Can someone clarify (and pls edit the text of the proposal afterwards so it is crystal clear for voters) whether implementing No. 1 - "Implement Mint and Sync with no change to reward rate." would actually decrease staking emissions and if so, if this option is preferable for the health of the protocol. Thx.
OIP-93: Mint and Sync
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Interesting proposal.
Some questions?
1. Would this make LP bonds obsolete? If so, are any other bonds being considered or bonding will stop when below backing since reserve bonds are also stopped? (probably a policy question). This & also adding via LP bonds just keeps increasing LP supply at current price. Reducing volatility in price. This is good for price support, however not as good for price discovery.
2. Wouldn't this suppress and provide a downward pressure on the LP price as the values of K change? If the calculation is changed from total to circulating, in the event a large number of folks decide to unstake, the emissions keep falling with the possibility of going into downward cycle.
3. Is this a turn on and turn off decided by policy, or when implemented will be "always on" ?
Apologies if questions are wrong, just trying to clarify the intent here.
- definition of liquidity
- liquidity vs ubiquity
- uniswap v2 legacy tech
- implementation
- utilities
Definition and measure of liquidity
Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. The key in this definition of liquidity should be "without affecting its price". Liquidity should not be defined as "TVL in v2 pools" divided by treasury. Rather it should be referred to as "how big transaction do we want to be able to process while containing price slippage to less than 0.1 % ?"
Only legacy uniswap v2 technology is restricted to a linear relationship. v3 as you know has multiples higher efficiency, so we need to separate the liquidity concept from the mental trap of linear xyk pools.
Liquidity vs ubiquity
Another distinction is to separate liquidity (price slippage) from ubiquity (presence in every nook and cranny). While the first allows one to trade in and out without penalty, the second serves to hopefully see somebody hodl the token for sustained time (remove supply). Ubiquity should not be a goal in itself - slippage and supply removal is.
Implementation
While I see bleed in the Treasury's own LP positions, I do not see why the same must be a problem for 3rd party liquidity providers. Anyone that wants to avoid the dilution of holding OHM in an LP, could simply chose to use gOHM instead of OHM. So why are we adding complexities to solve a problem that is already solved by using gOHM as the pairing token?
v2 legacy tech
This proposal builds upon uniswaps v2 xyk logic, right? Why would Olympus marry itself to legacy logic? I fear this is a technology trap where Olympus deploys logic that builds on somebody else's old, inefficient v2 technology instead of looking forward and really maximizing the potential of v3 or possibly in-house AMM technologies.
Utility
a) Incentivizing others to provide liquidity works to weaken the pooper2 paper. Walls are walls only when Olympus has monopoly on liquidity. The more distributed ownership of liquidity, the more porous the pooper2 walls will be.
b) Promoting 3rd parties to participate in 3rd party AMM's promotes and strengthens 3rd party AMM's ecosystems. It does not strengthen so much Olympus ecosystem.
c) In my vision, Olympus does a 100x better job at marketing and delivering its own products than currently. In my vision, people visit app.olympus.finance to access liquidity, to buy and sell OHM - they dont visit 3rd party AMM's. While visiting olympus.finance they discover they can price time through discounts and premiums through bonding. While visiting olympus.finance they discover Pro opportunities and snap up some partner tokens. By visiting olympus.finance they find a dynamic marketplace - worth revisiting on daily basis to look for opportunities. By creating this interest and traffic, partners are increasingly interested to join and build on Olympus ecosystem.
As has been mentioned already, some added clarification on the voting choices I feel is needed. "No change to reward rate" COULD be understood to mean that the APY will not change from its current range level. "Change to reward rate" COULD be understood to mean that the current APY will change and drop from its current range level. It's imperative that each choice is fully understood.
I speak on behalf of myself, an ohmie currently 85%+ percent down and came around November time. Personally the current reward rate projection is one of the things that keeps me going when the price of OHM is down. I would rather change the reward rate than no change.
Also for the long picture, if OHM is to be a reserve currency but also a very 3% to 6% for the institutions that would rather play save with their fund and (stake or bond) seems attractive proposition. 2% to 4% seems rather low. But then again what will happen to fiat currency at that point, we don't know till we travel there.
I guess I probably would be enticed by "no change" if we were in our bond centric future and ability to get more yield was an option.
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Zeus The way the choices are expressed confused me. you say "Implementing this with no change to the reward rate will result in lower emissions in staking". But then no change is in the same 470% region. I voted 'with change' hoping to achieve the end result of keeping emissions the same. But in reality this option was 'no change'.
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Re: reward rate change. I am thinking it would be more beneficial to maintain the current APY (increase reward rate) for two reasons:
perception- yes Olympus will be defending with the treasury but the decrease in APY at the same time may create the appearance of unsustainability.
We need to keep increasing supply. There's only like 17million OHM. Reducing emissions again so early seems counterproductive over the long-term.
I feel the safest choice is implement with increased reward rate. If we find that this rate of emissions is impeding the progress of OIP-93, a reward rate reduction OIP can be proposed to adjust.
bouttreetreefiddy We will still be emitting the same amount of OHM it's just some of the OHM goes to the LP/liquidity rather directly to stakers.
Per the reward rate chart (https://ibb.co/bdWcnqj), looks like we'd get higher reward rate…I'm ok with that
SUBGURU Take a look at his reward rate chart, https://ibb.co/bdWcnqj
I think people might not be understanding the reward rate change consideration. If we don’t change it, emissions rewards go down.
LP to MCap will increase over time as M&S weights price lower and increases LP.
What is M&S, and did you mean LP to Treasury ratio here?
Also, will people staked into LP positions count towards the expansion amounts? I.e. if a user sections off their ohm to the LP, will they forego the proportional supply expansion they would have compounded otherwise. An example would be if person A and B both have 1 ohm. supply expands and person A delegates to LP while person B keeps it in ohm. Next supply expansion, will person A and B receive the same amount?
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json Ah fair, so less emissions and less dilution as the LP OHM is initially unstaked (until purchased and staked). Am I getting that right? The math sounds tricky there so maybe I'm way oversimplifying.
Aside from the perception part of things ("its not sustainable they chopped apy in half to make it work ponzeus rabblerabble!!"), I can dig. Just gotta make sure the messaging communicates that clearly.
Will the rewards be the same for all potential pools? Like you'd get the same OHM LP issuance whether you choose to be in OHM/ETH or OHM/DAI or OHM/BTRFLY or OHM/SCAMCOIN?
Is it concerning that this relies so heavily on a function in uniswap-v2? People in a Curve LP would lose out?
Looks like I wasn't as clear as I should have been. The 'no change' option means total emissions do not change, but emissions to stakers would decrease. The 'change' option means total emissions increase so that emissions to stakers remain the same. my reasoning for supporting the 'no change' option is that we can supplement this decrease through OHM bonds, where OHM holders can convert to future tokens in exchange for a higher yield (essentially locked staking). I know there was a previous proposal to bring it to the lower bound so this would accomplish that, but not a hill i'll die on.
sirsean Will the rewards be the same for all potential pools? Like you'd get the same OHM LP issuance whether you choose to be in OHM/ETH or OHM/DAI or OHM/BTRFLY or OHM/SCAMCOIN?
Is it concerning that this relies so heavily on a function in uniswap-v2? People in a Curve LP would lose out?
yes, all pools enabled would receive emissions at the same rate. there's no risk here when it comes to gamification since you can capture the same amount if you just stake the tokens, but it is only available on uni-v2 style pools as far as i know.
BathtubToaster Also, will people staked into LP positions count towards the expansion amounts?
lets say as an example you have 100 OHM and staking grows at 1% per day. if you remained staked, you'd get 1 the first day, 1.01 the second, etc. instead you LP. the first day the pool stays flat, so you earn 1 (same as staking). the next day, people sell the other token and take out 10% of the ohm side; now you only receive 0.91. the next day, people buy the other token and add 20% to the ohm side; now you receive 1.12. etc. it scales based on whats in the pool right at the time of a rebase. hopefully that makes sense.
bubbidubb Anyone that wants to avoid the dilution of holding OHM in an LP, could simply chose to use gOHM instead of OHM
i think that this fragmentation is unhealthy for a few reasons. it:
- draws confusion due to very different units, where we want to maintain OHM as the unit of account
- requires a very deep OHM-gOHM bridge to route trades from Olympus pools to third party pools without custom integration (routers like ie 1inch will not do this)
- causes higher slippage due to the above
- leads to greater arbitrage drain because of both of the above
you can see these dynamics play out now with the (few) gOHM pairs that exist today
bubbidubb I fear this is a technology trap where Olympus deploys logic that builds on somebody else's old, inefficient v2 technology instead of looking forward and really maximizing the potential of v3 or possibly in-house AMM technologies
v3 is very difficult to work with by nature if you are optimizing for automation, as we are. current trends are all toward active management (the cost of efficiency). only solution to this is to provide capital to a custodian (gelato, gamma) who takes on that active management role with the cost of trust
bubbidubb Incentivizing others to provide liquidity works to weaken the pooper2 paper.
somewhat tough to work through, but i dont see this as the case since it is 1) always additive liquidity; 2) other pairs only push us toward walls when we trade counter to them; 3) already a possible dynamic with gOHM as you point out above innit
bubbidubb Promoting 3rd parties to participate in 3rd party AMM's promotes and strengthens 3rd party AMM's ecosystems. It does not strengthen so much Olympus ecosystem
bubbidubb In my vision
good vision tbh