Summary

Adjust reward rate to the minimum of the current range according to OIP-18. That would be a 0.1587% reward rate, which translates to around 1,000% APY. The adjustment would be spaced out across 4 weeks with the reward rate adjusting each epoch.

Motivation

Over the last year, Olympus has seen enormous success. The protocol has grown in strength financially (via its robust Treasury), technologically (through the introduction of innovations such as bonds and Olympus Pro) and influence. We have been in the current supply range as per OIP-18 (1m - 10m total supply) for around 4 months, and have not changed the reward rate since that proposal passed. 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.

Currently, we have to collect >$2m per day in RFV via bond sales just to maintain the runway. Adjusting the reward rate will allow us more flexibility with our bond capacity, as opposed to devoting so much revenue to RFV.

Also, the DAO is constantly looking for and building diversified income streams, such as LP fees, Olympus Pro, Incubator, yield farming with our Treasury and other activities. A lower reward rate will make it easier for Olympus to maintain its runway (with non-bond revenue).

Proposal

Adjust reward rate to the minimum of the current range according to OIP-18. That would be a 0.1587% reward rate, which translates to around 1,000% APY. The adjustment would be spaced out across 4 weeks with the reward rate adjusting each epoch.

This adjustment would bump us up to a runway of 700 days and give us breathing room to continue growing Olympus in 2022 in a sustainable manner.

For additional context, be sure to read the previous reward rate proposals and their discussions:
https://forum.olympusdao.finance/d/77-oip-18-reward-rate-framework-and-reduction

https://forum.olympusdao.finance/d/37-oip-11-reducing-reward-rate

Vote

For: Adjust reward rate to 0.1587% of total supply (from the current 0.2975%)

Against: Do nothing

Informal poll

This poll has ended.

    shadow

    Can someone give an "Explain like I'm 5" as to the pros/cons and tradeoffs of adjusting the reward rate now?

    Pretty sure I understand why the team feels the need to adjust the reward rate more generally, and more specifically adjust the reward rate now, but want to make sure I'm not missing anything.

    Thanks

      How does this coincide with the planned reduction at 10m supply? Would we spend the next 4 weeks lowering to 1k, only to have another vote and drop immediately after (assuming 10m in mid/late Jan)? Or is this that drop, being executed now and then we maintain at the 1k mark through the supply milestone?

        I assume this slows down issuance enough that "January-ish" would no longer be the estimate for when supply reaches 10m and moves to the next phase.

        What would be the new estimated timeline?

        I’m all for the reduction but would rather rip off the bandaid and accelerate this over two weeks instead of four. The last two week reduction seemed like and eternity.

          allornone I feel like usually slower changes generate less uncertainty. I think it makes sense to avoid sudden changes if possible, and this definitely feels like a time where that's possible.

          Introvertices This proposal is to begin a 4 week descent to the next tier now, ultimately ending at 1K APY (top of next tier) and staying there for quite a while.

          It seems reasonable to lower the reward rate I suppose, there are definitely good reasons to do so. But isn't the total supply under 7 million still? Dropping to the absolute minimum for the 1 to 10 million range may be jumping ahead a bit? I think dropping to 2000/3000% APY range would make more sense till we get closer to the 10 million mark? Seems like a reasonable drop from the 7000/6000% we've been at for a while now, but I'm no authority on how these things work, so maybe I'm missing something, or just have the wrong idea how to manage this.

            Since migration to v2 is under going right now, it's complicated. Dashboard / Dune data seem to have kinda "glitches" atm, and we are not very sure if we have correct data set of the project.

            Estimating timeline towards 10M supply, polls / votes should be prepared beforehand. That's understandable. So, could we wait for completion of migration? Then we need to have enough time for this proposal.

              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

                domPablo runway is only one part of why this is good. This issuance reduction will allow for greatet protocol revenue, greater protocol revenue leads to more value backing per token. And with this we can also increase our focus on bonds, whether that be on LPs or on reserve assets. Also, this will help reduce selling pressure on the token since we will be distributing way less. Just 3,3 fren 🙂 don't worry about "competition". Competition won't be won with high APYs, that is not the name of the game here. That's like checkers.. we're playing chess 😉 <3

                  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.

                      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.

                      • dio replied to this.

                        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).