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  • Request for comment : Dynamic Emissions Lever for Policy

There is a reason hyper inflating supply of anything drops the relative value per unit if there isn't demand to meet it.

We should be printing aggressively when demand is high and conservatively if at all when low, how to quantify demand for OHM - as premium over backing, should OHM trade at a premium over backing this would mean there is demand for OHM, which in turn makes bonds profitable for treasury growth and therefore we should align ohm inflation/emission rate to it.

The OHM emissions table is flawed because it expects the market to align with the OHM inflation rate, rather than have the inflation rate align with market demand for OHM, what is happening now is people are bringing wheelbarrows full cash to exchange it for a loaf of bread.

When OHM trades at 1000% over backing = high demand = inflation rate should be in the 1k-10k% APY bracket for example. When OHM trades below backing inflation should be 0% if not negative (inverse bonds) .

If we dont stop/control our rate of inflation and run inverse bonds this will be counter productive, we will burn some supply at the expense of depleting the treasury and all while keep injecting more unbacked supply into the system? this is like adding fuel to the downward spiral, backing per OHM go down because of treasury depletion + more unbacked ohm printed.

The root problem is we are printing too aggressively when there is no demand, all because of the emissions schedule that has no correlation to market conditions and actual demand for OHM. Its like set in stone when it should be variable in function of demand/premium/discount over backing

Correlate OHM emissions rate in function of market price to backing per ohm

This poll has ended.

    Pulleys and levers, fosho. I’m sure some balancing math needs to be done but it’s good point/idea

    Dom98000

    Turn 3,3 into = keep OHM price above backing because that truly benefits everyone protocol, bonders and holders, the higher the premium over backing the higher the emissions APY.

    Dynamic Emissions Lever for Policy

    Now just need help from the Strategos to figure out emissions APY to premium over backing 1:1, 2:1, 33:1, 100:1?

      Dom98000 changed the title to Dynamic Emissions Lever for Policy .

      I think we should at least try and model this out.

      Interesting take. I think price suppression via rebase sellers will continue. Along with the APY, maybe look into vested rebase rewards.

      Dom98000

      Market is quite clear about what it thinks of our current lever configuration. Some things need to get recalibrated. APY as set by OIP18 was set as per the best estimate of emissions based on reasonable assumptions for demand for OHM in the future . Demand is clearly not where we thought it would be. our hypothesis is therefore wrong therefore we need to readjust. when everything is in bull pump euphoria mode all is good for everyone, but flaws show and crack under pressure, we cracked, now we need to mend the pieces back together stronger.

      Doesnt mean we cannot or should not ever go back to 1000+ apy, in a high demand for OHM environment why not. but emission should be dictated by demand for OHM, how do we quantify demand for ohm? simple as premium or discount over backing. trade above = high demand, trade below = low demand. purely from a core product standpoint, yes of course there are the subjective value add like the dao, econohmy etc premium that should be factored in but it all starts first hand with ohm then market will factor in everything on top of the core product.

      We need to dynamically adjust and control the expansion of our supply based on current market demand and market conditions. We cannot be emitting now at the same rate that we were when we were trading at 500-1000% over backing. backing is our rock, focus needs to be on growing backing per ohm not further expanding supply . Much better for protocol to be selling 1 ohm for $500 than 1 ohm at $5.

      There arent 1000 historical solution how to deal with hyperinflation and the collapse of monetary system :

      1. peg your currency to something which we wont do

      2. burn supply (not buy back like literally willingly burn set it on fire)

      3. or get the emissions policies and bonding under control hope its not too late to regain market trust, i dont think you guys realize how long it will take to regain the confidence of the market, thanks god 1 month in crypto is like 1 year IRL..

      Yes we can turn this around but the longer we let this go the longer the road to recovery will be.

      I propose :

      - when OHM trade below backing 0% APY

      -when ohm trade 0-5% over backing APY only to cover dilution from bonds

      - 5-10% over backing APY to cover bond dilution + 10:1 APY: Premium over backing = trade at 7% over backing APY would be 70%+emissions to cover bonds

      - 10-25% over backing ( i think this is the sweet spot for bonds?) APY to cover bond dilution + 20:1 APY: premium so at 20% over backing APY would be 200%+

      -25-50% '' '' '' '' 30:1

      -50-150% '' '" " " '' 40:1 etc

      Logic here is ohm is trading say at 100% premium over backing - that is from a core product standpoint "overvalued due to high demand for OHM" (good problem to have def better than trade 50% below backing) we want to incentivize bonding at those high premiums in order to increase backing and bring OHM price back closer to backing.

      Incentivize market to keep Ohm price above backing thru APY > bonds issued above backing will raise backing per ohm> emissions incentive will keep ohm price above backing but not get out of control.

      OHM rises in price and takes backing and liquid backing with it. wouldn't it be nice that if we managed things properly our backing would now be at say $500 and liq backing at say 50% below $250 where inverse bonds would of been waiting.

      We were too conservative with bonds when we should of been aggressive and are too aggressive with emissions when we especially now so close to/below backing shouldn't be emitting a single OHM

        Dom98000 changed the title to Request for comment : Dynamic Emissions Lever for Policy .
        1. We want to continue selling bonds because doing so is profitable and builds the treasury
        2. If we sell bonds, we have to pay rewards to prevent ohmies from being diluted through supply growth
        3. Supply growth (APY) should scale with total supply since larger supply means bonds are less dilutive
        4. Supply growth can lower backing per OHM, which is why we like to look at things through gOHM which includes rewards
        5. Throughout almost the entire history of OHM, supply growth hasn't been either correlated or directly connected to price
        6. I track the full treasury value per held gOHM which is the best insight into how the value for investors is actually changing
        7. On that chart, this value has been holding pretty steady over the last month while the premium continues to decrease. This is a clear indicator that the price is falling faster than is warranted based on backing

          pottedmeat thank you just my thoughts on your points

          1. yes sure selling bonds at any value above 1 Dai is "profitable" , but in my opinion profitability of bonds should be in relation to them increasing value backing per OHM
          2. yes totally agree, any bond issued should be covered by equivalent emissions to avoid dilution, but that is not what is happening now is it? we are emitting approx 65k OHM /day at current apy which at current market price $40 some $2.6m , I do not think we are taking in equivalent amount in bonds? hence our emissions are diluting backing per ohm.
          3. i think supply growth more than anything needs to be correlated to demand for OHM
          4. well yes if supply grows without equivalent intake of assets, it dilutes backing per ohm because you issue ohm without correspondent value going into the treasury

              Dom98000

              1. Backing per gOHM, for sure! It's particularly hard to look at this stat in insolation independent of the price's effect on liquidity positions. That's why I like to look at backing for gOHM that's actually in wallets
              2. We are at neutral dilution after a period of negative dilution
              3. Why?
              4. What's the importance of focusing on OHM when no one is holding unstaked OHM?
                9 days later

                Something we've previously discussed in policy is changing emissions to be a fixed APY rather than scaling with total supply and increasing as users unstake. This would naturally reduce overall emissions during bearish cycles. Would love to hear your thoughts as this is something we're considering moving forward with.

                I am strongly in favor of reducing emissions. At this point, the high emissions did what they were intended to do. They allowed us to gain control of a large treasury. Now, it's time to reduce emissions below 100%. It's hard to keep the price from continually falling with a 800% APY.

                Let's get the APY down below 100%. Let's get the Treasury Dashboard up. Let's keep expanding our reach into more projects. Let's get OP Pro launched.

                This project is great and this team is great. We just need to fine tune this, in addition to building out a communications team that is more professional and slightly more corporate in tone.

                We want instititutions to hold OHM. When they're investigating, they don't want to see the leads of the project talking about eating ass and stuff like that.

                Obviously we can still fuck around and be degens or whatever, but we should have some sort of front-facing communications individual or team that is eloquent, respectful, and can continue to spread the message clearly about OHM.

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