Yannis his feels like giving up freedom for safety and it freaks me out because I see this will divide community.
I have to say I don't share the view of 'giving up freedom'. For me, the core idea in this proposal is behind this rationale in the OP:
shadow Each OHM is backed by at least 1 unit of RFV, we can’t mint without that. The backing comes from our revenue generating activities, mainly bonds at the moment. When we sell bonds, we mint OHM against 1 unit of RFV and sell it at a discount compared to the market price. This indicates that our revenue depends on the market price.
So, if we were to just expand supply without taking this into consideration, we’d tank our market price, and thus our revenue. No revenue - no supply expansion and no reserve currency.
Here’s a simple example showing this.
Case A: OHM is trading at $500. We sell 20 OHM and earn $10,000.
Case B: OHM is trading at $250. We sell 20 OHM and earn $5,000.
To clarify: the sustainability of the protocol depends on maintaining a premium. The protocol inflation is exponential, but the number of bonders isn't. Over time, the protocol needs to adjust the reward rate as the number of bonders who show up decreases proportional to the inflationary pressure of supply.
The last time the reward rate was reduced, the price of OHM increased in multiples and the number of Ohmies grew twofold while the Treasury experienced surprising levels of growth. We can hope to sustain the growth curve linearly, but sustaining exponential growth is impossible even in the short/medium term.
Yannis I propose a different idea.
Leave 60% - 80% rewards as they are for now.
Take 5% - 10% of the rewards and market sell into liquidity for ETH.
Take 5% - 10% of the rewards and market sell into liquidity for DAI.
Now you got 10% - 20% more in DAI and ETH reserves every single 8h.
I can't say I really understand this, but maybe it'll help to clarify that the Treasury does not directly earn from 3,3, instead, the Ohmies do, and the Treasury belongs to all Ohmies proportional to their ownership of the supply. The people who are able to sell are Ohmies. The DAO earns OHM from bond sales, though those funds remain largely untouched. As to what might happen to that OHM, you can check out OIP-19.
Yannis Take another 10% or 20% of the rewards and market buy 10 projects (each 1% or 2%) which are voted by the sOHM community by signaling their staking to a certain erc20 contract on ethereum. Have it so that every contract is maximum taken once every 9 times.
Interesting idea, but this once again goes back to OIP-19 🙂. The community may vote on a new bond type, just like ETH bonds were passed just a few weeks ago
Yannis All I am saying is this: there are better ways to make OHM attractive and run for a long time than to "let's half apy by 50% and pump price so it's easier for -3,-3 to be dumping on 3,3"
APY has always been a faulty metric to express the compounding nature of sOHM.
At 15000% APY, 1 OHM -> 150 OHM in 1 year,
At 8000% APY, 1 OHM -> 150 OHM in 1 year, 1 month, 22 days;
so, visually, -50% APY seems like a lot but it's easy to forget what the staking sOHM curve actually looks like: starts off linear and turns exponential after a prolonged period of time which is exactly the nature of (3,3) 😀
All in all, I'm very much in favor of this proposal: the health of the protocol means that all Ohmies than (3,3) for longer. It opens more doors as far as partnerships go and that means more implied utility behind OHM, and ultimately a wider adoption of OHM.