Take profit guidelines

How to take profits responsibly

The main goal of any seigniorage protocol is to achieve algo-stability. In tomb forks, this is achieved through a combination of incentive based game theory mechanics. These systems “work” when the majority of investors have an understanding of these mechanics, and base their behaviour around protocol stability.

Here are some rough suggested guidelines for how to healthily take profit while increasing your position in the protocol. These guidelines are meant to supersede the subsequent allocation strategy guides.

1). When $MAGIK is under 1.1 TWAP, avoid any sales until peg is reclaimed and stabilized.

2). When $MAGIK is between 1.1-1.3 TWAP, avoid any sales that will have greater than a .3% price impact per epoch.

3). When $MAGIK is between 1.3-1.8 TWAP, avoid any sales that will have greater than a 1% price impact per epoch.

4). When $MAGIK is above 1.8 TWAP, practice respectful and responsible profit taking and avoid market selling tokens in a way that spooks the charts.