‘Buyback and Stake it’ idea/suggestion
How is it going to work:
This dynamic mechanism working 24/7 will use its buying power to buy SOV from the market. The lower the SOV price is, the higher the buying power of the mechanism. Stakers will get % less Revenue from the platform fees according to the buying power. Then the mechanism will buy and stake the SOV for 5+ years (with stake increased period). After that, all liquid SOV and revenue rewards will be distributed to SOV Stakers. It is expected that the more SOV the mechanism is buying from the market, the bigger the stack is going to be, thus more significant rewards for Stakers.
What will Sovryn gain?
· A mechanism that helps to lower active circulation
· Staking SOV for a very long time, maybe forever and creating a large SOV stack where SOV Pool will share the rewards with stakers.
· A continuous buying SOV pressure that will gain more considerable power when SOV price is in the lower range areas and inevitably staking more SOV
· This mechanism can go on and on forever without actually releasing the staked SOV in the market, which means that stakers who stake for a long time and do not unstack their SOV will have increased liquid SOV and increased rewards in the future.
· Encourage more people to keep staking their SOV and increase their stacking duration.
Sounds good. What are the cons?
· Stakers will have reduced revenue/fee shares in the beginning as the pool will start filling with SOV. Remember, however, the lower the SOV price, the faster to fill the pool.
Suggestions for 10 Buying Power ranks depending that will depend on the price of SOV
|Rank||SOV Price||Buying Power %|
How is it going to work?
It’s pretty straightforward,
- For every staking interval, there will be a snapshot, addresses that were part of the snapshot will get a ‘’Pool Power’’ , which will indicate their share from the SOV staking pool and its fees/revenues.
- The more SOV and Duration in your staking position, the bigger the Pool Power, which keeps getting bigger after every snapshot
- When you stop staking your SOV tokens, you lose ALL your Pool Power. So keep staking to benefit from the enormous pool that the mechanism will create!
Some more details
- The SOV stack will never use voting Power from the pool in any SIP voting .
- Maximum Capacity of SOV Pool: 50,000,000 SOV . The mechanism will automatically remove when the pool reaches its maximum capacity.
- SOV Pool will be untouchable . The only action that will happen with it is always to increase its maximum duration .
- At some point, the SOV Pool is expected not to generate liquid SOV to stakers. In that case , the mechanism will pay the same SOV value that someone was supposed to get from the Pool in XUSD or RBTC .
- The Pool will be visible to anyone can be a live tracker that will show the stats in the staking section and the Pool Power of the staker.
What drives me to create such SIP?
I am not a big fan of what is happening with circulation supply and the flooding of coins. I am sure some of you will say the price is not important. I partially agree, I staked a big part of my SOV for a long time, so I have to live with it. I staked my coins because I believed in what Sovryn wanted to build. However, like many of you, I am also an investor who bought SOV multiple times, from Genesis price to ATH. Yes, nobody guarantees someone that you will have your investment back when you invest. So I agree, it’s a decision that, as an individual, I take responsibility for and stand up for it.
However, I do not feel that looking into the problem and doing nothing will help. I might be wrong, and people are happy with what is going on, so this can be an easy no for voting. But I do have the feeling that people want to see something changing. Yes, it is important to see development on the platform and making deals and new products and and and. So yes, I am happy when I see the action happening. But I am not happy when there is no discussion about the elephant in the room that keeps getting bigger. As someone who loves Sovryn, I believe this discussion needs to happen, and ideas that will help massively reduce current circulation need to be deployed.
If many of the SOV stakers believe that something like the above will help Sovryn, I would be happy to see them supporting the idea / or proposing ideas on how to improve it. But, on the other hand, if many stakers do not like the idea above, it can not go through. Either way, I am sure people will understand the reasons for posting this proposal.