A Proposal to Help Pump Up the SOV Token

The collapse in the price of SOV in satoshis, is not a secret. Even when the SOV is not conceived to be “another sh-t-coin more”, but a governance tool, it seem that it has been losing appeal to the community. SOV as governance tool, hasn’t been useful enough.

In order to at least stabilize the value of SOV, somehow, I think something should be done. So I’ve been thinking in something to improve the demand and usefulness of our governance token.

Two things has called my attention:

1.- Very few people, few community members has proposed a SIP to be voted since the TGE. Proposing new ideas, or budgets is very difficult so far.

2.- On average, people are riding off their SOV, not buying more. On average the stakers, are selling their tokens instead of re-stake.

What can we do to improve this scenario?

The Dash Governance Model

There is a simple governance model that has been working since 2015, so it has had some stress test over the time. The Dash governance model has this interesting features:

i.- Every month, Dash releases a budget to let the community get involved in projects of promotion, improvement and adoption.

ii.- Anybody can make a budget proposal ON CHAIN by burning 5 Dash.

iii.- The masternodes (those who have stakes of Dash) are the one who vote on these proposals.

This model has certain parallels with the Bitocracy and some features can help the governance system to be stronger and more useful.

What if Sovryn adopts something as the following simple changes?

#1: The current requirement today to launch a proposal is to have a certain minimum voting power (either with own assets or delegates). But in addition to this condition, what if the possibility of launching a proposal to anyone who “burns” a certain fixed amount of SOV is enabled with it? (say 100 SOV for budget proposal / general SIPs and 200 of SOV for relevant changes in our protocol).

#2: Then the proposals can be voted by stakers and vesting contract owners. It is also known that the platform has a budget and a tokenomics to release SOV tokens. What if a bi-monthly (to say something) contest is launched to distribute some part of this budget in form of free SOV, along with proposals of adoption and improvement?

I know that this raw proposal has many downsides. E.g.: how can we assure that the budget granted will be used with the desired purpose? Well we have creative people and it is likely we could find a suitable adaptation to our model, like using staking positions as collateral (this is just one of many possibilities).

But what I want to discuss here is why this simple changes can improve our governance system and the value of our governance token.

In the first place, the mere fact of allowing to anyone to propose a change, a SIP, a budget proposal in Sovryn, with just the condition to pay a proposal-fee, may increase the attention towards our platform, making more useful the Bitocracy.

Also, by burning these fees, we reduce the “tokenomic-mass” of the SOV platform, increasing the value of the token in the long term. And long term thinking is what we’re focused on.

Also, in offering an incentive this will attract much more users into the adoption of the platform.

If this proposal is well received, it may imply some further work, as a SIP and some code to be developed for our smart contracts. But let’s take one step at the time.

Thank you reading me!

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+1
We definitely need more awareness of the power and importance of SOV. Like you so well said, demand is needed so it can continue to be useful, otherwise, it was just “another” launch with a big pump!

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Interesting ideas!

We should definitely look to learn from other projects.

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It makes sense to allow anyone to propose a SIP by burning SOV tokens and say by monthly reward top people who got their proposed SIP good recognition or passed the voting.

Instead of a fixed amount of SOV say like 100 or 200, should we make it something like a fixed percentage of the total supply? So as the tokens are burning and increasing in value overall it also makes it easier for new people to make proposals and ensures stability in token burn as in like people will not be put of by increasing value of 100 or 200 SOV?

My 2 cents will be to make sure there is an template/format for the SIPs and with it anything we should do to makes it easier to propose a SIP, which is in extension like making it easier to burn SOVs and is increasing SOVs overall value.

Important Questions and Points to ponder over.

If this is made into a SIP and passed it will make SOV deflationary :

  1. Are there any drawbacks for a deflationary governance token?

  2. This will make the value of the SOV reward received from SIP 024 very high, because as the tokens are burned the value increases.

  3. Will it require to replan the overall budget of the Sovryn platform by now taking into consideration that the token is deflationary?

  4. The number of tokens getting burned will be decreasing, if we modify this proposal to make sure a fixed percentage of token supply should be burned for proposing.

Some of the points that i have been thinking up to Increase the SOVs value.

  1. For an origins to get launched on sovryn they should also burn a set percentage of SOV tokens. (We should really scrutinize this point because, it will make it expensive or costly for new projects to show up in the ecosystem and at the same time increase the quality of the project coming over to the ecosystem or we can set the percentage of SOVs to be burned a low figure to incorporate best of both worlds.

  2. Allow people to have privileges like paying lower fee on the platform for those who have certain number of SOV staked.

I said number in the above point (2) because, it will make it easier for people to plan, it also applies against my first argument as like this, it is better to burn a set number of SOVs to do a proposal because it will be easier to plan. I will explain the points i took into consideration below:

  1. Burning will take the tokens out of circulation for ever while staking only temporarily.

  2. Percentage will make sure future participants can also afford to perform the action cheaply, while as a fixed number will make it harder for newer participants because it will increase the value of tokens overall.

The thing points that is against my argument above but at the same time makes sense are these:

A. It makes sense to make it expensive to perform a change in the platform as the platform matures, as in making the cost to make a change in the platform by burning afixed number of SOVs but it will make it will make it difficult for newer people to express their change.

B. The ability to have privileges in the platform should be easy for newer people than the ability to make a proposal because we are building an exchange. As in it makes sense to give fee reduction for those who stake a certain percentage of SOVs, but this will make it easier for anyone to have a fee reduction by staking and reduce the overall profitability of stakers but at the same time encouraging new users to the platform.

Overall i like the direction of where this would be going if it is passed.

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I think our biggest issue isn’t coming up with new ideas, but knowing where should time be prioritized?

Proposals and ideas are somewhat abundant, especially when we have the benefit of copying so much from other EVM chains. But I feel the team is spreading themselves too thin. We should be working to understand not just what ideas should we propose, but what ideas should be prioritized?

Priority of ideas over ideas themselves.

I am suggesting in the interim we create a basic group vote / ranking system via something like AirTable: Group Voting / Ranking Tool - Airtable Universe. Individuals can post current and random speculative ideas. Then between community and core team inputs into the table we can better gauge where to allocate resources.

Eventually, perhaps we can build out an on-chain voting model that mimics a more futarchy-like model. But in the interim this is basically a glorified Google Sheets.

This is a simple solution to solve a lot of issues:

  • Allows anyone to propose random ideas.
  • Grants more transparency into all the different ideas and road map the team has.
  • Gives insight as to what should be prioritized or reasoning why some things are not as priority.
  • Allows community to more effectively voice what features they want sooner.

@yago

5 Likes

The Dash model sounds interesting and I agree that there needs to be more interaction through the Bitocracy to solidify the governance platform in stakers minds so a monthly community budget vote could be a good idea.

At the moment the challange comes in incubating that idea into a SIP as I think from an individual stakers perspective its seems a daunting task as there is no way of really polling that idea, understanding what voting power may support it, whether its technically possible or whether its already in the roadmap / will be negated by something else the team have planned in the future.

Having some kind of informal measure of support through a ranking tool that @dseroy suggests could be a good starting point to get community feedback either to roll into a Dash type model or just generally give feedback to the team.

I dont understand the technicalities of the contracts and i think it needs to be kept simple, but perhaps it could be possible to have a way to allocate your voting weight to ideas you like every month. Personally I would have no objection to paying a transaction fee to vote or allocate a percentage of my vote accross a few ideas each month and if they went forward then contribute SOV to be burnt to get it to a formal SIP vote.

I know the development of Sovryn is in the early stages so would prefer the team to focus on executing the vision and carrying on the great work thats being done, I know they are resource pressed. On the other hand we have this great Bitocracy system in place and thousands of stakers and I dont think the most is being made of it yet.

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@dseroy would you like to set this up?

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it’s a solid idea, worth doing I think.

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I’m thinking something like this: Airtable - User View

What do you all think? The intent is to track new ideas and road-map progress while simultaneously allowing the community to upvote/downvote ideas. Additionally the core team can add things like whether these ideas are viable as well as the dev time.

In summary this enables easy way to:
Propose new ideas
Track current dev progress
Understand development road blocks and limitations
Allow community to vote on prospective ideas.

Please note, this is a sample. We can modify this pretty much any way we want. Could even embed it into the Sovryn website.

I’m pretty newb to the AirTable world, but it seems beyond powerful.

@yago @exiledsurfer @light @Ororo @magicmike @Whipper156

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I think its a great idea to test. To me, it would be a way to focus the voice of the community. I am sure the team internally has their own development prioritization list (or 100 of them) so I wouldn’t expect them to necessarily participate in this process, other than maybe committing to monitor the output on some regular basis (monthly, quarterly, etc.)

I am assuming that the document would not be editable by anyone, as it could turn into a real s#$t show if it’s a free-for-all, but I don’t know how the tool works.

May be a good idea to have a dedicated folder with a forum post for each entry to foster any discussion or debate about each item.

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As a point of order, I recommend starting a new thread about this so as not to hijack this thread. Let’s keep this thread focused on reviewing Julio’s specific proposal. Once you create a new thread, happy to respond and continue the conversation over there.

I would not be in favor of this. The amount of SOV proposed to burn is a very tiny amount, which will have basically no meaningful effect on the SOV price unless we have literally thousands of proposals. I don’t think we want thousands of proposals. And if you increase the burn amount, then this would just discourage people from making proposals imo. The value of proposals to the author would have to be at least greater than the value of SOV burnt. I don’t think we want to create this kind of incentive structure.

Bitocracy exists for this exact purpose. If people have an idea they think can improve the Sovryn platform and development, they can put forward a proposal and receive some funds (SOV or BTC or any other treasury asset) to fulfill their proposal. How does your suggestion here differ from the way things already work?

I don’t think we should allow ourselves to be distracted by short-term price movements. The token has only been on the open market since March, and came online right in the middle of a highly euphoric stage of the market. We need to keep in mind that we are a very early-stage project, pre product-market fit, in some ways still in development (hence the “Alpha” label on the dapp). I would encourage folks to stay focused on activities that support the long-term fundamental value of SOV: getting product-market fit and driving adoption and usage of the protocol.

Also, semantic note: can we please not use the word “pump” in relation to SOV or any other asset? There’s only one other word that comes to mind when I read that word and it’s “dump”, and I want zero association with pump and dumpers.

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The burned tokens are not supposed to have a great impact in the price. That’s not the aim of this. The purpose of enable new proposals in the Bitocracy by burning insignificant amounts of tokens is to increase the participation of users in the Bitocracy system. SOV has lost a lot of value because it hasn’t been used virtually in any Bitocracy activity, and with the current requirement is is very hard for users to participate and deploy an “on-chain” proposal.

Switch this perception with this point of view and all your other objections can be discarded.

“I don’t think we want to create this kind of incentive structure” … why?

To my mind the proposals should benefit Sovryn first and the proposal author second.

Ok thanks for clarifying that for me. I would question the underlying assumption that more proposals = increased SOV price. I don’t see a strong connection between the two. If you reframe the problem as “the barrier to submitting a Bitocracy proposal is too high” and that lowering the barrier to entry can help support community participation (which may or may not lead to a better SOV price long term) then this proposal can be seen as one potential solution. But again I would question the underlying assumption that we actually want to lower the barrier; there’s a tradeoff here between voter attention, system security, and ease of creating proposals.

As an alternative solution we could split off a sub-DAO with more limited permissions, like a limited budget as opposed to the whole Sovryn Treasury, no contract permissions, low quorum threshold, and something like a requirement that the proposer stake their SOV for at least x amount of time. This way community members could get funds for smaller projects without taking up the attention of the whole Bitocracy. (Aside: Why do I prefer this staking SOV to burning SOV? I think allowing the proposal author to get their SOV back after the staking period, but still imposing the opportunity cost of staking to prevent spam and other misaligned behavior, is a subtle but important psychological shift from burning the SOV, which feels more like a hard cost that the proposal author will want reimbursed somehow. This was my experience participating in a similar DAO in the past.)

I don’t think SOV has lost its value. If you look at the stats and number of users and txs this price is to be expected. After all organic growth is extremely slow, agree or not. Having a little experience with marketing I know that the organic growth is painfully slow. I believe Sovryn has decided not to list in any CEXs and this means people will have to find SOV in a sea of coins, and we all know how many coins are out there and how many are being added every day. As far as I have seen there’s been no major influencers talking about SOV except Pomp and Dan Held which are not really popular among all other crypto influencers. My personal opinion is that listing on a CEX is like a free tool for promoting the SOV token as millions of people will hear about the coin upon listing. I know most of members here do not like CEX but it is not all bad about them, think of them as a free promotion platform. There are lots of speculators but there are also lots of people who will read about the project and will join the community directly instead of going to CEXs. Some of those who read about the project would be influencers and they could also promote the project to their followers and communities. Having said that, in my opinion if we choose the path to organic growth we will be hovering around the low price range for a long while and expect the price growth for the next cycle, 2024-2025, but if we get listed in a major CEX we might see a price pump here and get lots of loyal hodlers for the next cycle.
BTW, I am happy with whatever path is taken by the team and the community, as I am in this for a long run and the price pump and dump is not my game.

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That’s precisely a zero-sum-game bias.

When a fishmonger sells a client a fish, who win “first”? The client receiving the fish or the fishmonger receiving the payment?

This is a truly free market festival, possible thanks to the blockchain technology, where incentives drives to a real win-win schemma, with no “first winners” but just winners.

In average, proposals which will not imply a real benefit to the Sovryn protocol won’t be voted (which is the very point of a decentralized governance), and the porposal fee will be lost; But also, nobody is going to pay for a proposal (or do the whole effort of promoting it) if there is no hope for a profit; nobody should work for free.

Here’s my full original comment this subthread is referring to:

And if you increase the burn amount, then this would just discourage people from making proposals imo. The value of proposals to the author would have to be at least greater than the value of SOV burnt. I don’t think we want to create this kind of incentive structure.

For the small burn amount you propose, I don’t think this is an issue because it’s a relatively small cost that Bitocracy could reimburse to proposal authors. Only if the burnt SOV amount is much larger (to have a significant deflationary effect on SOV supply, which earlier I mistakenly thought was one of the goals of the proposal but now understand that is not a goal) that the incentive issues I was referring to come into play. I think we’ve moved on past this point and don’t need to dwell on it any further.