I like the way of thinking here. Question from my side. Would there be a possibility to ‘sell’ your contract. So lets say you lock up your BALN for 3 years but you want to leave the crypto space after a year and sell everything you own (one would be crazy:P) but you dont want to pay the penalty fee. Can we somehow program it so that you can sell your contract in an easy way without paying the fee. I think it would make the system more attractive and efficient. Moreover, if the parameters change after the contract is agreed upon (for instance, the DAO decides to change the way vBALN value decays), you will still have the possibility to sell the ‘old contract’ to someone, which might be more valuable to the buyer of the contract and financially more attractive than to start a new contract themselves with the new parameters.
In general, i really like where this is going and this way of thinking will definetely increase BALN’s utility
Firstly, I do like the proposal - can see it being slightly confusing at first for people to digest, especially for new users coming into the ICON Ecosystem from other communities once we have BTP active. I would personally like it more simplified / black and white but the overall thought process is solid.
One query. How would this directly benefit users that are not LP providers? i.e. users that want to take out a loan to use on OMM or other additional reasons. I guess the amount of BALN would increase with the loan size you take out but could you also have more incentives…
If you can sell it you’re back to square one, all BALN will be locked for 4 years, and people will trade vBALN, and… nothing will have changed so you’re better off just not doing it.
On point of flattening the network fee distribution/vote weight curve, I disagree, it only SEEMS harsh because the 1 week looks so much less than the 4 year, but there is significant risk in that long a lockup, if it was flatter again, I think don’t bother, just keep BALN.
Again, 4 years is a damn long time, really long, we should not trivialise people commiting their tokens for that period. Why shouldn’t someone that has no option but to ride it out for 4 years have more say than someone that can get out in a month. These are governence decisions that can change the trajectory of the token drastically.
Imagine you’re locked in 4 years, and someone progressively implements a series of bad proposals with short term gain and long term detriment, doesn’t sound hard right.
That level of flattening is a hard disagree from me, especially when there is a perfectly acceptable prior example thats by all metrics very successful.
you are lucky you find baln, not too late yet. Balanced offer zero interest for you . only initial 1% originating fee which you can’t find anywhere in the market. On top of that, you will get baln reward. Borrow APY ( which can’t find in anywhere) now sitting around 65%.
Is your choice to lock or not, you can opts to take loan. To ensure the platform continue grow , baln team is refering to top class DEFI dao tokenomic ( i.e. Curve, comp, aave etc) for us which we are lucky enough if you hold baln token and if you feel baln can grow more in future. you can youtube and compare the good or bad.
I was just chatting about something like this in Telegram. I would say that this is something that could be built on top of Balanced rather than part of the core product. Another option I’d say would be to add this in the future, as developing just vBALN and the planned system will be pretty intense. But definitely like the direction
Any reward bucket could be boosted. While there has been discussion to remove or lessen Borrower rewards, in the current format, borrowers would also stake BALN, earn vBALN, and boost their borrower rewards
Solid point, and I do tend to agree. @Ed_Atts curious if you have a response here. Four years is really an incredibly long time, especially in the crypto space. For governance I think it is important to give a considerably larger voice to people that lock for 4 years vs 1 week.
This means those with the largest voice have the best intentions for the long-term of the platform, which is a great consequence of this proposal imo.
Also, there are development benefits to limiting the amount of logic. If it’s purely vBALN, that makes it easier. Each piece of logic adds considerable complexity and potential issues during development. Of course, it’s all possible to develop, just want you to think about the ROI of spending more dev time on additional logic compared to the benefit this logic brings.
@arch your response was also very focused on the Governance side of things - do you have any specific thoughts on the flattening of the network fee distributions? Currently I’m leaning toward keeping it as-proposed, but do want to explore this a bit further
This all sounds pretty good. I want to take some time to wrap my head around it a bit more when I have some free time, but generally I like what is being proposed. Being able to ladder your staking commitments is key to this and I do like the idea of (eventually) introducing a early withdraw penalty, but that penalty should be high enough to dissuade this action too often.
In terms of boosting rewards for a given LP: I’m assuming the rewards simply get “skewed” to favor those with higher staking levels in this system. Or is it that there are there additional rewards coming from somewhere else?
Yes there’s some very good reasoning here @arch@benny_options. I will concede on flattening the voting weight curve. If someone was to lock for four years, it makes sense that they should have out-sized control over governance.
With respect to the Network Fee distribution curve, I do still think some degree of flattening would be sensible.
I have the same thinking with regards to network fees.
I am against the kind of flattening as proposed by @Ed_Atts . Its a similar argument to me.
I would like to also draw attention to the fact that the 4year individual is not getting the 4 year ‘boost’ the entire 4 years. They have to repeatedly recommit to resetting to another 4 years to get the boost throughout.
The question I want to ask is, who is staking for 1 week, 1 month? I think the comparisons for values for very short durations versus 4 years is not very meaningful. People with different goals, and I am not against traders or speculators, but these people are not staking for 1week or 1 month either. If they required yield on their holdings, they would LP it.
I would like to know the kind of user that would benefit more from the flatter proposal, and then work backwards to ask, is this the sort of user we want to incentivise.
Also the presence of a prior successful implementation again lean more towards copying their homework.
I think this is an excellent way of thinking and a great point. @Ed_Atts I’d turn it back over to you to think this through given you initially raised the idea of flattening network fees / voting weight. My quick-take is that people staking for short periods of time are users that are:
1.) Short-term traders looking to boost yield on LP positions without committing to Balanced longer-term
2.) Hesitant users looking to test the waters
3.) People looking to take advantage of a spike in network fees and briefly stake their BALN
4.)???
So far I don’t see a particular reason to giving any advantage/flatter playing field to these folks but of course open to discussion. Again, please do consider the additional development complexity and whether or not you believe it would be worth the additional resource investment
Thanks for your reply. I meant, selling the ‘contract’, not the vBALN. If you lock your BALN for x period, you sign a locking contract with certain parameters. Lets say the parameters change over time, but yours remain the same because you signed the ‘locking contract’, so you sell your BALN locked for x period. Refering to this quote from
Scott:
In that case it can be interesting to be able to sell this contract (not the vBALN).
So now, after you sold, the buyer of your contract now owns all the BALN in the contract and can profit from the ‘old’ parameters that are in the contract.
@benny_options is it true that this parameter will stay the same for the whole lock up period (lets say 4 years), or can it be unilaterally modified?
Just dropping ideas here, i really like the active participation from everyone👌
And as for this idea you’re working on here, would you mind putting it down into a one-pager, super high-level, and DM it to me either here or on telegram? I want to dive into it a bit deeper but also don’t want to clog the thread.
Regardless of whether or not your idea is sound, I’d say we wouldn’t implement this until a v2 of the economics, like an upgrade.
Will do. Can imagine indeed this is a huge thing to build. Wouldn’t give the epic high priority in this phase but the way of thinking might already affect design decisions you guys make in the short term. I will send you a one-pager with the concept i am thinking. I have no financial background though but we are building DEFI so that doesn’t matter haha😜