Proposal: Blacklist of Arb Bot

[BONEORION]

I support this blacklist

[Rusty073]

I do support the blacklist of the arb bot. In the meantime though we could be buying the tokens off of the exchange the bot it on and bringing them back back to defi wallets. This should bridge the arbitrage opportunities for it as well as force the exchange to purchase more tokens

[Ruggrat]

I’ve had time to think it over, let’s do it…

[KarmaGang]

In my opinion the risk greatly outweighs the reward on this one. I do not want to blacklist and will vote no.

[BigBoi]

I support this blacklist

[Heezy]

I’m personally still on the fence on this one… As my biggest fear is the token not being able to acquire future exchange listings and partnerships, knowing that there is a history of blacklisting. Don’t get me wrong, there’s nothing I want more than to get rid of the arb bot; however I’m just not sure if this will impact the project negatively over the long term.

[RDJ23]

Based on LTD experience on blacklisting the Arb Bot I support K9 to do the same.

I would even suggest to block other Bots and at least for a term of 6 months or until volume increases.

[AJ808]

I support the blacklist. Have other projects had other arb bot busting strategies that have worked other than blacklisting?

[Heezy]

Just know that the blacklist worked well for LTD.

[Ruggrat]

Can we implement this ASAP after hearing how well it went for LTD

[Heezy]

I think after seeing the 8404’s performance today, I am swayed to vote for the removal of it

[Seizanshib]

First, I want to reiterate a sentiment I shared earlier: we are partly responsible for the current situation. Everyone who voted “yes” to change the original tax plan (myself included) contributed to this. The arbitrage bot’s impact would have been significantly reduced if we had stuck to the original plan of gradually lowering the tax.

Now, on the question of blacklisting. Traditionally, in the spirit of DeFi, blacklisting feels like a contradiction, it’s not what decentralized finance stands for. However, we must acknowledge that we’re building within the realm of future technology, and future technology needs to adapt to new realities.

Bots are becoming increasingly sophisticated and will continue to advance. Ignoring their evolving capabilities puts us at risk of falling behind. While blacklisting feels like an unconventional step for a decentralized project, it may be the practical solution we need to safeguard the integrity of the DAO and protect our long-term goals.

For these reasons, I’ve reconsidered my stance. I now support blacklisting the arbitrage bot, not as a violation of DeFi principles, but as a necessary adaptation to the reality we face. It’s a step forward, and I believe it aligns with our mission to create a sustainable and innovative ecosystem.

[Sentinel]

For maximum effect, we need to create a event to encourage new buys, then block, this way the community can all jump on a new green candle.

[Heezy]

Like a K9 X Spaces 1 year Anniversary buy competition?

[Seizanshib]

Think i agree in this, creating an event to encourage new buys after taking action would maximize the impact. If the burn proposal passes, it could align perfectly with this strategy, adding another layer of excitement and scarcity.

On top of that, there’s also the lock campaign proposal, which could further drive engagement and strengthen the tokenomics.

A little sidenote that I haven’t seen mentioned yet:
Who will be handling this? Will it involve a lot of extra work for the K9 devs? If so, we need to take that into consideration. Personally, I’d suggest hiring Mr. Lightspeed to team up with the K9 devs to help execute this. It’s important we don’t overburden the team while ensuring everything is carried out effectively.

Regardless, things are already starting to shift in our favor. With only a few months of vesting left, we’re heading toward a turning point. It’s the perfect time to rally the community and position ourselves for the next phase of growth!

[buzz]

No. The DAO process must be followed. This is not an emergency vote.

[buzz]

It’s one transaction that the multi-sig holders need to make. Takes less than 10 minutes. Appreciate you thinking of the devs though! Of course I would also like to hear @MrLightspeed experience in doing this in the past on the effectiveness, but in terms of execution it’s very straightforward.

The effectiveness and what I’d define as potential “brand hit” to exchanges and future partners is what I’d like input on.

From an academic perspective I still can’t grasp how banning 1 arb bot isn’t just going to allow all of the others to flourish if the same underlying activity causing an environment for arb bots to be profitable remains constant.

But I have given my 2c on this enough. People have accused me of “being 8404” since I have asked inquisitive questions on whether banning it’s the right choice. So I think, if the community is still pressed on this, it should go to a vote. I won’t be too active in pushing one way or another, because I think the wrong problem is being identified and the wrong problem is trying to be solved. The bot isn’t the enemy. The bot is a net buyer and seller. Yes, it hurts momentum, but this happens with every coin. Heck, it’s even active on TREAT right now and it only launched a few days ago.

The simple environment that allows 8404 to thrive is:

• Sellers > buyers on centralized exchanges
• Price CEX < price DEX

The only way to “solve” this is price parity on both. To do that there needs to be more buyers or the DAO needs to expose an equal amount of capital to match the sell pressure to buy it all back at an equal price as the DEX price.

A rough way to estimate this cost would be the daily volume of 8404 sells on DEX is the amount of USDT the treasury would need to take to use per day to put a buy wall on exchanges

So if 8404 does $10k in selling per day then the treasury would need $10k in buys at or equal to the price of DEX every day to buy KNINE, less any organic buying that other participants do to offset that liability

I think the only “good” outcome from this is people on dextools won’t see 8404 selling anymore and their wallet address will be replaced by another fresh one that people aren’t familiar with. So perhaps they will think the problem is fixed with that change from a casual perspective.

If I were a betting man I’d bet on the side of “the grass isn’t always greener on the other side”

Screenshot below shows the on-chain route of 8404. Buys MEXC. Withdraws immediately. Sells to profit the spread.

[NoOne]

I mirror your sentiment.

Removal of one bot would not remedy the root cause.

It may temporarily alleviate the negative pressure but as long as price difference exists - there will always be someone to arbitrage this opportunity.

With development of AIs as was rightly mentioned it is only going to get worse.

As to the immediate positive effect on LTD token (no offence - I am also a big supporter and investor) it did not change the trajectory of the token in any meaningful way.

But, the reputation of the project will now always have this fact attached to it.

So I ask: what is the point of doing it?

We know that demand is the real driver of the price.
There will always be opportunistic traders (human or otherwise).
There is nothing we will be able to do about them realistically.

I do not see bot ban as the magic bullet will cause a crazy rush of extra demand to the token.

If we really want to plug this leaking hole - we have to remove the original cause of the price difference:

1. Look into reducing the taxes on chain which create this disparity.
   Positive - the selling pressure will be less on CEXs as holders will be able to sell with less losses directly on chain.
   Negative - DAO will be missing on tax income

2. Delist from exchanges
   Positive - eliminates the bot issue completely; increases DAO tax revenue as no more circumventing it.
   Negative - reduces potential new buyers. It would be nice to learn some statistics how many actual new holders do they bring.

3. We need to brainstorm additional developments/sources of revenue that DAO can pursue. Existing products are nice, extremely well built but we shouldn’t assume we have a cash-cow now which will keep this project afloat (when market finally picks up). We should keep reinventing ourselves and be at forefront of innovation. As the Why Combinator’s guiding principle - we should be creating utilities that answer to ‘why this product is needed’. The profit will then follow.
   These developments is what will excite people and reignite the demand.

4. Last option is to preserve the resources and reputation and bite the bullet until the unlocks finish and the selling pressure recedes.

I think option 3 we have to do irrespective of the decision with the bot.
Our survival depends on our continuous growth.

Blessings.

[buzz]

Agree with most of this, however (and this is outside of my wheelhouse) I think perception is often reality. If the community, and the market, firmly believe that banning 8404 is going to help - then it could help and make people more comfortable buying, and then increase demand.

Banning 8404 does not inherently limit sell pressure, but there is a case where it increases buy pressure just because the market thinks that it will help

All “solutions” have potential negative externalities, so DAO needs to decide which externalities it wants.

• Tax reduction: DAO gets fewer tokens. Also 8404 is active on non-tax tokens too, so not a 1:1 solution
• Delist: this one is more obvious. Market values exchanges. I see it in my X comments daily about how they want more. Market tends to think delisting is bearish. Sellers will just migrate to wherever they can sell in the most effective way for them
• Additional development: dev work costs money. Substantial products need more than current capacity of developers. More devs = faster work. More devs = more budget. More budget means treasury needs to be used and depleted into strategic builds. There’s also a lack of clarity (as of Jan 16, maybe will change) on what products can be built that would be useful to Shibarium given the few details out about the technical implementation of TREAT and other products that the Shib team has in mind to build themselves. For example: introducing a ve3,3 model to Shibarium was something thought of by our team. We could have built it. But glad we didn’t because now it’s being introduced directly through the Shib team. Would have likely been a sunk cost in terms of dollars and time.
• Patience: the community is urging to vote on the blacklist, and this proposal meets the requirements for a vote, so ultimately since we are a DAO it should probably go to a vote to allow the community to satiate their want to at least be able to impact potential change

[NoOne]

I’m not a fan of “spray and pray” strategies. But I’m just one voice.
Community rules and will have to live with the results (good or bad).
Hopefully, the former.

For TREAT details - suggest to read latest SHIB Magazine.
It has extensive clarifications about the token and upcoming plans which people might be missing. Helped me a lot before todays space.