TLDR;

  • Against if we design for a currency. For if we design for a decentralized bank.
  • Against because of KISS (keep it simple stupid)
  • Long term new large mechanic introduced to a relatively short term growth hack phase introduced problem?

It seems this discussion around lockups is linked to the high apy growth hacking phase we are in and thus the solution probably could be viewed as a temporary mechanic to the short term game that has risen. Size of that implementation should be adjusted accordingly and it would also be easier to stomach.

With most locking designs it seems we complicate the current value prop as a currency by a lot. To quote a great ohmie 'Your value will be preserved, but only if you don't use OHM as a currency.'

With this proposal we add an extra decision loop to every user who wants to use Ohm. Do you want to have your cake or eat it; and at what proportion would you like to eat it in the future?
That is a very complicated question to ask and adds friction.

As Graz mentioned, maybe vlohm could be tradeable so that the currency mechanics would not be diminished as much.
This proposal is put to another light if we step out of the currency value prop and frame Ohm as a decentralized private bank. Ohm represents the shares of the bank and lockuppers provide 'a service' to the bank by timelocking their shares off the market and thus earn a higher percentage of the bank revenue (rev and profit are a bit murky here). In this light this is a great proposal and I'm completely on board with it. Generally locking is used in crypto to lock up shares/productive assets.

What to do:

Scale down the proposal to a simple that people can stomach "Would you like to lock or not question to the user".
Eliminate timeframe from that question by a more simple solution;

  • The X multiplies by time the assets are idle.
  • Interim solution to the growth phase. A simple 30-90 days lock
  • Unstaking cooldown period of 7-14 days to dampen short term volatility.

    Happy with this, let's do it!

    Coud yes, but you have to work with human nature/behavior and use it as an advantage. Because unlock will mean dump time - that is human nature. We all want to make money and de-risk, so selling eventually is going to always be a part of it, no matter when the entry point and exit is, now or in a years time. Just not being able to de-risk for a year is a big fear factor, especially in crypto, and it will scare people away, that will ruin the protocol. Reward scaling will work and it avoids the exit>dump that will happen from lockup periods or lets just call them "term deposits".

      A lot of people brought up very good feedback and ideas. I am trying to provide my own two cents where I see fit and hope to clarify the situation a bit.

      • rotorless brought up the lack of a problem statement. I agree with that. The OIP is not well structured to lay out reasons for the proposed change. You would need to read up everywhere in order to understand how we ended up here. The problem as I understand it is that the protocol bleeds way too much rewards. This is an energy leak as described in my proposal to realize the price floor as tool for monetary policy. We give away more rewards than we grow the protocol right now. As such our backing decays at a fast rate. We want to fix this so that we can maintain a higher backing in a more sustainable way. And the reason we want this is to maybe, just maybe, be able to buy back below backing eventually. See my proposal. No alfa leak here. Move on Ser. Now, in order to stop the protocol bleeding rewards too much we need to reduce rewards and cap them. One idea was for people to get "fewer" rewards they could expect a higher price per unit if we remove circulating supply from the market. New reward structure and locking therefore go hand in hand.
      • badgerpawz brought up supply shock issues that could potentially occur. I second these concerns. To address these issues there can be used all kinds of mechanisms and we should seriously consider them. Two ideas I find most compelling to address supply shocks would be as follows. First, let's not cap it to 1 year. Let people lock for 5 years if they want. If we want to not increase multipliers from the 12th month of locking people could remain locked with their 12 month multiplier until their individual term ends, e.g. after 5 years. Second, linear vesting after 50% or 75% of locking period. So if you lock for 1 year you may start to take out rewards after month 9 but only to a limited degree of e.g. 20% of your full rewards spread over 3 months. I think these kind of mechanisms would greatly help even out supply shock scenarios. On an ending note, in worst case there would likely be only one supply shock scenario, which would be when the majority of locked allocations ended the very first time after introduction of the locked stacking mechanism. Because after the first round of vested majority the system would run way more smoothly since people come in every day. We naturally spread over time.
      • Graz brought up locked stakes to be used as collateral. I suggested this to Zeus and he agreed we could do this in the future. The idea here would be that since Olympus has your stake, it might as well give you a DAI loan on it. So you could realize yield on your future rewards right now against your locked stake. I am not saying we will do it like that. I just want to put emphasis on the need of making your collateral in form of a locked stake productive. I am very big on this and will try to push in this direction in the future. And I believe we can come up with a reasonable solution for it eventually.
      • Baitfish brought up strategic issues around our goal of being a currency. Let's say we say we want OHM to become a currency. That does not mean that OHM will be a currency from day one. Anything that aims to be a currency needs to go through a long process of bootstrapping. Traditionally these processes took generations of time. I do not see how locked staking is against our end goal. Most concerns brought up around this proposal are rather concerned with short term effects. If our hypothesis holds true that locked staking paves the way for our future success we are more likely to make OHM a currency, if this is what you want. Olympus is not about a typical trading cycle. Never has been.

              I agree, this will also stop people just shaving off the profit from each rebase.

              i dont get however how this would extend the runway, wouldnt this shorten it with the larger boost?

              Zeus I do want to see a way to get rewarded the longer you stake. But to loose everything if you unstake doesn't seem like the right tthing to do. It would be nice to see it built into the protocol where the long you have been staked the more reward you get.
              But if it has to be a separate thing then don't 100% punish people for dropping out early. Life happens and sometimes you need to liquidate. I would suggest a tiered system where if you unlocked before your term you only get a % of what you should have gotten. Maybe like this
              0-.2499 of your time staked you just get the normal rebase.
              .25%-.4999 of your time staked you get 10% of what you should get
              .50%-.7499 of your time staked you get 35% of what
              .75%-.9999 of your time staked you get 65% of what you should get
              This way it is not a total loss. It doesn't reward as well as if you were in the full time but you don't lose all your time helping youyou have invested in helping out OHM.

                  cabanaboy1977 we need 100% slashing of rewards if you break the contract that you agreed on in the first place. Think about the game theory here. We need it. It is good. You are not sure if 1 year locking is right for you? Good, then do not lock for 1 year. And now somebody else has a different strategy and preference and they will lock for 1 month, or 6 months, or 1 year. And because of the strict rules we spread vesting periods which will help get the locking into a smooth rhythm. That means we prevent this big single dump after 1 year that everyone is afraid off. Also when somebody breaks the rules, their forfeited rewards remain within the distributor contract from which it is given to the real ohmies. That sounds good to me.

                      xh3b4sd I totally understand 'punishing' people for leaving the staking earlier. I honestly think the best way would just have the protocol reward people the longer that they have been staked. Like a rolling rebase that gets larger the great the days have been. But since that is not what we are doing here and we are not all Whales, we should at least give some sort of reward for staking. Even if it is just the normal staking reward. Life happens and you can't 100% prepare for it. So right now 1 year staking is great for me. But I can't predict that my Grandfather will get caner, my car will break down or someone in my family looses my job. And just because of that I loose all the time and effort I have given to helping out OHM? That doesn't seem right. We should get something. Heck maybe even build in a waiting period of 5 days so that people that do leave can't time the market?

                      • Graz replied to this.

                          kschan Thank you for setting this out. It is helpful. But changing the product is not the resolution to decreasing participation. Changing a product dilutes strength and credibility of the product and is more likely than less likely to alienate existing participants.

                          The presumption as to why participants leave the market is a huge presumption. Nobody knows what other people are thinking and also since the high APY is ever present, it is less likely that participants leave because of the presumption. Then there are macro effects of the price of Bitcoin which is proven to correlate to drawdowns across crypto, Eth gas fees are high, so the timing of the observation matters somewhat. The best solutions are more likely to be simple and uncontroversial.

                          There is a maxim in capital markets that teaches that capital will seek the highest yield, another truism is people are motivated by incentive. If the OHM incentive is already high, but participation is low or decreasing, the simplest inference is not enough non-participants know about OHM, or they pass over OHM after discovering it. Get in front of these issues and participation will more likely go straight up.

                          Some common reasons to pass over high yield opportunities include thinking it is a scam and not being able to understand what the opportunity is. For example, the custom and practice of the trade of how most investors do a quick check for a scam is all over YouTube. OHM can definitely fall within that quick check. To get in front of the items on the scam checklist would resolve this ie likes on CoinGecko, Twitter action etc. - because this is the custom and the practice that is adopted by the mainstream.

                          Before one gets to that point, the opportunity has to be discoverable and onboarding has to be easy. The OHM opportunity is obscure and hard to find, and there is single access point (exchange) and gas fees are high.

                          Reprograming and changing the protocol will not overcome these issues, and I am sure there are a few more. If we have the conviction the protocol is technically solid to achieve its aim, then the answer is less likely to change the product and more likely to focus on the issues that are ever present.

                          So we might ask the question what are the barriers we control that prevent new participants from onboarding? instead trying to pretend to know and guess why 1000's of individuals decide why they need when they need capital.

                          Just some thoughts this morning. Best.

                            We are only at 50M market cap. We are still in an aggressive growth phase. We need more ohmies to grow, don't underestimate the barrier to entry that a forced lockup period forces on an initial purchase. I know I wouldn't be here if I had to lock up my capital for months when I aped in. New investors want flexibility if things turn sour immediately, and I know that we're trying to deter short term scalpers here but we'll also be scaring off speculators who eventually turn to long term investors.

                            Would you commit to a lockup period on a protocol you haven't spent time with in order to build trust?

                            I understand the benefits of this proposal, and generally agree with it, but I think it's too soon. Are we letting this downturn scare us into a rushed decision?

                              KirKanos974 I agree that if short selling is incentivized by predictable rebase timing, then randomizing rebase timing should function as a disincentive.

                                Against, for the reason of such added complexity during a phase in which we're trying to grow. I think this will be a turn-off to potential buyers, especially with the market cap as low as it currently is. Recruitment of new OHMies to the platform will be difficult with all of these locking terms for folks to navigate.

                                I agree with this; however, we need a 13 month lock-up for annualized 420% dedicated only to those bad at math.

                                full send, can we just scattershot this pretty please???

                                I wonder how much locking in scares off people not too familiar with the project. I am also wondering if just "length of time you have staked" is enough to base rewards off. So the longer you have staked, the more rewards you get. If you unstake, your reward multiplier gets reset. The multiplier could also be slow moving too, so it takes a while to get the bigger rewards.

                                A positive thing about the staking right now is that you can unstake at any time, I just wonder if that makes people trust the protocol a bit more.

                                Might be worth looking into Pickle Finance and their DILLs, they use a set lock up time. As a personal anecdote (I am just one person) I wasn't too sold, especially when I wasn't familiar with the project. I'd want to of course get the most PICKLE rewards, and the maximum time is a lock in of 4 years although I am not sure I trusted the project enough for 4 years so it put me off. With Olympus it was nice to know I could take my OHM out at any time, easier to support and commit to the project.

                                Considering that I was one of the first to push locked staking, super stoked it's actually getting drawn up as a proposal that most of the Ohmies support and am honored that Zeus used one of my main suggestions about being able to unlock with the penalty of forfeiting your rewards to the pool cause I believe people should always have control of their money. Uber excited for what locked staking is going to do for Ohm once we get more exposure with the Frax deal and have a pool up on Uniswap. 3,3

                                • Graz replied to this.

                                  I am not sure how to feel about this. It introduces complexity as mentioned by many people here. So many core changes in such a short time for a two month project. This going to backfire soon.

                                  I feel people only concern is about others hopping in and out to benefit from rebases but we need to think beyond that instead and work to make this project attracts more people more partnerships and a use case if any.

                                  I surely don't believe in scattershot voting anymore cause it feels it's already been decided even before posting there. So many Qs about these top wallets which could be ran by one guy/team but anyway best of luck 😊

                                    You can't introduce functionality without complexity imo. We can stay in the simplest form, in return we don't have use case.

                                    Quick notes before reading

                                    [English is not my native language so please bear with it]
                                    [I’m pretty new to OHM and I consider myself - dump money]

                                    Basically, I almost completely agree with ''retronym'' - Idea is great but it is coming in a very early stage and if it will go through the implementation is also very fast…

                                    I truly believe these changes will be so significant that it will scare new buyers and potential long term stackers. Especially now when the market is so do speak, ,,down’’ and volatility levels are on the all time high. Lot of new people are now discovering the cryptocurrency as a whole - these newcomers consider these 3 things as the most attractive -

                                    high returns,
                                    no inflation
                                    complete control over your assets 24/7.

                                    By implementing this new proposal in a such early stage will basically make this coin unattractive to new potential buyers. Returns will be limited only for locked staking, inflation will be measured by the whale selling, you will be forced to choose between control or profit.

                                    New money is the key to grown so over complicating things, setting rules and trying to limit accessibility will mean the attractiveness of OHM will be over shadowed by other coins. I completely understand the base question of risk and long term stability. But I truly believe that risk is the part of the success equation of this coin.

                                    Another strong selling point against this proposal [at this time] is that people in the community have still fresh memory of robinhood app not allowing users to sell and withdrawn their assets so there is a possibility people will look at this as a way limiting their options with the assets.

                                    Just to clarify my opinion [if someone is reading it] Idea is great timing is horrible.

                                    On the other hand I completely understand the need of fair rewarding system for lockers vs. the multipliers. The only question is if this is the right time when the mcap is around 50mil. And only now after coinbase allowing to track the coin are people getting familiar with it… Maybe wait for this cycle to be over and test it as an option on the next cycle…