Good idea to start to use the reward rate together with IB as a flexible lever.

It would however be nice to see some research in the future on how to make it less governance heavy, same for inverse bonds and range stability.

We don’t want to have the policy team looking at charts every day and adjust these levers constantly. We need more autonomous systems. But I understand that’s not possible today.

(3, 3) lads

Against this proposal. Lower costs of dao as a first step. Why do we currently need 700days runway? Cutting apy is the worst thing that can be done now, in case internal bonds and range bound price is availiable, sure lets do it, but at this stage I consider it as another nail in the coffin.

    Higher emission gives the current stakers a larger share of the pie. Isn’t it sensible to reward who keep 3, 3 ethos in this bad market condition?

    I don't mind this considering the condition of the crypto market. But I am a bit concerned, if we're having to go to the extreme end of the reward rate drop for the supply range already, and we're not even 30% of the way to the next range. That means we will either be stuck with this reward rate for a long time, or what I suspect to be more likely, it will have to be reduced again before we hit the next supply milestone. Breaking the APY structure and potentially damaging confidence in the project. I understand even if that is the best way to go forward, but I do think if the policy team suspects there is potential for that being the likely outcome at some point soon enough, it should be communicated as early as possible.

    Wartull i would prefer a more gradual reduction but i sense urgency in the need to deal with selling... inverse bond capacity can only take so much, it's using our treasury dai to fund? thus lowering reserves.. a conundrum...we've got to be able to weather this storm/bear and macro is shit and will be for a while

      @abipup could you explain to me why we go with a reward rate reduction rather than:

      A new framework that gets switched on when Reserve Bonds are off?

      I am asking because it is unclear to me what the benefit is of having an APY while Inverse Bonds are active (wouldn't backing increase drastically if APY is close to zero when we are under backing?).

      Also, a little bit uncorrelated to the topic perhaps, but:

      1. Is there a roadmap in place that shows the policy teams' strategy to make the reward rate adjustments an autonomous process?
      2. Are there talks on how we market APY? To me, it feels more as a way to not get diluted, rather than an actual form of yield.
      3. (edit) Q: Shouldn't APY be based on: Reserve Bond Income + Premium Target?

      Thanks in advance for clearing this up for me.

        Tlacka

        It's important to understand that staking is merely inflation and does not reflect any actual yield. High APY => Quicker price depreciation bc backing per OHM goes down hand-in-hand. Lower APY => Lower price depreciation. It's a net-zero action.

            Wartull c'mon, lower apy does not equal lower price depreciation necessarily, price can depreciate for any number of reasons, so to say that is a bit disingenuous to me- because if lower apy implied less depreciation all things considered then everything without APY would be sailing high…as a metaphor, but that's just not the case- now it does lower inflation but, again this may not cause price [appreciation or depreciation], it's multitude of factors is all i'm tryna say. i could go on in this vain but that is not my intention or poin,t i'm just sayin keep it real-

            one glaring example: BTRFLY announced a cut apy to 50% wen price was near $200+ it's low was ~11+ and now sits at 15-16, cutting apy did not stop depreciation or help appreciation, it did help with dilution/inflation, it's multi-factorial… this current mkt enviornment is brutal and sentiment/buying in general has tapered considerably across all of crypto… we need to stablize and move ahead…I get it.

              Wartull this isn't necessarily true anymore since we changed APY calc to use circulatingSupply rather than percent staked. We have maintained a constant 467% for many weeks now.

                  dr00 Circ supply also changes with inverse bonds burning OHM, so not very reliable.

                    I'd prefer a smaller drop because if we have a prolonged winter which is very possible, even likely at this point, we will likely need to further utilize this lever and I think breaking below the current bottom which would be the necessary if we go to the bottom now could be a death sentence. Cut the reward rate by .01(25% of the range from the max to the min) to .1488 from .1588 and revaluate in a months time.

                    This feels like J Powell moving interest rates by like 10 point basis in 1 go. Obviously doing to little won't do anything, but too much in 1 go could be a catastrophe.

                      Heavily in favor. From a long term perspective, this makes a lot more sense, as it can keep OHM more stable, possibly bringing more confidence back to the project.

                      The main criticism of OHM I see is people talking about the initial crash, so if we can begin to push the narrative of true stability & sustainability, that could fit quite well with the current bear market favoring projects with fundamentals, and could bring lots of confidence back as people see OHM getting closer to its original goal.

                      dr00 honestly I'd prefer to lower the rate even more than what's allowed by the current framework. Imo even a 266% 1 year network growth rate is ambitious given the market uncertainty.

                      High APY will not encourage buy behavior, that meme ship has long sailed. Protecting backing and effectively using our inverse bond tool is what instills real confidence in the protocol

                        Yella thanks for the questions!

                        Overall a new framework will take time to carefully build out and propose. The reward rate change is more urgent imo as we lean into inverse bonds and market outlook shifts more negative. No promises given but new framework is several weeks away.

                        There really isn't a benefit to anyone of having staking rewards active when the protocol is stagnant. We're just trading supply for price.

                        To answer your numbered questions:

                        1. No roadmap for that, but we are working with engineering to make sure the mechanisms needed by the v2 framework can be automated.
                        2. Since the beginning there's been arguments about how to market APY. We'll be in a better place when it gets renamed to a more accurate term because you're right, it's not USD yield.
                        3. Still TBD but it could be based on premium, or a target % of OHM locked in OHM bonds, or a combination of those and other things. That's all going to be part of v2 framework

                            Trinquin if we have a prolonged winter, wouldn't it be better to reduce as much as we can now? Each month we sit at the maximum is exponentially more OHM as a future liability.

                              Against this proposal.

                              We won't be voting against it via Abachi (~8000 votes) since that will require a vote on our end, and this will probably be pushed through much before that. I will however vote against it personally.

                              Before making these decisions please consider:

                              1. The flywheel also works in reverse. Every single DAO has reduced and gone into a negative tailspin from there on. There are real repercussions of this proposal where folks will remove supply from staking and exit.

                              2. The yields and rebase is what gives stakers a revenue stream. Yes they sell and it adds pressure, but this allows them to retain the original stake. A god send for a bear market. If you remove that, what the point?

                              3. Before making any such decisions, alternate ways of revenue should be explored. Reducing APY is simple, but adding it back will not be as much. Pro bond rev, partner token rev should all be realised into reserve assets (btc, eth, usd).

                              4. Reduce inverse bonds to BELOW premium. In a bear market, asset backed protocols should be trading below premium to offset for risks and emissions, yet our inv bonds do not reflect that. They provide support short term, and in extreme volatility, but they also drain the treasury. If you place them below the premium, the treasury is always in profit and people can still exit without slippage or sell pressure on LPs.

                              A note on OHM.

                              The rebase allows protocols to hold onto OHM and help grow its economy. We at Abachi always intended to use OHM as a means of incentives and back in december were very cognizant that the price may trend towards $1. The emissions offset the price reduction.

                              This means instead of paying in our own token, we want to pay out in OHM to incentivize pools etc. This is an ideal situation for us because OHM is liquid and we acquire more OHM as we grow to pay out incentives (see discussions here: [ABIP-14] [RFC] - 3²,3² Open gOHM bonds up to 33% of treasury - Governance / Request For Comments - Abachi)

                              The focus should be in using OHM as a currency, as a pair and providing OHM out to protocols to shore up their LPs. If the price sticker is a shock to most, it should not be, this is what everyone bought into. It literally compounds so all you need to do is buy below the premium.

                              At least would love to see what are the plans to get the flywheel in motion again and bring in revenue if emissions are cut as part of this proposal. How much does it help backing go up, how much does it help in revenue realised. How much does it help in adoption.

                              One of the reasons, I'd say the main reason people bought and staked ohm was they liked to see their number of tokens go up. Then gohm came along and we shrugged cos we inherently knew, that the accumulation was still happening.

                              Now we're shifting again, lowering the apy ahead of schedule, removing further rewards and yield at a time when the price has cratered.

                              Have you considered if this goes wrong and we go rapidly into reverse, the apy now not worth the risk / reward of investing / staking in the protocol?

                              Also, why max reduction or nothing? Surely there's room here for a 333% apy marketing event?

                              Firmly against the reduction personally.