OIP-18: Reward rate framework and reduction
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I agree with dns here. I’d rather go this way. Incentive small wallets, and substantially lower APY for the largest wallets, maybe couple with a warm up period. I’d like to see a stable and higher market value, too. I think all of us here want to do the best thing for each other and the protocol.
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EDIT: I changed my opinion, see https://forum.olympusdao.finance/d/77-oip-18-reward-rate-framework-and-reduction/137
==== ORIGINAL POST ===
For those not following on Discord, there's been some very lively discussion and disagreement on this proposal.
On one side, we have the initial OHM holders (~ 4000 people or so ) which are "thinking about the protocol", and want a more sustainable runaway. This group will not feel any sort of pain due to this change, as they've been in the protocol for a while now.
On the other side, we have the other 50% of users which came into the protocol in the last month. These users have been attracted through MEMEs, Twitter Threads and various other community building methods though a (stated or implied) claim that the 5-6 digit APY will continue and that we can sustain these levels for 300+ days.
This second group is rightfully disappointed, as the marketing was deceiving. It's this second group that's supposed to now "protect the protocol" and "think of the future" and are being accused of being selfish individuals that are looking only to cash out and protect their rewards.
This can't be further from the truth. While yes, of course, there is a monetary incentive (that's why the majority is in crypto), what one might be missing is the fact that initial members of the OHM community (the initial 50%) ALREADY had time to express their inner and innate selfishness! They were here at 4$ OHM and 100k% APY. They had plenty of time to collect quite the sum, yet nobody was calling them selfish at that point!. It's only now, when the remaining 50% wants a cut based on deceptive marketing claims that "they are the selfish ones not thinking about the protocol".
A lot of the NEW OHMies also agree that this proposal is too fast. Someone on discord suggested to implement this change, but not immediately. While it's true that we should be doing the necessary for the longevity of the protocol it's also true that OPTICS and community sentiment matters just as much as "the protocol". Afterall, it's humans that make it all work.
So, my proposal would be to implement this change over the next 45 or so days (we can decide via pool). During these 45 days, display a banner that says APY WILL be going down due to this OIP. This way, any new OHMie coming in knows exactly what to expect and the existing new OHMies still have breathing room and can be satisfied they haven't been deceived via BAD marketing.
This "us vs them" mentality is way off base and can't be further from the truth. It seems easy for you to ignore the blood, sweat, tears, and risk that early people took (including people like me who bought in at 1000 dollars). Frankly I'm insulted by this sentiment.
We can discuss if clearer marketing is needed, but that's outside the scope of this proposal.
To comment specifically on your 45 days proposal: this change is already happening over a minimum of 3 weeks (1 week forum, 5 days snapshot, 2 weeks linear decay implementation to new reward rate). Why is that not enough?
I will vote in favor of the reduction, as it's best for the long term, but would like to see it implemented over 45 days or so to be fair(er) to new ohmies. I hope the final proposal put to vote will include a longer (than two weeks) implementation period.
While it should be clear to every ohmie that OHM is actively managed by human governance and thus subject to frequent changes, I agree with OP that the change should be slower, and more predictable. However the "us vs them" rhetorics (e.g. new vs old ohmies) is not helpful and I would love everyone to refrain from it. Every ohmie should be in the same boat.
Very interesting and I like the idea, I think the challenge here would be finding the balance so that these whales don't just split their OHM amounts to different wallets to keep maximum gains. But I do agree with this concept for sure
I understand the APY:RFV maintenance. Backing is part of the goal.
But please ser, gigabrain me on this framework. Aren't there moving variables to consider across such growth?
I purchased OHM in July, so I am fairly new. I totally understand the arguments. My vote is for longevity, and therefore whatever it takes for (3,3) in the long-term. Appreciate all the work that has been put into this, BTW.
I am personally in favor of the proposal (as I was with the last reduction). It provides clarity, structure, and vision to how the protocol can survive long term. Everyone knows that rewards at this level cannot last forever. This proposal lays out how it can be managed going forward both internally as well as to new participants and those we want to partner with. That said, delivery and human nature are at play here which is why this reduction is more heated than the last, noting that the last one was more urgent. While it has been mentioned in Discord that the policy team has been talking/working on this for months, it hasn't been on the minds of others (300 days of runway). Therefore it has come as a shock to many (a large number currently underwater). 9 additional days to double is nothing in the long run but an eternity to people who recently purchased and are at a loss. I want to thank the Policy Team for their work as a lot of time goes into what they do. That said, policy is at the core of this experiment and any change to it needs time and discussion. Not all of us live in Discord everyday so short timelines amp up tempers and stress people out. Would suggest next time make an announcement at least a week ahead that a policy proposal regarding "x" is coming. This is also why I am in favor of the loose framework. (3,3)
As someone who’s been with OHM since the start, I’m going to vote against this proposal.
Thank you.
Supply is currently increasing exponentially and revenues increase linearly.
This is not a sustainable future for the protocol. Let's adjust now.
The reward rate decrease helps lower 5D ROI & makes bonding attractive to support growing inflow.
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- How many day from implementing 300 day runway of 16K?
- In 2 months I see another proposal to decade the APY even more as the engineers will miscalculate again…
Anyway information about this proposal should go to main stacking website, not all Ohmies are living on Discord. There will be many OHMIES not even knowing there is some proposal, nor voting.
After doing some more thinking, and taking in consideration the ~ 3 weeks we're going to have of more-or-less 17k% APY, I am changing my vote to option 1. I still think that it's bad optics not telling new people sooner (even now, why are we not putting a link to this proposal near the APYs?), but I think long-term this is a good decision, even though I don't like the method it's been communicated.
See also this tweet thread which does a good job explaining the benefits.
Something that hasn't been touched on yet:
- This proposal will increase price, bond incentive and revenue. The argument that new OHMies are in the red because of a price drop and need time @ high rewards is asinine, this is because the longer we keep this high compounding APY with linear or falling bond revenue, the lower the price will go.
- I was one of the people that bought above $1100, at the depth of the lows, the APY was cut, allowing bonds to be better incentivized and kick starting the revenue engine. We are now redlining at this APY, and need to shift to second gear, which is:
Reducing APY -> Making Bond discounts more attractive + lower supply growth -> increasing revenue (& RFV per OHM) + increasing price
You bought into a stable coin experiment with high risk and high reward, the protocol shouldn't give a **** what proportion of people are in the green, the only thing it should concern itself with is balancing price, bond revenue and supply in order to grow to billions of OHM in supply at >= $1 RFV and keep this fairly execution risk mitigated engine that we have created so far humming along for the long term.
I think new OHM holders who have i boarded in the past few weeks May find this very unattractive. With the price drops a lot of them are in the red and this would further prolong the process for their good outcomes.
Additionally I am not clear how does this reduce price volatility.
Lastly if are run rate and revenue is not changing why are we looking to change the rate today and not instead in a gradual few month process so anyone new who joins today knows this is on the cards and can accordingly decide their engagement instead of doing it within the next two weeks!
Adopt framework and Reduce reward rate should be 2 separate proposals.
If not separated then more voting options must be provided. The options currently presented are not comprehensive and force a choice from what appears to be a biased answer set.
At minimum, a 4th choice to implement framework, but do not change rewards should be available.
But also should be options to indicate acceptance but only if implementation of framework and/or reward reduction occurs on a longer timeline.
This is excellent, and point 7 especially there has been marketing done around 10k APY very very recently. False promises abound and people will feel sour. You might also press sellers into a short 2 week window prior to APY dropping.
What is going to happen without new funds or trading fees.? I started buying two weeks ago and am still under water but was ok with that as I was looking long term. I was going to dollar cost average in alot more funds but I'm going to reallocate those funds into one of the many other opportunities out there until this gets straightened out. This change makes the near term outlook on this project look alot more riskier than before since this incentive for new funds to come in will be greatly diminished which reduces the long term survivability of the project.