niko_themiddleway

  • Feb 10, 2022
  • Joined Dec 16, 2021
  • In OIP-63: Reward rate adjustment

    I’ve been looking forward to the OIP-18 scheduled reduction for a while. My ideal way to transition would be to gradually reduce APY from here as a function of supply, such that we cross the 1000% mark exactly as we hit 10 million circulation. That might mean a series of smaller drops or perhaps a smoothed out function. We have 3 million supply to go, so maybe 6 drops of ~1000% every 500k supply, for example, with each drop spread over 3, 15 or 30 rebases.

    That could provide the smooth transition that seems most advantageous.

    Also of concern right now is the V2 migration. There’s a lot of confusion at the moment as the UI on the staking site is all over the place and token supply is split across V1 and V2. I would suggest we let those issues settle before starting to adjust the rates as well. Clarity is important for such a large change.

    • In OIP-63: Reward rate adjustment

      I wasn't in favor of timing or speed at which last reward reduction was implemented. BUT, I did see how insanely helpful it was in setting up major price gains through Sept and Oct. Those are all wiped away now, but seems that's largely related to sell pressure from big holders gaining tons of OHM every rebase.

      So, while I wish we could keep rewards higher for longer to grow my own bag, I understand the necessity of this reduction. Reduced volatility will inspire investors across all these new chains and lay a foundation for what should be a massive growth period. Plus there are a plethora of partnerships to consider now.

      Super high APY has been a seeding period and I'm grateful to have been a part last 8 months. Wish my bag was bigger but we're still very early (I believe).

    • In OIP-63: Reward rate adjustment

      domPablo runway is only one part of why this is good. This issuance reduction will allow for greatet protocol revenue, greater protocol revenue leads to more value backing per token. And with this we can also increase our focus on bonds, whether that be on LPs or on reserve assets. Also, this will help reduce selling pressure on the token since we will be distributing way less. Just 3,3 fren 🙂 don't worry about "competition". Competition won't be won with high APYs, that is not the name of the game here. That's like checkers.. we're playing chess 😉 <3

        • In OIP-63: Reward rate adjustment

          How does this coincide with the planned reduction at 10m supply? Would we spend the next 4 weeks lowering to 1k, only to have another vote and drop immediately after (assuming 10m in mid/late Jan)? Or is this that drop, being executed now and then we maintain at the 1k mark through the supply milestone?

          • In OIP-63: Reward rate adjustment

            Summary

            Adjust reward rate to the minimum of the current range according to OIP-18. That would be a 0.1587% reward rate, which translates to around 1,000% APY. The adjustment would be spaced out across 4 weeks with the reward rate adjusting each epoch.

            Motivation

            Over the last year, Olympus has seen enormous success. The protocol has grown in strength financially (via its robust Treasury), technologically (through the introduction of innovations such as bonds and Olympus Pro) and influence. We have been in the current supply range as per OIP-18 (1m - 10m total supply) for around 4 months, and have not changed the reward rate since that proposal passed. It is preferable to continuously match the growth of the protocol with the growth of supply through the reward rate and not have the discrepancy shown through the price as that causes not only volatility on the market, but in our revenues as well.

            Currently, we have to collect >$2m per day in RFV via bond sales just to maintain the runway. Adjusting the reward rate will allow us more flexibility with our bond capacity, as opposed to devoting so much revenue to RFV.

            Also, the DAO is constantly looking for and building diversified income streams, such as LP fees, Olympus Pro, Incubator, yield farming with our Treasury and other activities. A lower reward rate will make it easier for Olympus to maintain its runway (with non-bond revenue).

            Proposal

            Adjust reward rate to the minimum of the current range according to OIP-18. That would be a 0.1587% reward rate, which translates to around 1,000% APY. The adjustment would be spaced out across 4 weeks with the reward rate adjusting each epoch.

            This adjustment would bump us up to a runway of 700 days and give us breathing room to continue growing Olympus in 2022 in a sustainable manner.

            For additional context, be sure to read the previous reward rate proposals and their discussions:
            https://forum.olympusdao.finance/d/77-oip-18-reward-rate-framework-and-reduction

            https://forum.olympusdao.finance/d/37-oip-11-reducing-reward-rate

            Vote

            For: Adjust reward rate to 0.1587% of total supply (from the current 0.2975%)

            Against: Do nothing