Hello Magpies, Smart Converter for $WOM is here.
Magpie is a yield-boosting platform built on top of Wombat Exchange. The protocol offers WOM holders the opportunity to earn high APR by converting their tokens into mWOM. mWOM refers to “Magpie WOM”. mWOM allows users to earn boosted staking rewards and revenue share from Magpie. Users can also stake their mWOM tokens on Wombat to earn MGP rewards.
When users convert WOM into mWOM or compound their WOM rewards on Magpie they get 1 mWOM for each WOM converted at 1:1 ratio. mWOM is listed on Wombat Exchange and depending on its price, users can get a rate different than 1:1 swapping WOM into mWOM there.
WOM into mWOM conversion
- Original Conversion rate on Magpie: Users get 1 mWOM for each WOM converted at a fixed rate.
WOM to mWOM swap:
- On Wombat Exchange: mWOM price is lower than WOM, so if users want to swap WOM to mWOM they can get a better rate there. Let’s say:
1 WOM = 1.2 mWOM approximately
At this rate, if users swap the WOM token to mWOM on Wombat Exchange they get 1.2 mWOM approximately for each converted WOM.
- New Mechanism on Magpie: With the new Smart Converter, users automatically get the best conversion rate from WOM into mWOM depending on its price.
Magpie Smart WOM Converter
The Smart WOM Converter solves the conversion rate issue. With this new mechanism, when users convert WOM into mWOM or compound their rewards on Magpie, the Smart Converter will automatically check the WOM to mWOM conversion rate on Wombat Exchange first. If the exchange rate of mWOM to WOM is lower than 0.95 on Wombat, the Smart WOM Converter will swap WOM into mWOM for users and they will get more than 1 mWOM for each WOM converted, the same for compounding, when users decide to compound their WOM rewards into mWOM, they will get an mWOM amount based on Wombat Exchange swap rate between their WOM rewards and mWOM.
For Magpie its a top priority to keep the mWOM price as close as possible to WOM. These actions aim to provide liquidity/stability to the mWOM to WOM conversion. The Smart Converter allows users to get more mWOM for their WOM by offering the best available ratio directly from the mWOM pool.