juggz

  • Jun 11, 2021
  • Joined Apr 27, 2021
  • DAI bonds were switched from calculating the debt ratio with total supply, to calculating with circulating supply, yesterday in response to a rapid exponential increase in capacity. The rate of this exponentiation with underestimated, requiring faster action. The feedback loop creating this is: fill bonds to capacity => total supply increases => capacity increases => fill bonds to capacity => total supply increases...

    Now that it uses circulating supply, the parameters will be far more consistent and controllable. Bond capacity will rise along with circ, which is in large part tied to the reward rate. I propose recalibrating policy to the following parameters:

    • BCV of 300. This targets an inflow of roughly $660k per week. Over the course of the next 3 months, the treasury would take in between $10-15m given price stays at $1200. This provides a solid achievable baseline that allows for price growth given demand while still capitalizing heavily on the existing range.
    • Minimum Premium of 1000. The minimum premium can be used to defend a range. Currently, that range is forming above 1100. By setting the minimum premium to 1000, dai bonds will not be attractive until above 1100 (1000 + 10%). This means protocol sell pressure effectively drops out any time price goes below, making it easier for the market to come back up.
    • Vesting term of 33110. Same old here, though open to any countering thoughts on what this should be.
    • Max payout of 0.05%. A bonder can only buy roughly 65 OHM from a bond.

    I am quite excited for our contracts to start looking at circulating supply instead of total. The rate at which they would dislocate (total would grow faster than circ) was severely underestimated at initial deployment, and it has required constant management that has proved annoying for everyone involved. Using circ, setting parameters will be much more of a set and forget process.

    For: Use these
    Against: Provide your own in the comments or another proposal!