SateeshK

  • Dec 17, 2021
  • Joined Aug 13, 2021
  • Fully support the reward rate reduction as outlined here.

    However I have a couple questions for @shadow @abipup and whoever else wants to chime in regarding some comments surrounding our pivot away from bond revenues: In the long-term, I agree that it's wise to reduce bond capacities, pivoting to a greater focus on other revenue sources, which will help maintain health of the protocol. However, I'm concerned that it's too soon to be reducing bond capacities in a meaningful way given (1) non-bond treasury inflows are peanuts compared to what the treasury makes w/ bonds (Source: Dune Dashboard, Revenue (with LP market Value) - if this statement is inaccurate, then I think it speaks to the broader data issue we've seen recently where Dune Dashboard and Olympus Front Page metrics aren't remotely accurate) and (2) OHM market cap is reflexive - when Treasury inflows increase -> market cap increases -> higher market cap means more bond inflows (assuming no BCV changes) -> Treasury inflows increase further -> and the cycle continues. I have seen people reason that bond inflows are lower given (i) OHM's declining market cap and (ii) cyclicality of bond inflows resulting from broader market volatility, however I disagree with both statements given OHM's market cap (and ETH's) hovered around ATHs in the mid-to-late November period while bond inflows hovered around a 7-day MA of six to eight million $vs.$ 8MM+ for the entire month of October while OHM market cap was much lower. Have also seen people say that the sell pressure from bonds outweighs the positive benefits of increased treasury inflows. Can anyone provide data to back this up? OHM hit ATH's in market cap (and saw more price stability) right around the time bond inflows were near ATHs, so not entirely convinced that statement is true.

    In summary, I'm concerned that it's turned into an echo chamber, with many parroting that we need to reduce bond capacities NOW (some have already been reduced recently IIRC), rather than wait until our non-bond revenues are actually meaningful. However the unfortunate fact is that non-bond revenue is tiny today and a further reduction in bond revenues will lead to even lower gross revenues, which, in my view brings into question OHM's valuation.

    I want to make clear - this isn't FUD. I've voiced similar concerns in the past and rather than spark reasonable discussion, it gets met with a lot of anger. Genuinely interested in discussing / hearing answers to my questions as I think it's important (and if it's not, then please describe why it isn't) and would love to hear why I'm wrong as I've been an OHM investor since the first week of April and have been in full support of all the policy and protocol moves, until recently.

    • Love it. And similar to @Brian33 comment, I don't think CVX bonds make this repetitive. Excited to see both come to fruition.

    • Fully support. The sooner we start acquiring CVX, the better given multiple other protocols have begun discussions to do the same. Votium payouts have been mooning and this is only expected to continue given the efficiency of protocol's bribing vs. LM incentives with the additional tailwind of Curve v2 which will add a theoretically unlimited amount of additional pools to bribe.

    • Pretty surprised by all of the push back on this, specifically related to us "burning" our relationship with Sushi. We've never had a formal partnership with them and guest speaking on a couple Discord calls is not that, so I'm having trouble following why we owe them anything (and I don't mean that negatively, I'm a fan of Sushi). IMO, this is a rational next step. We make up a significant amount of Sushi's TVL and daily volume and have lost out on millions of dollars $of fees under the current structure. I'd argue this, if executed well, is significantly more value accretive than Olympus Pro which has gotten a ton of praise in the last month or two. While OLP has earned 300-400k in fees in a little over a month, we would be earning multiples of that amount per day just off trading fees. And this doesn't take into account a built-in leverage option whereby the protocol takes a portion of every rebase (and I'm sure I'm missing several other incremental revenue opps that I'm too smol brain to come up with).$

      On a more critical note, I do echo many others' sentiment of wanting to learn more about the team leading this project. Is the Ohmieswap team comprised of longtime DAO contributors? If not, do any DAO members have relationships with the Ohmieswap team? While it seems like many in the DAO were aware this was in the works and general consensus from known DAO contributors seems to be in support, it would be nice to get more background.

    • Can someone just explain this part of the proposal: "Keeping a small stock of BCT will make vesting premiums more profitable." What does this mean / how so?

    • My favorite decentralized stable - FOR✍

    • While I was initially against the proposal, per my earlier comment, I've since changed my mind and am now for #1. The flip-flop is primarily driven by two things which I did not completely appreciate:

      1) as APY comes down, bonding becomes much more attractive given a lower required rate of return for bonders (key concept here is that it's only attractive to bond when 5-day bonding APY is larger than 5-day APY from simply holding sOHM); thus, the protocol can continue to generate strong revenues while also minting less OHM and

      2) as we continue to methodically reduce APY, partnerships/integrations with other protocols become significantly easier. Why? As it stands today, protocols that do not allow for collateralization and borrowing against sOHM (i.e. Fuse), must incentivize sOHM holders some other way. But competing with 15-20k% APY is far too costly, so partnerships at this point in time make no sense. However, when APY is reduced to more reasonable levels, incentivizing sOHM holders becomes significantly more cost effective given a lower required rate of return. Further, and this was what flipped the switch for me, imagine the scenario where use cases for OHM (not sOHM) are created allowing you to generate similar yield as you would if you staked your OHM (i.e. sOHM). This helps the protocol avoid exponential increases in supply, in turn bolstering RFV and lengthening runway, which are to key fundamentals that many of us obsess over.

      Big-brains please chime in if anything I've typed above is wrong, but I wanted to put this out there as I was unclear on it and I'm sure others were/are as well. Also for the people talking about the negative impacts to newer investors - the policy team is thinking about the long-term. While we don't know what the short-term effects to price may be, it's a higher probability than not that this proposal will improve the projects fundamentals, improving OHM's value over a longer time horizon. The project is just months old - with goals as ambitious as OHM's we must be thinking over longer term time horizons and not concern ourselves with price fluctuations over days, weeks, or even months.

    • Concur with many others' thoughts. I would like to hear more about what problem we are solving here. How does this proposal make integrations easier? Why not ramp the reward rate down over some longer period than 2-wks? Feels a bit rushed and I'm still not completely clear on the rationale however with more information, I could change my mind - just haven't seen it to this point.

      Separately, I agree that this proposal will leave a sour taste in many of our new ohmies' mouths. I think someone mentioned that 45% of OHM holders have joined in the last month. A growing and diversified base of OHM holders is extremely beneficial and this seems to move us in the opposite direction. This ties to many peoples' concerns around the impact of whales and, IMO, seems to benefit the day-1's and whales the most. With that said, I'm a fan of the idea of scaled rewards based on length of time staked, similar to Alchemist's Aludel subscription. Not only does it significantly incentivize (3,3), it also gives ohmies new to the protocol who are in the red given recent price movements, a better chance to recover, and provides for a pseudo-locking mechanism for those who were supporters of the concept of locked OHM. Scaled rewards is clearly another beast of its own, and would require significant manpower to devise different tiers, but is an avenue worth exploring.