• General

  • Proposal: Locking staked Ohm for rebase rewards for a month

I like your thinking here and something needs to change as this problem is likely to get worse if not addressed. We need to think more laterally though as this just kicks the can down the road a bit. Also, see similar post by Corelli100 as most of the whale dumps are definitely coordinated across multiple wallets. OHM's strength is also it's weakness - easy to get in, same APY for everyone and easy to get out.

I think by spreading the rebase across multiple timeframes will help reward long term holders without cutting off new participants. So just like we have 7 hour rebase we should also have others, say 30 days, 60 days, 180 days etc. This could easily be done through the existing staking mechanism. This would be a strategic evolution for the protocol as it would now present multiple exit points but importantly across multiple time horizons and would, along with tighter governance, help dilute the whale bumps.

Take this further by structuring the APY differently for each time horizon to influence behaviour such as much lower APY for 7 day terms and rising for others. This would build on itsok's proposal by allowing more governance here and would eventually create hundreds of relatively fixed OHM positions as Stakers need to pick their duration when staking, forcing them to really think about their own strategy. Do I go for 1200% APY for the 7 day or the 2156% on the 60 day contract, and that 6800% is tempting on the 180 day contract…

This framework also has the benefit of being able to plug directly into both the ethos and mechanics of what a DAO truly is, along with the algo controlling the APY across the different Staking horizons offered. This could work equally well through the current bonding system too.

Net result:

  1. Breaks up or at least frustrates the dumping of whale wallets (combined with more governance)
  2. Encourages new participants, perhaps even more than currently as there would be a wider appeal to different risk profiles
  3. Creates an ever increasing number of exit points as adoption grows, adding to the overall stability of the protocol
  4. Continues to support the long term holders, in fact with the right algo calibration they would benefit more than now.
  5. Maintains the 3:3 game theory principles. In fact, executed well, things could get a whole lot more fun.

    Best option is to introduce price of entry - first re base after entry does not return yeld and distribute earnings to existing pool participants instead or burn them.

    If you enter you just miss first reward - acceptable price to pay in my opinion.

    If you need to get out - you will have to pay that price in lost earnings again.

    Anyone swapping in and out will not earn rewards.

    This folds perfectly into game theory concept here as leaving the pool has a cost now so there is incentive to stay.

    Another way to implement this is to charge a fee equal to next rebase reward of he deposited OHM upfront at entry and that will make it easier to implement I think.

    I think price of entry may discourage new entrants, especially those just looking to try with small initial stakes. Whales would just see this as a cost of doing business as they are selling high and then as Corelli100 says getting together to sell at once and pushing the price down. Many then buy back in and the cost of a single rebase would be a drop in the ocean (whale joke!) for these guys. Anything we do needs to encourage greater adoption and less concentration whilst still being open and accessible

      Platinum_Duck

      We have to clearly define our goal, which to me is:

      1. Prevent users from leaving the pool between rebases
      2. Do so in a way that have least impact on the average user.
      3. Make it easy to implement from development perspective.

      1

      My suggestion will make it so that anyone leaving the pool after rebase will have to miss next rebase as a result.

      Jumping in and out will actually remove rewards, and if fee is changed upfront leaving the pool will lead to losess.

      2

      This has minimal impact on average user, fee of one rebase depends on the amount of money user is placing in the pool, if you deposit 10 ohm you will pay higher fee than someone depositing 0.1 ohm, the cost is exactly next rebase earning you would get based on deposit amount. It scales with your deposit so that you simply miss first payout. So the cost is the same for everyone entering the pool in relative terms and this fee adds an opportunity to add burn functionality for the protocol. Just burn this fee.

      3

      Adding a fee to be paid based n next rebase is probably easiest form perspective of development time. No need to track or store anything, decision and transaction happens immediately.

      I do not know how relevant this issue really is, it seems like ohm tokens will be retired and only exist as index.

      From V2 guidance I remember that sOHM will stop rebasing in few months and it is suggested that you convert OHM and sOHM token to gOHM.

      My suggestion is to move to AVAX gOHM because of much lower transaction costs.

          i agree with your thought process but i do have a slight adjustment to the time line.

          it does not matter if people have small holdings or larger holdings they all need to be treated the same.

          given your lock up period and withdrawals are so short ( all within a month ) i would be inclined to increase the lock up for 6-12 months and keep a max withdrawal of 10-20% of total holdings for all participants looking to withdraw daily/weekly/monthly from the rebase reward within the lock up time period.

          This example goes for all holders - lets just go with the 10% if you are holding 100k worth of OHM.

          current daily return from the protocol 1.2% / $1200 - 10% withdrawal =$ 120

          current weekly return from the protocol 6% / $6000 - 10% withdrawal = $600

          currently monthly return from the protocol 24% / $24,000 - 10% withdrawal = $ 2400

          This keeps entire ecosystem in a stable state and everyone knows what they can withdraw at any given time.

          People looking to withdraw all of their holdings instantly should then have the option to pay an early exit fee or sign to have a withdrawal exit period of 5 days which then decreases the early exit fee by 50%

          Early exit Fee for peoples total holdings 2% which is then directed into the treasury.

          5 day withdrawal period would then come to 1% which is then directed to the treasury.

          TY

          DOS

            DOS @ @ Alinor @itsok It's the penalty / fee thing that gets me and Alinor is right about keeping dev time to a minimum especially after v.2 What about taking this penalty / fee idea and completely turning it around or at least reframing it. Do this by using a reward multiplier based on time staked. I still believe we need longer time horizons or at least the option of.

            Something like this<30days = 1x reward, 30-60 =2x, 60 -90 =4x and so on upto maybe 10x. This is effectively a penalty or fee on short term holding just presented a different way which I think wouldn't put off new entrants.

            The big deal here though and to address itsok's post is that if you sell at any time which you are free to do, you drop back to 1x reward when you buy back in. This would discourage whale dumping by making it more expensive as a strategy.

            • DOS replied to this.

                  I think we are not redesigning how rewards are issued - we have to focus on the problems that was presented by the OP, we want to discourage those who swap in and out of the pool, not give more rewards for those who stay for months.

                  Here is an example of how my proposal will work:

                  ==> User A deposits 10 ohm, lets say rebase interest is 0.5%

                  transaction goes like this

                  Fee: (10*0.005)=0.05 ohm

                  Deposit 10-0.05 = 9.95 ohm deposited in to pool

                  Fee burn 0.05 burned

                  User A now has 9.95 OHM staked

                  ==> User B deposits 1 OHM, same debase fee of 0.5%

                  transaction goes like this

                  Fee: (1*0.005)=0.005 ohm

                  Deposit 1-0.005 = 0.995 ohm deposited in to pool

                  Fee burn 0.005 burned

                  User A now has 0.995 OHM staked

                  Each user simply paid their next rebase and that is it - that is the cost of entering the pool.

                  It keeps people from swapping in and out and the lager the amount staked the larger the loss. User has to stay for at least one re base to recoup the loss(yes I know it will not perfectly cover the fee but it is not relevant)

                  Again we are not redesigning reward system - we want solution for swapping in and out. And that is easily done by attaching a cost that makes it impossible. If you keep swapping you will be loosing OHM and not getting rebase rewards.

                  I am strongly against locking periods, this is crypto things move too quickly for that. We have no idea what will happen in 2 months.

                    Platinum_Duck @Alinor yes i do agree with both explanations and finding a middle ground for both examples, i am not sure i agree on the burn mechanism though, having something in place that would allow the ohm treasury to grow from the .005 fee would seem more reasonable for the longer term.

                    possibly redirect those fees to an LP which could then generate revenue for the treasury in some form.

                        DOS Alinor No lock ins here, free to enter and exit as you like. Just that your reward multiplier resets to 1x if you sell and buy back in. it could be any number, even 0.995x as Alinor proposes. The key point is there is a cost to swapping in and out which directly addresses the whale dumping that OP is talking about.

                        Also no higher rewards for holding long term as 10x could just be the current APY, so shorter term holders would be on a lower multiplier. the savings here could go direct to treasury.

                            Hi everybody, I love the responses! I am new to crypto and dislike words like penalty for sure, too. English is my second language, I am german. If we would do this I would hope someone finds a funny word for this, not penalty. Also to the numbers and percentages and time frames: I wrote this up within 5 minutes and didn't give it much thought. I was hoping that someone would take this idea (and also assumed this might have already been discussed multiple times) and would put it into something genius like the whole Ohm project seems to be naturally. Have people considered bringing the 8 hour interval down to 2 hours or even 5 minutes? So the rewards will be smaller, potentially very small, but again, staying in is encouraged and holding. And of course, the APY stays the same. Thoughts?

                            This topic has come up and will continue to come up every time emissions outpace backing per ohm. The solution isn't locking, the solution is the framework that we already have in place to reduce the APY at certain supply levels. Just 3,3 and enjoy the benefits in a couple of weeks frens

                            Platinum_Duck @itsok In the past the Olympus team has investigated locking OHM for greater rewards but it never moved forward. While I think a lock would be an interesting idea, I think it would drive a lot of people away from the platform and I think might be harmful to the platform as a whole. Having an early exit fee could help, but it wouldn't really stop people from ultimately selling because they can sell once its profitable to do so whether after the next rebase or month later.

                            I think this is probably one of the most confusing parts about Olympus. The point of Olympus is not the APY. The point is for it be a reserve currency—think of it like an alternative to a real currency and being backed by crypto assets. In essence, the APY is designed to decline and the price is ultimately likely going to fall as time moves on. You can think of the APY as a reward for being an early adopter of OHM, but the platform was never designed to be a permanent high APY solution.

                            That in mind there are many OHM forks out there with much higher APYs than OHM and if it's the APY you're chasing you may want to check them out. However, for OHM itself the price and APY will fall until the market decides what the minimum APY they will accept is. Will it end up being a successful reserve currency—maybe? Only time will tell…

                              The main reason why whales dumped is mainly concerned about the price drop. Then can we set up a fundraising warehouse, and all funds donated to this warehouse will automatically enter the uniswap exchange to buy back tokens for destruction. Enough unity of everyone will inevitably lead to a sustained and steady rise in the price of tokens. Without the fear of falling prices, dumping sentiment has naturally disappeared.

                                LEO True, but check out other posts on whale dumping. The issue is that whales are potentially manipulating the price. One of the posts details 27 whales wallets all dumping 500+ OHM each and all executed within the space of a few minutes. That's coordinated behaviour and actually pushes the OHM price down just as it would any asset if the sale volume to market cap ratio is significant enough. For me, the issue is that this can really affect the perception of the overall project from many angles. the danger here is that this creates and then feeds a negative feedback loop and steadily drains OHM's market cap.

                                I've held OHM for some time and plan to for much longer but I think this is an area that has real downside risk.

                                    We already know how to solve this problem - it has been solved many times before.

                                    There are good and simple solutions and there are convoluted solutions.

                                    Good solution is to add a fee that scales with the deposit and charge that fee upfront. This will affect everyone in the same way where you will get money on next rebase and not current one. Very simple.

                                    Both large players and small players will pay same proportional price of entry and the cost remains low without affecting current freedom of entry and exit.

                                    This method is easy to implement because we do everything upfront and it solves the problem of constant rotation in and out of the pool with minimal cost.

                                    Other ideas voiced here, go in different direction, questions of manipulation should be discussed in another thread.

                                    Whales do manipulate things, but they also fund this project and have significant voting power, we should not demonize large players in our community because they only appear evil from the outside, it is just that their movements cause an earthquake for smaller players. At some point you may become a "whale" and realize that your normal daily business activities seem very evil to smaller participants - things are never what they appear.

                                    I posted everything I think I can on the subject and repeated my point multiple times, simple fee equal to next rebase of the amount staked is sufficient deterrent and will minimally disrupt current system, it is easy to develop and introduces opportunity to burn some ohm.

                                      Platinum_Duck Alinor @itsok I agree, there is downside risk and would like to find a solution as well. It's just I'm not sure what a good solution would be without affecting our current investors. I would encourage you to bring up your solutions in the Olympus work discord: https://discord.gg/gKsP8uRS. From there we can work on implementing an actual solution whatever it may be.

                                      I would be open to fees, locking staked OHM for additional rewards (but not reducing the APY as it stands), or other solutions. But again, I'm not sure how many people would agree.

                                      Personally, I am working on a downside price protection solution using Barnbridge SMART Alpha pools, but this solution isn't perfect because when you use downside price protection on the senior side you essentially lose a portion of your assets when the price of OHM goes up. You can ask questions and find more info here: https://forum.olympusdao.finance/d/460-gohm-smart-alpha-pool-feedback-requested if you're curious.

                                          This is a bad idea. No one likes their freedoms taken away. Plus we earn money on the buying and selling of ohm anyway. In the long run it will sort itself out as apy drops.

                                          a month later

                                          Alinor

                                          Unfortunately, my earlier post here is playing out in real time. I say unfortunately as I am still in and will stay but my earlier opinions still stand. I would be interested if your views are also the same.

                                            7 days later

                                            As a new member to the staking pool and I am planning to be a long time member, i am a small fish with only 12 sOhm (bought them when they were $350 each I would have staked more but the gas fees and transaction fees to get my initial investment here was rediculus and is going to take weeks to recover if i would have waited could have gotten 1 gOHM at todays price. Remember we are humans, and life sometimes throws you unexpected challenges and you may need to have liquidity. Penalties would only drive prospective staking clients away. Penalties and Fees are the old way of financial institutions and they are on the way out and being replaced with new innovative solutions.

                                            I do believe and increasing yield for a period of time then everyone at the same rate is one solution to be explored further. the issue is with large stakes, so maybe have a stake limit for a period of time then there able to stake more (scale in if you will) and scale out with a withdraw limit equal to the same rate. Just my 2 cents which is equal to my stake comparatively i am sure.

                                            Well, the proposal would stop me from giving tokens I earn from rebase to friends, to get them into crypto….that's for sure. And i was just getting started with it. Be careful that your good intentions might stifle growth.