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.
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.
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.
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
I think a liquidity pool is an interesting idea, but I see a couple of big challenges with this outlined implementation:
Which bucket is the funding coming from to start this? And what happens if that runs out?
It feels like a pretty large assumption here is that we can then resell the bought back bears at mint price, but with the current market structure, we won’t get anywhere close to that, so we are going to end up with a whole bunch of bears in the pool. I know that you acknowledged that this will initially be a marketing gimmick for the most part, but I think we have to be really, really careful about implementing something like this.
Just some quick notes to keep in mind. As of 02-Dec-2021, there are 75 bears under 0.05, so if all of these get liquidated, that would require 3.75 ETH. We should also not assume that this would be the only ones at this point if we implement this. At first glance, if we look at sales volume across the past 90 days we see almost 1 ETH per day (i.e., just about 90 ETH), which is decent. If we dig further down into those numbers, however, we see about 40 ETH of this occurring on just two days, so removing those two days greatly changes the average numbers.
Bucket would need to be carved out. I noted 50%. The % is probably between 10 -20% at best.
Reselling is upside and incentive to stick around. Initial arrangement is to provide minimum guaranteed value assuming holders want to leave. If everyone goes for the exit then there’s no sense in having a project to begin with. This arrangement is the only proposal that actually provides value to existing holders until another mechanism is allowed and implemented. The idea that passive income will exist without revenue generating initiatives is another consideration for perhaps a different thread (how much is actually expected when divided amongst 10k bears).
The value is dynamically set by the percentage chosen to be allocated to the pool x honeypot value / total bears. Each bear is valued same. Your calculations are off even under the most generous parameters assuming 100% allocated.
250 eth pot @ 100% allocation = .025 eth/bear = 1.875 eth total for 75 bears mentioned. This is also post fees. This ensures all bears have a minimum value.
If we said 10% allocation, each bear is worth .0025eth. No one’s going for that now. But assuming honeypot increases, and as allocation to this pool increases, we establish decent minimum value which may entice folks to jump in and increase the honeypot.
If the pool runs out, it means everyone sold their bear, and the project is dead. Sales are anemic currently.
So this idea has been discussed with the devs and they are hoping to have something like this set up around January. The idea is really to make sure that as the honesypot grows in value, all Bear holders will have access to that value. Having a buy back program gives all the holders the ability to cash in on a rising floor and rising honeypot value. The technical solution is in the works, but of course we will need the community support.
Interesting idea. It would be an interesting way to let people exit but it may need a cap on how many bears per day it accepts. The fund could en up holding a ton of bears and having OS as the only venue might be too limiting. Maybe we can mimic olympus pro and sell bears directly for different assets, or even other NFT’s, that the hideout wants.