Zeus
I really like the bond vaults / erc-20 dynamic introduced here. That does make bonds and yields more accessible and more liquid.
I’m also really happy to see the DAO improve sustainable APY and incentivize long duration staking (via internal bonds).
I recently authored a mega thread on Twitter about OHM and KLIMA that proposes a different approach with a ton of overlap to this. Each has pros and cons, and this seems to check off the changes to bonds and staking that I outlined.
Idk if I can link but I’ll try, and fyi the thread was for KLIMA and OHM both, and generalized to all POLs.
OHM is the OG POL, so I name dropped it a lot. KLIMA has a bit more focus on post since OHM has more in the works already.
https://twitter.com/Chees_eth/status/1492267892213174278?s=20&t=mlz_orRu5u5jRjQolowpVA
Full disclosure, I have more reading to do about the OHM dynamics proposed above (by Zeus). I do follow the outline, and I’m a wiz a math. I did not get to linked technicals yet, but I will soon.
Off the cuff I think that locked staking (described in my post) would more effectively remove OHM from circulation than what I see above.
From what I see above, bond tokens will be liquid even before maturity. If bond tokens are liquid, then interest is partially realized in real time and selling is easy.
(I like liquid bond tokens but…)
These alone leaves the premium dynamic (as described in my post) unchanged. [Although, increasing sustainable yield would help alleviate that some, as it would represent an increase in RFAPY (in my post)].
As long as Stake APY >> RFAPY, RFV is diluted over time. Therefore Prem* (defined in post) is still under pressure.
As it stands, (and perhaps I have more reading to do) Internal Bond Tokens will be liquid. and Prem* & (therefore price) will be subject to market whims. RFV will still dilute, and Prem will still decrease (after a likely spike from new protocol). Feedback ensues until Prem approaches (1 + new higher RFAPY). I would love to see a solution that fixes this and breaks the cycle.
So, that leaves us in a jam. I like liquid bond tokens and “internal bonds” but they do not solve the current problem (as I see it and as outline in my post).
Would auto-staking and locked staking (as described in my post) fix this?
Genuinely asking, idk.
IMO we must incentivize long duration staking / holding in an illiquid fashion, but that’s IMO. So is this: Fully bringing APY and RFAPY into sync will require something that cannot be sold on a whim.
I think that illiquid long staked OHM would solve the problem with premium, and bring stability to prices as well.
Moreover, It would also reward the most ardent (3,3) believers regardless of what price the buy at, which seems fair (see “mid-wave” buyer notes on Twitter).
Any such locking mechanism would have to be funded by rev alloc and voted on by DAO, of course. Therefore it’s not really “monetary policy” in the old sense, or at least it’s enacted by vote.
If locked staking (as is described it) is unappealing, is there any alternative?
The goal IMO is to incentive longer duration staking (and take OHM out of circulation for a set duration).
How besides locked stakes can we incentive long dur holding (vs shorter dur) and stabilize price (assuming as I do that price = [RFV] x [RFVAPY + Prem*]).
Can we do something to minimize volatility of Prem*, if not also incentivize long dur stake?
Conclusion:
That’s all food for thought, but regardless the plan as stated above seems like a good step in the right direction.
It does at least allow for duration, and IMO that is the most key thing (for OHM right now).
Liquid bond tokens are also pretty neat. They would allow the market to set they APY for a maturity date in real time, and they’d remove the bot problem.
The key will be solving the Premium dilemma going forward. I do not see a solution to that in the changes outlined, but I’ll see if I missed anything in the docs.
We’re all still growing and learning on the journey, and I welcome constructive feedback 😊