• Proposal

  • OIP-18: Reward rate framework and reduction

billygoat33

Billygoat, exactly the point! If the purpose of this proposal is to solve inflation, "then lets solve the inflation - not just extend the runway for the top earners. This isnt rich vs poor, this is survival of the protocol. This proposal does absolutely nothing to address inflation, it just extends the runway a little bit - but eventually it will catch up to us again because we are using over the counter meds on the symptom vs treating the condition. If your hungry and I offer you a banana yet you want an apple and an orange… your still going to be hungry unless you accept my banana! This proposal 'does not solve inflation'. For those who say the duplicate wallet issue will affect the S-OHM curving idea, I would say "ok then, lets work on a plan and a proposal that solves both inflation and duplicate wallets - but lets not pass a proposal right now that does nothing based on the intent of the proposal as written.

If whales are reading this and not liking what is written, does it really matter they are selling everyday anyway to chase gains elsewhere after a few rebases in our protocol. And that should not be a problem it isn't for me anyway. Its their money to do as they please and that should not be faulted or discouraged - therefore we should not quantify that as a concern. But for those that remain, we need a healthy protocol that fulfills the long term mission statement. Growth and decentralized treasury is the mission statement. And this proposal isn't sufficient enough to achieve BOTH of those goals. We don't grow if we are putting out more then we intake - The inflation is in the S-OHM higher quantity curve not the narrow end.

We can truly solve inflation, then we can work on world hunger.

      billygoat33

      I'm very aware that we need new Ohmies. My simple statement had nothing to do with that. I'm fully invested in OHM and I have no funds to buy more as we incur this dip so I'm relying on the lower price to bring in more users.

      Let me expound on my point. Based on what I read and the sentiment we have in the community it would seem that going through with the new framework and rate reduction there is a good chance even more will sell in the short term. At some point we will hit a bottom and recover stronger than ever bc we have implemented these new changes. I'm voting yes to both as the smarter people have pointed out that it is better for this project in the long run. Right now for some reason people are already selling and bailing on this project. I'm suggesting we rip the band aid and implement the changes so that when we recover it'll be a healthy long term growth.

      I'm also annoyed at the fact that this whole project is perfect for anyone that has the HODL mentality and incentivizes it better than anything I've seen before. My comment was short and terse because of this emotion. I've have been in many other projects that are pure garbage and people manage to (3,3) better and it just doesn't make sense to me.

        dns

        I don't think introducing a form of socialism is really the answer - many large holders haven't sold a single OHM. Not to mention, without a mechanism to stop gaming, this cannot achieve what you say it will.

            In socialism the rich stay rich, the poor stay poor…. Im just saying. My comment was a bit obnoxious so im editing this with purpose so not to sound condescending. Im not trying to make this a rich or poor argument, trying to debate on that premise balkanizes the message. Im trying to assist in solving a problem that if you do the math using the community tools you will see for yourself this proposal does not solve. This proposal only extends the runway…. Until we come to this problem again and we will because the Sohm on the broader end of the reward spectrum hyperinflates unless curved. Not even this proposal stops this. Now i mentioned earlier that the framework would essentially at some point naturally curve the broader end of the sohm spectrum - but thats your real socialism because the new ohmies growth is slowed dramatically by the framework. As the inflation rate of supply increases by adoption and rewards distribution, the broader end Sohm accumulation absorbs roughly 71 percent of the newly minted reward supply due to quantity advantage (not a crime, not a problem - unless your trying to solve inflation). And the real comparison isnt socialism its more like plutocracy at that point. I apologize if my initial comment lost the point and sounded like a jab

            Mark11

                dns

                It's an emotional time for all Ohmies - I think the solution is integrations and use cases - no amount of tinkering fixes it without that - this proposal buys us some time to get that done

                  Mark11 many large holders haven't sold a single OHM

                  Well, many large holders have sold large amounts of OHM, shall we put together the math to compare?

                  Adjusting down the rate doesn't really do anything - unless acquisition/usage becomes exponential to match the rate.

                  Otherwise, the top heavy still get proportionally much more than the other 95% and the selling pressure doesn't change. The quantity they are selling might go down, but proportionally it will remain the same.

                  Revenue will remain linear in growth while supply (and subsequent selling) remains exponential.

                  This is fundamentally a lack of utility problem of OHM leading to an acquisition problem compounded by a disproportionate distribution.

                  This proposal doesn't actually solve the inflation issue, perhaps slows it a bit, and doesn't address in any detail the lack of utility and acquisition side of the problem.

                  Edit: @Mark11

                  Just saw your response above and seems we are in agreement regarding increasing utility (attractiveness) of OHM beyond meme APY spread throughout crypto twatter.

                  • dns likes this.

                    @shadow Proposals to further lower rates should be seriously considered before being put to a vote or implemented since they could have undesired effects on Ohm price action.

                    Consider that at the moment, Ohm give 7.4% over a 5 day period, and it is unlikely many traders, even with leverage, could consistently outperform 7% every week, even during a bull market, due to rotation, bumpiness around resistence, fud storms, etc.

                    However, if we reduce the reward rate to .2975 every 8 hours, that's only 4.2% per 5 days. And suddenly many more traders can outperform that rate.

                    And that would mean, everytime the market reaches a local bottom, even more people would sell ohm, to long the popular coin of the day, whether its Gme, Doge, Axs, Luna, Ada, or NFTs.

                    This may actually lead to more price volatility in Ohm.

                    This proposal should be shelved for at least 6 months. We have 300 days of runway still ready to pay out, there is no rush.

                    Furthermore, once the bull market double peaks this winter, everyone is going to sell their btc, eth, and meme coins and flood into dividend plays like Ohm.

                    That will easily extend the runway significantly, but only if Ohm continues to be much more attractive than any other option…

                    Although I 100% support the proposal, and the logic behind it, I will probably vote NO the reason being as follows:

                    Question for policy team members:

                    Do any of you have wife/husband and kids, or longterm relationship? 

                    Can those of you who have, remember how many times you were right in an argument but you accepted compromise for the sake of “peace in the house”?

                    Well this is that kind of situation here and now.  

                    You are 100% right, and you know that compromise of 20 days on top of 3 weeks is actually safe protocol wise. So whats stopping you from doing the right thing for the “peace in the house”?

                    • protocol is healthy, and there is almost no short term risk
                    • imho framework reduction should be integrated in protocol and automatic - no vote on further reductions it just happens and everyone is aware of it (but we can vote to postpone any upcoming reduction if situation would require it)
                    • any potential partnership will take at least a month to finalize
                    • any potential partner will get a clear picture how reduction would work via framework

                      Graz

                      I like this idea! The total crypto market cap's unit of account is in USD though? How do you propose that we find a metric to potentially implement something like this?

                        BTTJ

                        I think there's a happy medium to be found. We can't rely on the meme-like APY being the main driver for the protocol because that's not sustainable in any scenario.

                        I think we'd like to move away from this exact thought process. We want to better educate new users on what Olympus is trying to achieve. How do we do that?

                        More educational initiatives- videos, community calls, better communications across social platforms, a revised landing page.

                        These things need to be prioritised in order to attract Ohmies that better align with OHM's goal of becoming a reserve currency for the Defi space, not just for unsustainable short term gains….

                          dns

                          The proposal is the first step in addressing inflation. Without it, there is no OHM over a long term horizon. You're sacrificing future rewards today if this proposal fails to pass….

                            shadow

                            New people still coming in. Drastic changes now will just create a mass exodus.

                              This is a desperately needed improvement. Right now there's too much uncertainty which introduces a lot of volatility. We just had a nice volatility phase, seems ideal to put this proposal into action. It will greatly help to onboard new partner protocols as we start to have a semblance of a mature roadmap for where Olympus is to go. This is the main value accrual for Olympus, it's more important than RFV in my opinion. Without the future use case there's no point into bonding into Ohm once APY settles down.

                              I would however put doubts on the reward reduction over a period of two weeks. I'd prefer to see us do more gradual moves than these sudden changes. But obviously changing levers over a shorter periods of time may help to see short term impacts more easily.

                              Also I'm very happy to see the addendum that Option 1 must have >50% to protect against splitting votes.

                              shadow

                              I just joined this amazing community a couple days ago with my friends and we were very attracted by the advertised APY. But I do have to say, seeing the proposed framework was a bit surprising but somewhat reasonable.

                              I would recommend incorporating a reward percentage range based on the number of OHM stacked within this framework. The more OHM staked the lower the APY one gets, hoping that it would help decrease the impact of whale power over the supply and price. That said, I strongly believe in this project and will be in it for the long run.

                                  dns

                                  This is what needs to happen. Hope the dev team considers this approach based on proper calculations and puts it forward.

                                    Bigbabol

                                    I honestly believe that a week for discussions (forum proposal + Snapshot vote) and a 2 week reduction period is enough for a 15% reward rate change. I'm sure some people don't understand because they're thinking in terms of the APY and the change seems big, but hopefully the explanations added will remedy that.

                                    Moh828

                                    This serves to punish holders, which I don't see why any project should do. Not to mention that it can be circumvented by using multiple wallets.

                                          A better approach: I think the reward rate should programmatically decrease by a fixed (very, very small) amount each day. For example, a formula that takes the previous day's reward rate and decreases it by .0000035. That gets the effective APY to some reasonable milestones within reasonable timeframes, and reduces the slope of the supply growth curve in a nice, easy, predictable way. At the same time, it would eliminate any opportunity to play "arbitrage" games around threshold levels such as those set in the OIP-18 currently under consideration. The actual rate for daily decrease is something that would be debated in advance, and my further suggestion is that it should probably be a small range, rather than a single value, with the Policy team given prior approval to modify it within that band as needed, no further voting required (although pre-change discussion and notification might be nice).

                                          There's an option missing from the poll/voting which is:

                                          (3) Adopt framework and dont reduce reward rate to 0.2975%

                                          This is because I think that reducing the reward rate to 0.2975% introduces a sudden change in APY, dropping from middle 10.000% to 20.000% (17.827) to middle 1.000% to 10.000% (7814)

                                          Would favor and vote for an option where the APY would drop gradually from current values to new framework values.

                                          My vote would be against. This proposal seems very rushed and meant to protect the top tier. In order for this project to work at becoming a truly decentralized treasury, you are going to need a lot more than just 10K Ohmies. I think this is going to stifle new growth.