It looks very possible that Wintermute cryptocurrency trading will shortly approach new trading highs. So it seems the right time to take stock and make sure that the way we handle trading profits are in alignment with the needs of the collective.
We think this is particularly relevant given the way that the price of XAI tokens has become detached in value terms from Wintermute’s trading.
Part of this is inevitable given the overall negative sentiment in the cryptocurrency markets we experienced in 2018, but that does not explain the extreme divergence we have seen between the value of the assets available for Wintermute to trade, those held in the ICO pool, the Investment pool, our recent equity position in Sevamob and the market price of the token.
In hindsight, the extremity of market conditions coupled with changes in the regulatory environment caused price pressure that our approach of buying small irregular amount of XAI with Investment Pool funds was unable to deliver the anticipated results. Rather than continuing with an approach that is not working, we would now like to look at other alternatives.
There are two obvious contenders to introduce. One is a new idea, the other, a proposal we are revisiting.
First let’s look at something we have considered before. The collective will vote on an airdrop or loyalty bonus payout to those token holders that have stuck with XAI during the long crypto-winter! In the past we founders, were first against the idea, but gradually we became less opposed to the concept. I think we should now, as a collective, consider approving the use of bonus airdrops as a way of rewarding holders of XAI. The airdrop would be in ETH and would be to the same address that were XAI were being held by token holders.
We will give the collective several percentage options to consider for the reward. Then, the next time the token pool reached new equity highs, we would allocate this percentage to an airdrop pool. When that pool exceeded 100,000 USD it would be converted into ETH and the airdrop distributed to addresses holding XAI on a declared block – we would provide at least 7 days’ notice of the distribution.
People that are holding their XAI on the dashboard would have the ETH added to their dashboard ETH address. They could then withdraw or purchase more XAI, as they choose.
People holding XAI on the Panxora exchange would have the ETH airdrop automatically credited to their ETH wallet balance.
Holders of XAI in their own wallet address would have the ETH airdrop automatically applied to the same ETH blockchain address.
For holders of XAI on other exchanges and wallets where they do not control the actual address private key would need to speak to the exchange or wallet provider support team about how the airdrop can be claimed.
Next, the new proposal. Right now, every month the Investment Pool has a pre-determined portion of its holdings set aside each month to purchase XAI, providing liquidity to the market. Instead of this, when a new equity high was achieved, we would set aside a portion of the profits for use in a reverse auction.
The reverse auction would operate as follows:
- A percentage of the new equity high would be placed in the auction pool. We would state the amount available and the date that the auction closes.
- Holders of XAI would elect to offer a quantity of XAI that they select at a designated price. This can be any price where they are happy to sell their XAI.
- At the close of the auction we will calculate the price at which we would have bought sufficient XAI to match the amount available. We would do this by starting at the lowest offer and working up through the offers until the full amount had been matched (we will never pay above NAV)
- When the purchase point has been determined then everyone will receive the same price e.g. If the sell levels were at 30,31,35,36,40,45 and we swept up through all the offers at 30, all at 31 and 25% at 35 then the offers at 30 and 31 would sell the full amount of their offered XAI at a price of 35, the offers at 35 would all sell 25% of their offered amount at 35, offers over 35 would sell nothing.
- If there are insufficient offers to cover the full amount then any unused capital falls back into the main Investment Pool.
By executing a bulk purchase in this manner it allows individuals that want to exit a large XAI position to execute in a single transaction. Over time this will have a positive impact on the price because people that want to exit are able to do it quickly. Right now, a larger holder that wants to sell, keeps offering into the market regardless of available buyers. If no one is available to buy at their offer price, they lower the offer again and again, until XAI are so cheap one of the mega-holders sweeps in and picks up the XAI for a low price. This decreases the number of overall token holders which has a negative effect on the token over the long term.
Here are the proposed choices for the vote.
- No change. We continue to leave 40% with Wintermute, 50% investment Pool
- 40% Wintermute, 10% Investment Pool, 20% Air Drop, 20% auction
- 40% Wintermute, 20% Investment Pool, 15% Airdrop, 15% auction
- 40% Wintermute, 25% Investment Pool, 25% Airdrop
- 40% Wintermute, 25% Investment Pool, 25% Auction
As usual the purpose of this announcement is to alert people that it is time to consider changes they would like to the strategy, to solicit new ideas collective members may have in addition to what we have suggested and to encourage debate in our SLACK and telegram channels.
The voting will take place June 13 – June 16. Visit the Voting Page to view instructions on how to vote through either through the AICoin Dashboard or an offsite wallet.