Sting Staking
Reads: The act of swapping DAI for OHM close to the next Rebase, then swapping Ohm for DAI again right after receiving the rebase, in order to avoid volatility and make guaranteed gains.
Why is it a problem?
Sting Staking is a problem because it allows for scalping rewards evading (most of) the volatility. If this was profitable, more users would do it, lowering the APY for everyone effectively, while never actually being staked for a considerable period of time (subjective).
Why is it not a problem that needs addressing?
Facts before Opinion. When I run the simulation taking into account slippage and swap fees, disregarding the volatility of the price and the volatility of gas fees, here's the result:
It is obviously not profitable to do so, and since the current rebase will keep decreasing, it's safe to say it never will be profitable. Any profit someone could take from a short-lived investment is purely speculative and has little impact from the staking.
Now here's with the minimum amount of rebases needed to be profitable, 5:
As you may observe, you need to stay staking for a period of a little less than 48 hours in order to make a profit. And that's, again, disregarding volatility of price and volatility of gas fees (no gas fees are being deducted in the simulation).
We can conclude that whoever tries to stake for a profit, will need to expose himself, always, to the market volatility.
In Conclusion
This whole Warmup Proposal serves to add more complexity to the vanilla staking and (speaking personally) I'd rather have the vanilla staking actually feel Vanilla, Simple, Basic. There is no real problem being addressed, the most short-lived investments will be based on price volatility and not on rebase profitability. Time will pass, APY will shorten, and the statements I make now will still hold true.
Having debunked that short-lived investments are not made possible or profitable by current staking mechanisms, those mechanisms should be kept as simple as possible. Short-Lived investments will keep happening, because in the crypto space there's only one constant: that the price is always volatile, and that's ok.
