OIP-63: Reward rate adjustment

Im curious to hear everyones opinions on needing THAT MUCH runway.. I believe we need the balance of focusing short term narratives is just as healthy as focusing on longterm vision. Lets be real 1 year in crypto is like an eternity for most ppl… why isnt there an inbetween milestone because 10million to 100million supply is a LONG time and im worried 1000% apy wont be lucrative to most people especially when there is LOTS of competition on the market now.. why not slowly reduce to like say ~4000 apy till 50million supply and drop.. I know these apy drops are for the health of protocol but 700 day runway seems crazy to me

Proactive over reactive. Let's do it ahh to smooth out this volatility and reduce the scalp trades

MaskJiro I think that's the goal, we're migrating our liquidity first.. once that's done we can resume bonding

I thought this was going to be voted on at 10mil. what is the rush. runway seems good. emissions will decrease but that probably wont help price that much.

Meme APY was for gaining attention.

Now that we have everyone’s attention (hi Congress), we don’t need the absolutely insane APYs.

dio emission reduction actually helps reduce sell pressure. Also this will help with liquidity and backing of the token which can both have positive impacts on price.

json yip i get all that. but, as i understand it, supposed to do this after we hit 10mil, Jan Feb. whats the rush

The rush is that the token becomes more useful when the APY isn’t crazy. The way we generate wealth is making the token useful, not with an massive APY.

I wasn't in favor of timing or speed at which last reward reduction was implemented. BUT, I did see how insanely helpful it was in setting up major price gains through Sept and Oct. Those are all wiped away now, but seems that's largely related to sell pressure from big holders gaining tons of OHM every rebase.

So, while I wish we could keep rewards higher for longer to grow my own bag, I understand the necessity of this reduction. Reduced volatility will inspire investors across all these new chains and lay a foundation for what should be a massive growth period. Plus there are a plethora of partnerships to consider now.

Super high APY has been a seeding period and I'm grateful to have been a part last 8 months. Wish my bag was bigger but we're still very early (I believe).

@shadow This is an important OIP, so to be fair to gOHM holders please allow gOHM voters to vote on snapshot for it. Or at the very least allow voting with the new sOHM version so holders can swap to it temporarily.

Otherwise, gOHM holders may be forced to buy back the old sOHM version to vote. Thank you—just want to make sure the voting process is as fair and easy as possible especially to those who have migrated to gOHM as suggested.

shadow It is preferable to continuously match the growth of the protocol with the growth of supply through the reward rate and not have the discrepancy shown through the price as that causes not only volatility on the market, but in our revenues as well.

Rebasing reward rate should match demand, otherwise price goes down, as we've seen lately. The APY is only sustainable if people keep buying the discounted token sales through bonds (docs). Reward yield of 0.1587% gives daily growth of 0.4769% and APY of 468%. With 5,381,906 OHM staked right now, the protocol mints an additional 25,664 OHM to achieve this daily growth, equivalent to $10.2 million sold below market value at discounts of 1-5% to bond buyers. Without an equivalent amount of demand from bond buyers, the price will continue decreasing.

Daily revenue figures show a decline from a 7-day moving average of $17 million on October 26th to $3.8 million December 8th, a week ago, with more recent figures even lower. The Dune dashboard says this may not be accurate due to the migration underway to v2, but that started December 11th. Do we have a better estimate? The $3.8 million of daily bond buying demand would support an APY of 87% at the current price, or the above 468% APY at an Ohm price of 114. See my work in this spreadsheet.

If those APYs are unappealing, or if the lower price is unappealing, or if you think revenues are lower and going to remain low, or if you worry about the 11% drop in Ohm staking today, I would suggest you get out now.

I am generally in favour of reducing APY and reading some of the other posts / concerns here, this could be an opportunity to address other issues in one go. What if we scaled APY based on time staked, open to what this could be but as a talking point say >60 days = 3000%, 30 - 59 days = 2000% and <30 days = 1000%.

Weightings / time should be debated. Importantly, those who sell and buy back in will start over as the reward rate resets. This would not only reduce APY, increase runway and increase treasury but also reduce scalp trades and dumping which is covered in other posts on this forum. I think this would smooth out the growth along with increasing trust in the overall project for holders and new entrants alike, both of which are essential. This also directly lines up with the 3:3 principle.

Will vote in favor, we're transitioning to a true powerhouse in the ecosystem. APY reduction will help stabilize the volatility and flexibility moving forward. Benefits demonstrated above in regards to policy adjustments and further growth.

(3,3)

epik maybe the sudden drop will cause chaos in investors.

json I love your phrase:"this will help reduce selling pressure on the token since we will be minting way less". That's a kind of balance between high APY and low price, because early whales are keeping exiting with their daily rewards. How to get a balanced point in between is kind of an art, failing on this will resulting price behavior in the past months, or investors aping out for higher APY competitors.

In total agreement.

As a long term investor I prefer having the knowledge that I'll get more sustainable yield at a slightly lower APY. Crypto could go sideways for an entire year here. Further decreasing the yield and thus increasing sustainability will create more scarcity and balance the yield vs the IV generation. Ultimately getting us closer to a more stable Ohm price.

Ah shit, here we go again.

100% for this proposal. For the new people that just joined, this is the 3rd time APY is going down. The first two times that APY went down, bond revenue went up, more partnerships were created, and Olympus has done nothing but grow.

1 year runway may seem like more than enough for our space, but let's not forget what's happening with the world right now. the Fed has begun tapering and will rate hike soon. Whether we like it or not, Crypto is still widely affected by the decisions of the policy makers in tard tradfi. IMO, runway should be 3 years (1095 days) minimum. Worst case, no one bonds (highly unlikely) and we need all the runway that we can get.

Is it possible to design for the reward rate to adjust smoothly related to the circulating supply based on the agreed reward framework? For example we are now on 7 mil of the 10 mil reward framework, it should automatically adjust to 7/10 of the range of 0.3058% to 0.1587%.

Im all for the reduction, i want the treasure to outgrow the reward rate so we can see backing value increases.