Dseroy,
This was a fantastic reponse.
In my opinion, this is exactly what the community was looking to hear from someone in a postion of authority days ago when all the controversy started.
“I will reply to this one in more detail sometime today on this thread, so stay tuned!”
I look forward to hearing further details from you.
Gimp – Excellent proposal(s), appreciate you taking action! I have some further considerations and curious if it changes your views, if at all? I also added a lot of additional context for community members who aren’t aware of the full situation:
I’m a bit against making blanket token locks on Exchequer, Adoption or Development funds. This could hamstring us near and long term. Consider the implications of if (or when) we close a funding round, which may be happening near term. In that scenario, we would take currently unlocked tokens, sell them to our new investors, but require them to take on a relatively significant (4 year) lock-up. The fundraise would only be possible because we already have access to the unlocked tokens. If these tokens were locked, then we couldn’t perform a new round (or we would have to drastically limit it), thus potentially pinning ourselves in a corner unable to raise money. This in-turn makes us slow down growth or worst case makes us vulnerable to bankruptcy.
Basically, we can achieve the same effect of locking up tokens, but do it in down-stream future SIP’s. The primary difference is we wouldn’t have to pin ourselves in a corner today, but instead can vote on the actual individual proposals that move funds from Adoption, Exchequer, Development as they happen. As another example, (this is purely hypothetical) what if some developers agreed to build us our own Sovryn roll-up and would accept $SOV to do it, but we cannot afford this absolute game-changer development because we’ve locked ourselves out of the development tokens? That would be bad and ultimately I don’t think the risk of placating a few short term investors who may look at our tokenomics chart is worth potentially losing the ability to make big partnership or funding needs.
My recommendation is despite large amount of tokens being unlocked from the funds in Exchequer, Adoption or Development, these large buckets themselves as you mentioned are not actually being pushed into the circulating supply and thus are not the issue. Instead, it’s the way we spend those tokens downstream, like LP rewards, staking rewards, grants, etc. So, while locking these tokens up would give the perception of less inflation, we take significant risk of being unable to capitalize on unknown future opportunity. I personally am not comfortable locking ourselves out of these large pools of tokens and risking losing future opportunity to use them productively.
Instead, we need a way to more deeply analyze which $SOV from these broad buckets of Adoption, Development, Exchequer are actually making it onto the circulating market and then isolate/vote on those causes. Which is a segue to……
Right now we’re basically flying blind on the data side and we really don’t know with 100% certainty where $SOV tokens are being sold into the market from. It would be a bit irresponsible for us to make big Tokenomics changes without granular data analysis. At the moment, we can use block explorers and a service called Covalent to try and piece this together this information. This is some of what @sacro and @bananas_in_the_sky are working, but these tools are very limited and none of them allow us to make detailed, custom and in-depth data queries into the block-chain. So everyone saying ‘just cut this, or cut that, or change these token supply’ is really just guessing as to whether it will be impactful because the detailed data isn’t available to us. We’d be taking a blunt force weapon to something that requires more surgical precision. However, if we had The Graph, which indexes all chain data and makes it easily query-able, then we can make incredibly granular analysis on token flow. We can definitively say things like maybe LP’s in ETHs are selling their LM’s rewards, but SOV LP’s are not; so let’s adjust the rewards away from ETHs and to SOV LP’s. Or maybe we see stakers of less than 1 year are selling their SIP24 liquid rewards but the 3 years stakers are not so let’s more heavily benefit 3-year stakers. Or we can insinuate things like X group of wallets which appear to be from group A are selling, but Y group of wallets from group B are not selling. Really, anything else you can logically think through we can pull the data for an identify certain patterns. We can then make educated decisions from there. Isolating exactly where tokens are bleeding into the market I think is probably the way to go.
The problem is The Graph is not yet on RSK. It’s one of those pieces of tooling that are taken for granted on other EVM chains like Ethereum and is part of the reason why it’s been so hard to build certain things on RSK thus far. The Sovryn/RSK team has been working super hard to get The Graph and other tooling up and running, but it isn’t scheduled to be online until sometime in Q2 this year and up until now some of that is reliant on third parties to integrate. So, is it worth us making Tokenomics changes before we have this granular information? I’d say no. With that said, I don’t want to say this will be a magic pill either because I’ve never personally worked with The Graph and I’m not positive what insights we’ll be able to get. But generally speaking, my gut instinct as well as what I hear from others is that it should be a game-changer. The Graph would become like a public good that all of us in the community can query then analyze the data ourselves (if you have some SQL or data skills). We have a lot of talented community members who can pull out these insights once they have the tools.
My recommendation is we try to hold off on any extreme tokenomics changes until we can clearly say ‘Here’s what the data is showing us’
I am not a founder, nor original team member so I have no dog in this race. But requesting a 10 year lock-up feels excessive and as someone who personally has started and built a company outside of Sovryn, I’d consider it a slap in the face. Effectively, don’t bite the hand that feeds you. Many of the founders are pretty instrumental in moving this project forward and I am not comfortable with something so heavy handed that makes them feel under-appreciated. If they succeed I am fine with them becoming fabulously rich. However, an additional lock-up does seem reasonable because clearly the vision we want is something that will take far longer than the original 3 years that was proposed and proper skin in hte game is important. This is something that I think Yago, Armando, Ororo and others should comment on. I’d think something in the 4-8 year range makes sense and would fluctuate higher or lower depending on the vesting cliff.
It’s also worth mentioning that my stance on locking Founders tokens is different from locking Exchequer, Adoption and Development funds because the Founders tokens can actually be spent into the market and don’t have the ability to be used towards activities that can further Sovryn growth (fundraises, partnerships, grants, employment, etc). Additionally, the latter group typically would require SIP’s for major spends and in theory are only being spent if we think it will be beneficial to the protocol so we as a community have a lot more control over those.
Other Possible Recommendations:
In the interim, while we wait for Graph integration, I’d be open to suspending the SIP24 liquid staking rewards. This may give us a relatively short-term reprieve to the $SOV token price and give some upward momentum. This is something that Exchequer has broadly discussed previously and I think now is a good time for us to officially make it happen. With SIP-0024 see here: Sovryn Improvement Proposals | S O V R Y N $SOV stakers are given bi-weekly liquid $SOV of up to 29.75% APY. My speculation is this is causing a good amount of down-ward sell pressure on $SOV because we consistently see bi-weekly dips in price that correspond to when these rewards are given out.
If we make this change, the catch is we’ve already committed to pay the APY on these $SOV tokens to stakers and we cannot take that back. So some downward sell pressure would continue to persist. For example, let’s say we cancelled the staking rewards tomorrow. That would mean if you staked $SOV for 3 years today (or any time before today) then we would honor the $SOV staking rewards for the next 3 years or at whatever stake period you made and we would continue to pay out the bi-weekly liquid $SOV. But, if you stake tomorrow then you would not be eligible for the SIP24 staking rewards moving forward and would just get the Voting Power and Revenue Fee share.
In reality we can say ‘OK SIP24 is ending on April 20th’, and the impact of this could be two-fold. We could see an in-flux of $SOV buyers up to that April 20th date that are convicted in the long term vision start buying up cheap $SOV and max staking it knowing they may not have another opportunity to lock in the up to 30% APY on $SOV. We may also see $SOV holders finally make the plunge to becoming stakers thus removing even more circulating supply. Both of these would be very beneficial to the short term price.
On-top of that, if in the short term this increases the price of $SOV and we perform a fundraise, then this would reduce the amount of tokens we would need to sell to perform the raise which would be extremely beneficial to Sovryn’s treasury and to the amount of tokens we have to give to large VC whales.
Thanks
As of April 9, 2022 there are 3,075,377 voluntarily staked SOV. They hold a voluntary voting power of 16,401,994 according to @CEK. Dividing the voting power by the staked SOV, the staking duration indicator provides information about the average staking duration. If you consider the quadratic formula for voting power and the formula for SIP-24 liquid SOV APY, that means the average staking duration is round about 800 days and the SIP-24 liquid SOV payouts should be somewhere near 600.000 SOV per year right now. Of course this changes dynamically but it gives a pretty reliable overview of the SIP-24 payouts.
600.000 SOV a year or 50.000 SOV per month is not much if you consider all the other SOV that hit the market (1 mil+SOV per month from early investor unlocks and liquidity mining rewards). If all SIP-24 SOV would be sold on the market (which I highly doubt), it would mean a maximum selling pressure of $150,000 per month.
Suspending these SIP-24 rewards will hit people that are committed for the long-term. It will not hit their initial investment but possible future investments as these people tend to compound their staking rewards. At least the staking duration chart suggests that. Providing the ability for long-term stakers to compound is a super-power of Sovryn and the hardcore-community. You want these people to grow their governance power like that if you want to have good governance.
A short-term price appreciation due to speculation / Last offer of SIP-24 rewards is likely as you explained, but this might only drive short term speculation instead of having positive mid-long term effects. In case a funding round happens and we want quick price appreciation, Gimp’s SIP’s should also provide for that. In both cases, it would only be news related and not to actual changes in token inflation as these will not be seen in the short-term at all.
In my opinion, suspending SIP24 rewards is the wrong step because
a) It’s only a very small number of SOV when compared to the overall tokenomics (50,000 SIP-24 SOV vs 420,000 LM rewards and 720,000 early investor tokens per month).
b) SIP-24 incentivizes locking up SOV and committing long term to the project, which is exactly what we need right now.
c) It would likely hit the most committed and active part of the community. And it would cut their ability to compound which would be a severe hit to the attractiveness of the protocol.
d) SIP-24 can drive new participants into exploring staking and learning that they actually get rbtc streamed into their wallet each week. This feature is not known well enough and should be advertised much more. “Buy your stake in a “company” that distributes the revenue in btc to their stakeholders on a weekly basis. BOOM, billion dollar idea. Saylor would look like a noob.
Voting power is going parabolic right now and staked SOV is in an uptrend. We should not kill these good signs.
To your point that the bi-weekly SOV payouts for SIP-24 is causing the selling pressure: It’s the same day for SIP-24 and liquidity mining rewards to get paid out, the LM rewards being of much, much larger size than SIP-24 rewards.
There, I’ve said it:
The liquidity mining rewards might just be too high… Reducing them with the huge impermanent loss most people have right now is the real pain that has to be dealt with.
We should talk about the XUSD lending pool and the BNB/BTC and ETH/BTC pool rewards. Specifically the XUSD lending pool has lower risk due to no impermanent loss so it could be argued that the SOV rewards should be lower there. If we were to reduce the rewards from 15k SOV per week to 5k per week, we’d save more than 40k SOV per month alone, almost the same size than cutting SIP-24 completely. Are XUSD holders or SOV stakers more likely to sell their SOV rewards for XUSD in order to compound? If you then reduce ETH and BNB pools by 5k SOV/week each, we’d already have 80k SOV less per month, almost double the amount of SIP-24 payouts.
I’d add that the XUSD pool should also be taken care of by babelfish and not only Sovryn and that reducing SOV rewards and implementing FISH rewards could be a solution that totally makes sense.
Cutting SIP-24 would just be noise. I recognize that the exchequer has the power to do so without a SIP but please consider these thoughts.
Sorry if this was a bitt too off-topic for this thread that should actually focus on Gimp’s great proposals. If the Exchequer has concerns, discussing the numbers might make sense.
I agree wholeheartedly with this analysis. But it was at least worth mentioning we have possibility to modify SIP24 if we wanted to discuss.
I don’t think we should reduce SOV, BTC or XUSD rewards yet. But i’d be open to reducing ETH and BNB reward down to zero. That seems to align with our vision to narrow our focus and reduce circulating supply. The issue is how do we go about winding down an AMM pool? We risk liquidity getting so low that it can be manipulated on its way to being deprecated. If we can solve or reduce that risk the we could do something like ok LM rewards for ETH and BNB are being cancelled but we’re willing to buy those LP positions for a 15% discount on SOV price with a lockup in Bitocracy for 3 years. That way the liquidity doesn’t leave the protocol and we can capture it on our balance sheet, which we need and we prevent the $SOV from going on market.
What you think?
I think that’s a pretty good idea.
Protocol owned liquidity was discussed before but i imagine it would require some dev-work to implement it.
Reducing but not cutting rewards completely might work as well until PoL gets implemented. I don’t know how dangerous the manipulation on low liquidity pools is, so i cannot express an informed opinion on this.
Right. The PoL model from Olympus is inherently broken as proven by token price and it would take us too long to build. What I am proposing is a very manual and minimally viable alternative. We don’t have the time or dev resources to commit to building out an unsustainable PoL. This is just a janky alternative that may work.
Let’s see if we can get some answers on Discord about the process for deprecating an AMM pool.
I asked in Technical Discussion on Discord and Ororo said it shouldn’t be a huge risk if we deprecate AMM pools such as BNB or ETH. So we could theoretically wind down these LM rewards.
Pros:
Cons:
Ultimately at $3 per SOV and 30K per week that’s less than $100K selling pressure per week which honestly isn’t a ton. Is the juice worth the squeeze on this?
Perhaps we could purchase the LP tokens in exchange for LP tokens in BTC/USD and BTC/SOV.
Or purchase for SOV.
Where are we getting BTC/USD and BTC/SOV LP tokens to sell from, does Exchequer have LP positions in there? Or are you saying we would auto-perform the swaps on the back-end?
What if we offered two options:
I think offering SOV at 15% Discount + Max stake on Bitocracy that grants an additional 29% APY via SIP24 rewards is pretty juicy for the believers. This limits the exposure of additional $SOV sell pressure onto the market. It’s basically a manual integrated PoL model.
Gimp, I apologise.
I took an assumption.
And when I saw the 10% lock, I was like “what good will it do, it will not be 200 mil mc it will be 180 mil mc project”…
But everything what you proposed here is beneficial to Sovryn and is definitely worth implementing.
I just briefly skimmed and assumed because for example Phrygian here guy is either the insider of Yago or very negative towards me since start and active nay sayer… so I made quick judgement.
Accept my apology.
I see you are doing something constructive for Sovry, you took time to make it look doable, and this would definitely be a good change for SOV. Maybe find how you can make it a bit stronger, more aggressive, other than that, good!
Respect!
Basically those nay sayers who are from the ranks of the team, and Yago caused that non-constructive atmosphere.
Basically, his lies were the first what the community caught upon.
Where him and the community separated, and where I started taking more aggressive tone… when he finally said he’s willing to do the 10 year lockup instead of burning, in the spirit of compromise I said, let’s do it, and let’s do NOT ALL, but 50% of your tokens, which are easy then with new tokenomics to double in value. Sure, I’d like to see them burned and new investors attracted by the fact, however, I thought of some middle-ground… that’s acceptable for both.
Later when he started acting like he doesn’t know what’s talked about, ignoring, not willing to do the sip which had major proposal, I started calling upon his bullshit.
I hate those things.
I respect men of word.
I respect men who are constructive.
I respect men (with ego or without) who put the greater good first.
For example, If I’d have ego, I wouldn’t apologise to you.
I apologised Gimp the moment I realized you want good for Sovryn, and not for your crown statue (erhm Yago?)
Got my point?
Cheers!
**[quote=“dseroy, post:21, topic:2509, full:true”]
Yes you can. 1. Don’t spend money on outside agencies, you are keeping on doing the same mistakes you did with marketing. You must lead it, at home. UX you change with LOVE… thinking with the mind of the user… UI-UX is done within 3 weeks MAXIMUM!!!
Don’t be pussies.
Any changes that could be completed in 3 weeks would be minimal improvements at best. We’d be right back in the same position where people such as yourself are complaining and asking for change. We can’t make band-aid changes. To be frank, we just don’t have the internal resources that have both the bandwidth and the skill level we want the UI/UX to look like, so out-sourcing this until we do makes sense. I know it’s not ideal, but I am just trying to be as transparent as I can with you. If you have front end developers we could hire on to Sovryn that would be super helpful! Preferably not the ones that designed BCW site though.
Thanks!
Hey @dseroy i took the data from the Sovryn wiki and i looked at the Volume for ETH/BTC and BNB/BTC in 2022. The ETH pair had about 400 BTC in Volume in Q1 and the BNB pair had about 250 BTC in Volume. So overall 650 BTC in Volume in Q1 for both pairs combined.
The platform or staker revenue is 0.05% of that so in total 0.33 btc. In comparison, about 420.000 SOV or more than 1 million USD at current price were given out as LM rewards during that time. It’s unsustainable but the pools are being used.
Interesting. So it seems the swap revenues are pretty negligible in comparison to the LM rewards. To be fully accurate we’d want to see what % of those LM rewards are actually being sold into the market after they vest. Another thing we will need The Graph for. But your point is taken that us deprecating the BNB or ETH pools shouldn’t be super detrimental.
We’ll add it to the list of things to talk about on the Tokenomics meeting.
I would support this sip
A a UX designer I can confirm that “3 weeks UX UI” gets you a shitty UX UI, especially with a platform of that size.
@TheGimp - respect. I fully support Your approach, as it allows to focus the discussion on specific aspects.
Locking a good chunk of SOV tokens for 5-10 Years without Voting Power and fees share - that is a good start. I would just formulate the vesting length differently: 5 Years of Cliff + 5 Years of linear vesting (10 Years of lock up in total). There is one thing which is not too precise.
“This Vesting Contract will lock these tokens for a period of 10 years. These tokens will not earn Voting Power, nor a share of fees accrued by the Protocol. It is a simple lock-up contract.”
Linear unlocking (I assume monthly) will result that after 5 years unlocked tokens might be used for the governance and fee accumulation purposes. Actually the same applies to all first 3 GSIPs.
Just to summarize - GSIP1-3 will lock in total 22,000,000 SOV (22% of total supply) for 5 years (cliff) + 5 Years of linear unlock/vesting. Only unlocked tokens could be used to gain Voting Power and participate in earning fee.
GSIP4 - Incentivizing the Governance Participation - I like this idea. Simple and worth testing how it will be approached by the Community in the reality. Very similar to what I have proposed for FISH stakers. I think that applying boolean logic to that is a way to go also for BabelFish.
I really admire Your work put in those proposals.
Then you’re a moron, like others are.
“you can confirm me that 3 weeks gives me…”
It’s same like you said:
I can confirm you that 3 months gives you a shitty house, while 3 years gives you a good, while 3 decades gives you an amazing house…
Bro, Chinese built a fucking hospital in a week!
while morons can’t do shit in years…
It’s not about time, it’s about efficiency.
Maybe you are incapable of doing the UI within 3 months… or 3 weeks… but capable teams are.
And I gave them 3 months, and that’s fully fully fully doable by anyone capable. Now either join the losers club and lick your wounds how everything is impossible, or fucking man up you and Yago and the sovryn team that was incapable of achieving shit on their own… and fucking start achieving something.
I told you how. I showed you how. You have to listen, put your ego aside because I’ll keep on poking it till the end… as if you remember, I’m not paid to help you… and you can gather a small but WILLING team and make it happen.
Marketing team should have no salary!
Not a fixed one…
waiting for a rebranding to start working on UX/UI is madness… One has only little to do with the other and a rebranding of a working functioning UI is just adjusting some CSS scripts. I genuinely believe a UI needs LOTS of iterations to become very good. The sooner these iterations start the better. Get a good frontend guy and a designer and iterate. Make stuff available on testnet. Let people try out far out design concepts. GET THE FUCK GOING. you can’t propose to wait ANOTHER YEAR until you actually START working on the UI/UX thats just insane… You and pretty much anybody at this point has identified the UI/UX as a major hurdle to adoption. You CAN NOT WAIT to fix it maybe sometimes in a year or so. This NEEDS to happen now - new Branding or not. Start playing with ideas how the trading experience is - it doesn’t matter if its black or white background, Helvetica or Comic Sans (well ok maybe not Comic Sans) its the EXPERIENCE - its the X in UX that needs desperate attention. Its layouts- white spaces, button placements, information placement etc. Nobody cares If there is a comic character or a superman ripoff logo on the pages - it needs to be a smooth experience and work on that can start NOW. You don’t need a blockchain enthusiast to work on that - anybody with UX/UI experience on good old Web 2.0 can help you here - I am sure the talent pool is filled with excellent people - also your community will probably help with the design in itself if its clear the process actually starts here and now and not in 10 years…
I would even go as far as saying that a good UI that has grown organically to be close to perfect can actually be or at least drive the branding…
