• Proposal

  • OIP-18: Reward rate framework and reduction

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.

                                shadow

                                Shadow, kindly explain how anyone is punished with my idea? Then kindly explain the difference in the "intent between your proposal and my idea? If my idea punishes, then so to does your proposal, correct? Both ideas cut rewards, except my idea cuts rewards where they hyperinflate. I dont like throwing rocks but the only excuse I continue to see with real fixes to inflation are "it will chase whales away, and we cant solve duplicate addresses". So if we are relying on whales to balance the protocol then this protocol is doomed faster because rewards for an OHMIE with say 100+ SOHM is far more problematic reward emission wise then an OHMIE with 10 SOHM. That is why I continue to say your proposal doesn't solve inflation, and the only responses I receive do not qualify as input for the purpose of this proposal.

                                Task - fix inflation
                                Mission - Long term viability of the OHM protocol
                                Purpose - Treasury for DEFI

                                That is how the decision making process begins (I am sure their are some ex-military in the community that smiled at that analogy. This proposal you submitted looks more like:

                                Task - Extend the runway for future expansion
                                Mission - cut emissions gradually on the steep end to allow high bond purchasers and longer vested OHMIES more growth of S-OHM long term
                                Purpose - Passive income

                                I am sorry OHMIE but that is exactly what I see with this proposal. I have been in this community for about 40 days and this is the first time I have been really vocal because even when I linitially looked at the calculators before investing I said "this isnt sustainable once I reach full maturity of my OHM but if a proposal to curve the inflationary end of the spectrum came out I would advocate for it. Well this proposal "was initially music to my ears, until I did the math and the research and recognized it doesn't fix inflation it simply stretches the runway. If you want to stretch the runway, write a proposal for that and lets have a vote, but its misleading to say we are fixing inflation when in fact we are not because you refuse to recognize in your proposal where the inflation is.

                                The framework is designed to actually solve the problem but it is imbalanced because the combination of bond purchases and S-OHM higher quantity holders will absorb roughly 71% of the minted supply emissions as the framework is aggressively addressing emissions. Your asking a new ohmie to hold and 3,3 meanwhile the S-OHM on the broader end continues to inflate away that ohmies value in his say "one ohm" so he is fighting a resistance battle against inflated supply and sell pressure in which that 1 ohm OHMIE doesnt win. And the OHMIE can't win because we slowed his initial growth trajectory.

                                I run a construction project management business for my primary occupation. I dabble in crypto because it is a protection from FIAT inflation. Crypto protects the value of my today money, tomorrow. When I hear some idiot politician talk about taxing the rich, I laugh because people in my position don't pay taxes, we stick it all into assets, rental properties etc; debt is not taxable, only the middle class and lower earners pay taxes - FACT because im a practitioner. Do I sound like a person that wants to punish anyone? Or do I sound like I want to solve a problem here? I've only said it a few dozen times this should not be balkanized into a rich vs poor argument.

                                I am passionate about OHM because it actually can work! It can achieve the mission and purpose of being a defi reserve currency and treasury. The LP pool ownership and the bonding aspect is absolutely GENIUS! That's why I support this protocol. Those that are trying to find a bond between TRADFI and DEFI needs to understand TRADFI will always want to kill DEFI their is no compromise. TRADFI sees DEFI as the enemy, and DEFI wants to shake hands and integrate. Their will be no integration, their will only be polar universes. Sure we can take the tools of TRADFI and inherit them into smart contracts, but TRADFI has no intent to be friendly to DEFI as long as their is an opportunity to kill it - inherit the DEFI tools into TRADFI banking instruments - CBDC, I'm just saying…. OHM is an asset for DEFI that can keep it alive and thriving when market liquidity dries up in bear markets. For that to happen you need MANY strong OHMIES not just a few with large bags. We need growth at all levels of the S-OHM spectrum and my suggestion accommodates that while at the same time slowing the emissions of S-OHM where it happens the most exponentially. All I am saying is pull up the calculators, do the math yourself, see if this proposal solves any problems it intends to solve. Vote on the proposal as its intent. Does this proposal fulfill an intent or does it fulfill an interest? Who's interest? Why? Educate yourselves on the matter using the community tools. I can take the harshest of criticism because I back up my arguments with easily verifiable facts available to everyone. DNS OUT!

                                    SpacemanJeff

                                    The logic that because something is bad elsewhere, the customer should deal with something disagreeable here, is not a good style, whether its in a business, a group, a dao.

                                    "Also worth noting that APY is never guaranteed in DeFi. In other projects, yields can be cut in half overnight with no notice just because a lot of money got dumped into the pool. Nothing about making the protocol healthier, just someone came in to scoop up more for themselves. Too bad."

                                    Longterm, that is a very poor strategy for maintaining a faithful customer base. Think instead of all the success Bezos had with Amazon precisely by sustaining a culture that does not compare with competitors that offer poor customer service and products, but instead focus on offering the best possible experience for customers.

                                    Also, let's not forget that for two months we've had NFT marketing based around creating APY cards that inspire FOMO.

                                    https://olympusdao.medium.com/introducing-ohmie-cards-limited-to-1000-e21dd8658adb

                                    @Sayinshallah even organized a 3, 3, themed mosaic depicting each of us earning more than 10k apy%. To those approaching Olympus dao from a position of financial desperation and need, this will most likely be interpreted as a misleading marketing tactic, and many will begin looking for scapegoats, a.k.a. the whales.

                                    Insofar as the protocol aims to bootstrap through collective cooperation, avoiding miscommunication and segregation are paramount.

                                      This needs much more discussion and consideration than it's being given. It seems very rush and sudden as if all the OG whales that make up the majority of the policy team have abruptly decided (again) that their bags have grown large enough that it's time (again) to focus on the price per Ohm so the rich can continue to get richer. Insanely high inflation was cool when those OGs had tiny stacks but now that they have massive fatty bags inflation is now suddenly a bad thing and needs to be addressed right now. I will agree that inflation is a problem but it's baked into to the protocol's design and it's what got literally all of us into this project in the first place. The bigger problem is the concentration of wealth (and voting power) that has been created by the compound interest inflation that Ohm's tokenomics is based on. And the real question is what: What exactly is the point of a "decentralized" reserve currency with the bulk of it's wealth and control concentrated in the hands of just a few?

                                      That's just the world we live in though, right? Those that get in early are always going to benefit the most and those that get in last are always going to benefit the least, if they even benefit at all. Most social constructs and organizations boil down to a pyramid scheme of some sort. Most of us got in thinking we were early enough to get in on the party to see our investment grow substantially and have get to a place high enough on the pyramid to be able to dump on poor schmucks that showed up to the party later than we did. Maybe we were early enough, maybe not. It's hard to tell when the goalposts keep getting moved. I do think some sort of framework would be helpful to give investors an idea of what to expect in the future. This will help newcomers in doing their due diligence. The proposed framework is far too vague and the graph has a time axis with no units. Surely we can come up with an exact formula or algorithm to determine the reward rate at any point in time based on whatever inputs needed to be used. That way moving forward we don't have bunch of people feeling like the ladder is being pulled up or kicked out from beneath them..

                                      Lastly, we can say this proposed change is up to the community all we want, but the truth is the top 3% or so can push anything they want through when it comes time for a snapshot. Oh well, it is what is and we shall see how this plays out…