes.
    • Bear Fund Value per Bear to be set quarterly. Dynamic adjustments throughout quarter to be discussed
  • Honeypot value depends on the actions of the community. As Honeypot grows, Bear Fund and the absolute minimum value of Bears increase.
    • Those who are looking to benefit from the value of the Honeypot are incentivized to increase the value of Honeypot, as there is direct correlation to the value of Bears.
    • Benefitting from Bear Fund results in exit from the community, compelling longer holding periods and multiple holdings
    • Absolute minimum provides a sense of security - guaranteed Bear value regardless of what may happen.

This process may increase the value of the Honeypot:

  • Bear Fund acquires Bear for .0125ETH
    • 4% to Honeypot from purchase
  • List for sale at mint (.05ETH) if acquired below mint less % noted below
  • List for sale at acquired price * 125% (.06ETH * 125% = .075ETH)
    • May need to increase percentage to account for fees + desired gain

In this sense, assuming resale is completed, accessing the Bear Fund results in a higher Bear Fund value, compelling the individual to hold for a longer period.

Realistically, the Bear Fund becomes the buyer of last resort. It is likely more profitable to sell on the secondary market. The Bear Fund provides immediate liquidity whereas the secondary market may result in a long period of time between list and sale.

Open for discussion.

4 Likes

I really like this idea. To clarify, you are thinking this would be a dapp on the website where you could instantly cash in your bear without having to wait for a buyer on the secondary market correct? If thats the case, I like this idea alot. I would maybe not alot 50% of the honeypot to this, as that seems like a huge amount of money that we want to be using for other initiatives. But, maybe we can have a smaller portion and limit the monthly buybacks so we don’t go over our budget? Just some thoughts, but overall I really like the concept of this. Nice one @Jimpson.

3 Likes

Through the website would be great. Any way for a holder to immediately and seamlessly exit without delay. Could even be a WETH offer/request initiated via Discord.

Allocation % determined by community vote. An argument could be made that 50% is too small or too large…that’s fine, it’s up to the community.

No monthly max transactions needed or warranted - value is allocated equally across Bears up to allocation pool (Bear Fund). Capping number of Bear Fund transactions is very great depression-esque. Budget would not be exhausted unless every Bear holder exited within period due to structure of Bear Fund.

something as simple as if listed below .05 we have a bot auto bid for all those assets … weth. currently at .0125 . the seller will lose money though.

in essence this is simply a liquidity pool ala NFTX … etc… with VERY beneficial Honey pot terms. if it were to work i would be on board. but i cant see it working at the intrinsic value of .0125.

2 Likes

Right. At current floor + high gas, such a system is more marketing than anything. As floor rises and gas falls, this system will get more use and drive more value to Honeypot and community.

I love your thinking. Here is a spreadsheet I pulled together, close to accurate, but i’m sure not 100% accurate as there were some transactions I haven’t included as I’m not a finance or etherscan guru, but it will give you a pretty good gauge of where we are at. Have a think about how it might be funding or what might need to be reallocated. Would be good to have an idea of this before the proposal goes to a BIP. BBH HoneyPot Investments - Google Sheets