ARTH & MAHA - A closer “bond”

Steven Enamakel
Feb 3, 2021 · 5 min read

Today the MAHA team would like to share a major innovation/breakthrough that we have achieved in the design of ARTH, purely as a result of a lot of the community discussion that has happened across our forum, chat groups, and discord.

In this article, the team addresses problems faced by ARTH, elaborates on the solutions, and further proposes a plan of action with timelines for the protocol to not just hit the 1$ mark but to retain, stabilize and remain pegged to the Global Measurement Unit (GMU).

1. A custom pool with proper incentives/fees for buyers and sellers (AIP7)

In simple terms, the problem with Uniswap lies in the fact that sellers can easily front-run bond redeemers without any consequence whatsoever. This is an activity that we’d like to discourage as it is working against the protocol when it starts selling ARTH bonds.

To address this, the team has worked on creating a custom Uniswap pool with incentives for buyers and sellers that help bring the protocol back to the 1$ target price.

(This concept of having incentives that directly have an influence on the price was inspired by the brilliant work done by the fei.money team)

A screenshot of the new pool with built-in incentives/fees

The first innovative breakthrough: A new secured portal where buyers get rewarded in $MAHA based on how much buy volume they contribute towards $ARTH and sellers get charged in $MAHA based on how much negative price impact they create. These incentives/fees is only applicable when ARTH is trading below its target price of 1$.

This means that there’ll be an even stronger corelation between the volume of ARTH being sold and the amount of MAHA being burnt.

Buy Rewards Summary

The table below shows how much MAHA is rewarded to buyers based on various market conditions. The parameters used to determine how MAHA needs to be rewarded is based purely on the volume of the buy order and the average volume over the last one hour.

A brief summary of rewards placed for buy orders when we are below the peg

The MAHA used to fund these rewards come directly from the Ecosystem fund.

Sell fees Summary

The MAHA being charged for sellers is based on how much negative price impact they contribute. The more further away from the peg we are, the higher the fees. The more negative impact the trade has on the price, the higher the fees.

A brief summary of sell orders when we are below 1$

To keep things fair, the fees/rewards only apply when ARTH is trading below 1$. Above 1$, the protocol then stops the fees and resumes normal operations.

What’s very unique about this model is that the amount of MAHA being burnt is always far greater than the amount of MAHA being rewarded. Keeping in mind that there is only a limited supply of MAHA in the market, but an unlimited supply of ARTH.

This means that for anyone trying to front-run bond purchasers, it can become relatively expensive to do so. The protocol encourages selling when ARTH is above 1$.

Discussion thread for AIP7 can be found over here:

2. Automatic Bond Redemption (AIP1 & AIP3)

This is a feature implementation that was discussed and ideated upon by the community wherein bond redemption was based on a first-come-first-serve basis. However, FCFS means that the system becomes automatically prone to gas wars.

With the recent voting of AIP1 & AIP3, bond rewards are now going to be pooled and vested across a period of 1 epoch. Allowing for a gradual and fair distribution of rewards.

Discussion threads can be found over here: AIP1 & AIP3.

3. Vested Rewards (AIP4)

As observed by many community members during the early days of the protocol, all expansion rewards once given out were instantly dumped on the market which caused a huge unwanted sell pressure.

The community has further discussed that bond rewards need to be vested for at least one full epoch so that users will not dump onto the protocol when it expands.

Discussion thread for AIP4 can be found over here:

The Plan of Action to hit 1$

Taking all of this into account, the team has come up with a very clear and straightforward plan of action for $ARTH to hit the 1$ mark.

  1. Completion of Development & Internal team testing: The team expects that by Friday, Feb 5th, Development and testing would be completed.
  2. Public testing and Bug bounty programs: Over the weekend (Sat-Sun, 6–7th Feb) the team will conduct a public bug bounty to reward bug hunters who find bugs on the smart contracts, and simultaneously we will be sending the smart contracts to the audit firms. The team will also conduct a public testing round during this period.
  3. Migration of Liquidity from Uniswap to the new pool: Tentatively on Tuesday, Feb 9th at 3 pm GMT, the team will open up the new pool and start encouraging all LPs to migrate their liquidity into the new pool. Trading will begin immediately on the new pool. The migration will be assisted using a smart contract that’ll migrate liquidity for a user in just one click saving unwanted gas fees.

If any delays were to happen, the team will make sure to inform the community on our telegram/twitter at least 24 hours beforehand.

Incentives for Uniswap LPs will be shifted to the new pool.

Special thanks to our Community Contributors

The most important thing for the Maha community to realize is that this is a journey that has been taken up by the community and built for the community. We cannot have reached here had it not been for the wonderful contributions from all our community members.

In particular, we’d like to thank all those who have contributed ideas to our discussion forum (discuss.mahadao.com), all those who have contributed to conversations in our telegram & discord channels, and all those who have participated in our governance portal.

We are a step closer towards decentralizing MAHA and hitting the 1$ mark for ARTH and we couldn’t be here had it not been for each of your contributions.

About MahaDAO

MahaDAO is a community-powered, decentralized autonomous organization on a mission to empower billions to preserve their purchasing power through the world’s first valuecoin, ARTH.

MahaDAO Official Links

Telegram | Twitter | Discord | Github| Website | Governance Portal | Discussion Forum | Gitbook | Product

Disclaimer: None of this should be considered as financial advice. Please do your own due diligence before participating in any of the activities listed above. Participants/inhabitants from China, South Korea, Singapore, Japan, Canada, USA, Puerto Rico, Brazil, France, Malaysia, Nigeria, Philippines, Russia, UK, US Virgin Islands, & any other possessions of the United States are not permitted to participate in any kind of sale conducted by MahaDAO because of restrictions enacted in the said regions. Moreover, this is not to be construed as financial advice.

MahaDAO

MahaDAO presents ARTH: World’s First Valuecoin

MahaDAO

The MahaDAO is a decentralised organisation revolutionizing money as we use it. MahaDAO is a community focused DeFi project to create timeless value for its users through the world’s first valuecoin

Steven Enamakel

Written by

CompSc, Economics, Founder of @mahadao

MahaDAO

The MahaDAO is a decentralised organisation revolutionizing money as we use it. MahaDAO is a community focused DeFi project to create timeless value for its users through the world’s first valuecoin