I caught some of this in Policy yesterday but got the wrong end of the stick so need some clarification please sers..
Firstly, Inverse Bonds…does this now mean whenever OHM price is ABOVE the "Buy" part of (wall, wall) Inverse Bonds turn on - or; only if the moving average bottom price falls WITHIN that bottom range, Inverse Bonds are triggered, or; Inverse Bonds trigger if the "Buy" wall runs out of powder and price falls BELOW that range?
At the point IB is triggered (is this manually issued still or programatically?) users can start exchanging OHM for assets from the treasury, at a premium to market price - correct?
If so, this is concerning to me as it starts a precedence of the protocol (dipping into its savings account) in order to scale back previous success in OHM printing. Is this a legitimate concern?
Sure, we burn the OHM which MAY assist price…but it feels a waste to get rid of that OHM…the whole point is to build thick OHM liquidity. It feels counterproductive to burn it.
We should also be looking at ways to aid the protocol in protecting its treasury.
My understanding is we are just looking at ways to direct the OHM liquidity (of which there is a lot) to stabilise price, right? I don't think this should be done at the cost of losing treasury assets.
The treasury should be "Liquidity Provider of Last Resort" - similar to a central banks role of "Lender of Last Resort."
OIP-93 allows users to provide AMM liquidity and receive their OHM in LP token form as a rebase and AMM fee's in exchange for some Impermanent Loss, right?
Can we not use a mechanism, whenever we fall to the bottom price range of the 120 day moving average where the protocol "soft rugs" by uncoupling LP's on AMM's and incentivise's stakers to provide liquidity in its stead to AMM pools in exchange for:
- AMM fee's
- Regular rebase rewards at normal rate as per OIP-18
- The unpaired OHM as an additional reward for taking on the role of primary LP (which hopefully offsets IL)
Drying up OHM liquidity on exchanges works the same way burning it does, except its not permanent.
The treasury gets to keep its LP pair-assets and redeploy.
No OHM is handed in for burning...instead becoming an LP is incentivised for a higher OHM reward rate.
Then once price rises, protocol becomes the main LP again. (Or maybe we keep stakers as main LP's to soak up the excess OHM from breaking LP's until we hit equilibrium).