• Proposal
  • OIP-18: Reward rate framework and reduction

I voted for, but would like to add one possible change (being optimistic here) Is there a way to change reward rate not only based on the total supply, but also based on the runway? Meaning, if runway increases a lot and gets to x days/x months, that the reward rate goes up again? I think finding that balance between runway and reward rate, is the name of the game, as I am sure there are a lot of "now" peeps that runway longer than say a year does not matter to... (3,3)

I'd like to make two points. First, that OHM is a very new project and while growth has been excellent for the time it's been around, the project is still far from mainstream even in the ETH community. I believe we need to incentivize this same level of exponential growth to continue for some time longer before the protocol will grow to its potential from its own momentum.

Second, on the topic of incentives for growth, an argument can be made that a supply reduction results in an increase of price, and so these two things are an equivalent trade in the consideration of this proposal. I don't believe this is true. In the crypto markets, even the largest projects have insane price volatility, and it's very difficult to reliably draw patterns between fundamentals and price action. Because of this, I believe investors will weigh protocol guaranteed returns much more than the concept of price appreciation, especially those new to OHM who do not fully understand how the protocol works. So even if in practice this is an equivalent trade, favoring price appreciation over APY will be harmful to growth.

    rgscg I think this is why long runway is so important and 17,000% apy vs 10,000% apy difference matters less

      Yannis This feels like giving up freedom for safety and it freaks me out because I see this will divide community. I agree with this, and it is how I feel about locked staking. The same system that the Aludel Crucible (Alchemist) has, solves all of these problems.

      But on the issue of selling rewards for DAI, ETH this is a bit self defeating as it is really just a tax on protocol owned liquidity, reducing market depth. This may work if OHM was listed on say Binance, where it could be sold into that liquidity (non-protocol owned) and is diluted over a larger market base.

      My main argument is that this is a major change for the protocol, has 40% voting against, and should be discussed over time so we can hash out all these arguments, such as the integration one (which isn't explained in detail in the proposal). The current proposal is happening too fast, which is why I'm voting against.

      At least in my mind, this doesn't jive with all the messaging, tweet storms, podcasts I've seen. We need to evolve the messaging first and then work out this long term plan.

        Yannis Fren, price has to stop somewhere what do you propose with this - we could just give 1,000,000% apy? In the end silly ppl are gonna dump on (3,3) no matter what - we don't have a good solution for that but the higher the apy the quicker the (-3,-3) scheme plays out, if we force them to wait a bit longer maybe they go chase some other investment.

        Longer runway with 10,000% apy is better for (3,3) imo.

        Mark11 Sure. So I'm not opposed to a decrease in APY. But this needs to be carefully balanced with the need for growth and the runway and so on. I think I am opposed to the framework. Rather, I think 1) we should not set future expectations rigidly at this point in time, and 2) these changes should be introduced carefully, and perhaps gradually, not with only a two week notice to those who may not follow governance closely.

          shadow looks like a proposal for the whales who are going to cash out. As a new ohmie, it all of a sudden doesn't look like a great investment for someone in my position with a small bag

            rgscg I 100% agree we need to discuss this a lot more before it can go to a snapshot vote

            Just wanted to make one more comment:

            _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.

            Said differently, in order to achieve the same revenue as in case A, we’d have to sell 40 OHM in case B._

            Although this might be true, most people invest a specific $ amount, So they invest for example $20,000 in Ohm, and that would mean treasury would still roughly make the same.

              shadow OK, i'm not sure this was clarified in the original unedited post

              shadow the first change will be a reward rate reduction to 0.2975%, from a current 0.35% of total supply

              THAT is reasonable

              am unsure what is was at first but the framework quotes a different rate "0.1587-0.3058" which is which? and for how long based upon number of stakers not withstanding-yes DAO is dynamic as it protocol...so many unknowns

              again would like to see what the "TIME" scale is on your graph?

              a practical example of what "0.2975"% is?

              The whole thesis around the olympus dao economy is socialism. We all trust each other (3,3) rise together and benefit at the end of the day. If we lower the apy to the levels being suggested this early, the economy turns into capitalism very quickly, shunting the poor and feeding the rich who cash out.

              By all means lower the apy, but do it to the level that the rich get taxed more than the poor

                PatchoEscobar
                As one more high level request, as mentioned in the policy channel, I think it could be worth putting a banner on the site indicating that this change might be coming to minimize anyone feeling blindsided. Noting that this could come with some FUD but a lot of the OGs and smart folks seem to think this change is a good idea (myself included, if it's moved further out timewise), and I think that it is repairable FUD if any. Just encourages community transparency.

                Irv86 people said the same thing when APY went from 100k to 15k. It worked out fine for everyone involved.

                  Irv86 That's almost word for word what they said back then too.

                  Larger bags are also earning more at the current rate that they could dump on you, so I don't understand the complaint this time around either.

                  If you hold, and the protocol remains healthy (i.e. the intent of this proposal), you'll come out ahead. Don't worry about people having more than you. I guarantee you'll have people saying the same thing about you when it comes time to decrease again.

                  I was down probably 50% when I voted yes for the last decrease. You either trust that you'll come out ahead or you don't, I guess.

                    I think the proposal does a good job of arguing for why we should consider implementing a framework for future reward rate reductions.

                    I do not think it provides clear justification for why a reward rate reduction should happen simultaneously to adopting a framework, or why a reward rate reduction is necessary now. It appears that most of the people voting 'AGAINST' are basing their position on a desire to preserve the current reward rate.

                    Why not decouple these two?

                    SpacemanJeff I hear you and I'm just expressing views from my current situation of 2ohm.