#Change SLP revdis weigth

1 messages · Page 1 of 1 (latest)

buoyant steppe
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Currently only the ILV in the SLP counts for revdis. With staking rewards dropping to 30ish percent, some people have started exiting SLP and moving to ILV only staking to chase potential higher revdis.
This can lead to the LP getting smaller and smaller, which can cause problems. We can face unrealistic valuation of the token followed by a big decline. Which will damage our reputation.

We can start talking about solutions to this, that can be into place if.

Why I think now is the appropriate time for this?
If people exit SLP and lock for a year in ILV it will be too late to change incentives. Stakers would not have the choice to pick.

What I think a good solution to this is: Split the total revdisn in 2 piles. e.i. 50/50, 60/40, 70/30 Depending on how much liquidity we want in the LP.
This accomplishes the followin:

  1. It gives arbitrage opportunity between the SLP and ILV staking. Which will ballance out the LP depending on the chosen percentage.
  2. This is give SLP stakers the peace of mind that their money(in dollar terms) will earn them the same revdis regardless of the pool they're staking in.
  3. By changing this percentage the DAO takes control over the amount of liquidity it wants in the LP.
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<@&1107754638884745236> I've talked about this with @lime topaz during his epoch. We decided it was too early to think about this like a year ago. But now that the end of staking rewards is less than the max lock time. The window to address this is getting smaller.

deft star
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Good idea Ned.
I think it is already too late.
People already moved to ILV only.

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Low liquidity is gonna be good in the bull. Let it rip

wooden siren
random bridge
# buoyant steppe <@&1107754638884745236> I've talked about this with <@865392375902502943> during...

This is an idea we have already discussed internally (and imo a simple solution, amongst other levers we can also pull...)

it is certainly on the agenda for this epoch as we get closer to the end of yield rewards and to the start of revdis

we should have a proposal with a more comprehensive plan to solve this issue within the next month and a half (likely within a month)

Thanks for kicking of the public discussion surrounding this Ned x

supple wren
# buoyant steppe <@&1107754638884745236> I've talked about this with <@865392375902502943> during...

It's even in the Governance newsletter for the Strategy Subcouncil topics! though I agree it could have been elaborated upon more 😅 this one in particular is on me :]. I expect people to go to the meeting notes if they want more specific answers.

"Lastly, the Strategy Subcouncil initiated discussions concerning the upcoming conclusion of Liquidity pool rewards for Sushi Liquidity Providers. The team will present concepts for transitioning into the next staking phase following the conclusion of rewards"

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I do think it's useful to have a thread for this where Strategy can inform the community about the plans they have or progress that's being made if not under NDA 👀

buoyant steppe
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Another point I'd like to raise here. SLP staking can get hit real hard with impermanent loss. And the more ILV raises and people move to the single ILV stake, the worse it gets. Doing the weighting fix handles revdis. But it does not cover IL. I don't have great ideas about this one 😦

dawn lichen
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I think it's a little late in the game to add this, at least in my opinion. I do think we need to explore staking in general outside of ILV rewards and REV DIS for high weight/lockups.

shrewd nexus
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100% No -- This should never be allowed .

Nothing about the SLP pool should change. NFA DYOR The smart move if your interested in REVDIS is to completely abandon the SLP pool .

At this point it's death had been predicated ages ago. No one wanted ever wanted to deal with this subject because " not time relevant". I brought this subject up personally but no one would even give me an answer to this ( as usual with my posts and suggestion) #1040244853155577876 message

Now its too late to make changes to the ratio At most the SLP pool should be decommission at the end off yield if the math people see its not feasible viable anymore.

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Added note I was 100% SLP and have recently moved ALL my ILV to the ILV only POOL

buoyant steppe
buoyant steppe
# shrewd nexus ***100% No -- This should never be allowed*** . Nothing about the SLP pool...

Don't you think you're looking at this from the point of what's good for you, not what's good for the DAO? You're still going to get more appreciation of your ILV.

Thankfully the council has to do what's good for the dao regardless of what people think on this one. I just wanted to bring awareness and ideas about this, not a vote whether or not it has to be done the way I've suggested.

shrewd nexus
buoyant steppe
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I hope you know decomissioning the SLP is not something that can work. Since we need it for the revdis to work as intended. There needs to be a solid place in which the dao to swap it's earning. It will be bad for the DAO to swap on a low liquidity pool and take slippage losses on it's whole revenue.

shrewd nexus
buoyant steppe
deft star
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plus LP provider get LP fee anyway

deft star
tired plinth
light grove
hot grove
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I am heavily in both pools and will be watching commentary on this. Thanks for bringing this to attention.

shrewd nexus
light grove
shrewd nexus
# light grove You’re not wrong. Everything is an opinion. In this case without an incentive f...

yes imo it will. Its only logical that it does so as I pointed out above .

However This was known years ago... the problem existed when the first ILV was staked , and the ratios set in the white paper.

It was brought up at least a few times and it was brushed off as unimportant each time. Now that the inevitable has happened people are in panic mode. Only If anything is done to change the SLP pool then it also must be give n to the ILV only pool to be fair to the ones that have switch ...which will nullify anything you do.

See the Catch 22 that exists now ?

If a solution had been officially in place years ago people would have been able to make an informed choice on what path they would want to take now .

shrewd nexus
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I don't have a "fair" solution to this catch 22 as ..as stated How do you change the rules and add incentive when the "farm" is almost over ?

If we had proceed with Tokmak as it was hyped by the team at the time its in the relm of probability we would not be in this situation. Yet no clear answer has ever been given why it was effectively "ghosted"

wooden siren
# shrewd nexus " We do need an incentive for stakers to remain in the SLP." that is an opinion...

Its a nuanced situation. Why did we have SLP in the first place should be the question. My understanding is that this was created to incentivize people to put liquidity for ILV token trading. High liquidity = low to no slippage. Now when everyone removes their liquidity off SLP what will happen when you trade ILV? High slippage.

So yes, there is a need to have liquidity in SLP as this will encourage trading of ILV in the marketplace which includes that ever so precious revdis where the DAO trades ETH revenue to ILV to be distributed back. Can the DAO provide the liquidity without the community? Maybe in the future but more than likely we need to keep incentivizing the community to provide said liquidity.

Note DAO removed all its ETH out of SLP an epoch ago.

tired plinth
wooden siren
# tired plinth What are the solutions investigated ?

Kieran was supposed to present a solution closer to the end of the rewards of SLP. At the same time, SSC has been collating and monitoring the community's feedbacks as well as other council members opinions on this topic.

So we encourage more ideas from the community on this topic. I know both @hazy kraken and @spring silo had thoughts on addressing this same issue in different channels or threads.

buoyant steppe
spring silo
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This has been a mayor concern for me because as I explained in another thread that by default because of the 2 year delay staking as was originally planned got derailed, specially SLP.

I'm voting 👎 on this one because I don't like the change in weights because it further deviates from the original model that people invested in. I suggested a one time ''NFT incentive'' for a year after open beta to help retain ILV and SLP holders and mitigate the sell off. I'm happy to see other people voicing their concerns as I think it's paramount to do something about it this epoch. I got some feedback from @wooden siren but not any of the other strategy council members. I'll wait for their proposal because I know it's in their radar.

buoyant steppe
light grove
elfin summit
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Prefer a wait and see approach. SLP might not need artificial incentives and getting away from the sushi protocol is probably a win anyway. I haven't looked lately but we're probably still 100x bigger than any other pool on sushi. SBF is chef nomi.. let's just get away. A pool on uniswap like every other coin would be fine.

hazy kraken
# wooden siren Kieran was supposed to present a solution closer to the end of the rewards of SL...

Honestly not much has fundamentally changed since discussions about this almost a year ago. Some of the options are less viable given the current ability of the DAO to provide liquidity. If anyone is interested in reading more about options, I'll just reference the (long) discussions here: #🥩〕staking message

I have confidence SSC will find the best way forward, and that could very well be implementing pool weights for revdis.

tired plinth
shrewd nexus
shrewd nexus
# hazy kraken Honestly not much has fundamentally changed since discussions about this almost ...

"Honestly not much has fundamentally changed since discussions about this almost a year ago"
did you read my posts ? nothing changed since it was first published - it just was never a "priority" no matter how many times someone brought it up

"I have confidence SSC will find the best way forward, and that could very well be implementing pool weights for revdis."

Waiting to hear the political spin on how whatever they come up with is fair for the peole who already left .

hazy kraken
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It has implications whether we do something or choose not to do something.

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Tokemak has its' own set of problems, it's not just a magic solution. We shouldn't treat it as such.

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There are also quite a few comparable solutions similar to Tokemak, none of them come without cost.

shrewd nexus
shrewd nexus
hazy kraken
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Maybe the best solution is to do nothing, and accept that there will be less liquidity as incentives to provide liquidity decrease. Maybe the volume created by vault buys is sufficient incentive. It's not about changing things for the sake of it, it's about assessing the options and choosing one that makes the most sense, instead of defaulting into an option that may not be in our best interest as a DAO.

hazy kraken
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We also have a better picture now of what options are viable. If we'd opted to provide additional liquidity on the DAO side 2 years ago, that wouldn't have been a great solution, and we'd be revisiting this now anyways.

shrewd nexus
hazy kraken
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I'll just reiterate that I wasn't privy to any information about why Tokemak didn't move forward, but I will say they wanted a fairly large amount of ILV to create a "reactor" for us. My recollection is that it was over 10% of the currently circulating supply at the time. It also would have required someone to direct liquidity to ILV, utilizing TOKE and taking the risk of IL on themselves to do so.

It's a novel system, but it's not like it removes some of the problems inherent to liquidity provision. It just splits the risk of IL from the provision of the token liquidity is being provided for.

shrewd nexus
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@hazy kraken my main concern is "fairness" to the people who have pull out ---which is probably a significant number or this would not such a panic.

hazy kraken
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There's no need to panic, this is just an idea. I'd suggest we evaluate any option put forward individually. This option seems a bit extreme to me (splitting revdis 50/50 or steeper). A more moderate approach would be to pay revdis on the value of a SLP position, instead of on the ILV component of a SLP position.

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Another option could be establishing a pool with higher fees (ex. 1% via Uniswap). That would create additional incentive to provide liquidity, while not creating any upfront cost for the DAO. As a longer term solution, it could be possible for the DAO to provide its' own liquidity in a lower fee pool, allowing for cheaper transactions for retail buyers. That's just not a great option now given where our runway is at, and the amount of liquidity that the DAO would need to provide to have an impact.

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These are the discussions SSC has been having, evaluating each and picking them apart for what the pros and cons are. I genuinely look forward to what they come up with.

shrewd nexus
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@hazy kraken thanks for your thoughts and time you always have proven to be insightful on various subjects . I will wait till somthing official pops up.

charred veldt
wooden siren
charred veldt
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If staking is moving to an L2 anyways once yield farming ends then should that same L2 be used for the major liquidity pool? Or is staking actually going to happen on IMX? But almost a year from now is a long time and maybe uniswap v4 is epic it maybe it’s trash and something actually good is created and launch just in time for the bull run. So many unknowns. Luckily there should be at least SOME revdis flowing through the current LP before then and at least one part of what will be the ongoing situation will be observable.

I am also assuming that two piles won’t be nearly enough piles. I count 5 different contract addresses that are Revdis eligible. Predetermined weights for revdis don’t seem agile enough to be a viable solution.

deft star
hazy kraken
deft star
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this is inline with how revdis works

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up only

hazy kraken
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It seems bold to assert that there's "no good solution" when multiple options I presented don't negatively (or disproportionately) impact the ILV pool's portion of revdis.

Low liquidity presents a risk point, in that traders using automated tools can extract disproportionate value following vault buys. It would be a mistake to not consider that eventuality if we were to do nothing and pretend that low liquidity is going to be fine, and "up only", as you put it.

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Higher liquidity, or distributions as ETH, limit or eliminate that element of value extraction, driving value to what I'll call genuine ILV holders and stakers.

tired plinth
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I like the distribution as eth. It’s also a very easy way to « market » that illuvium distribute eth to stakers. I feel the message more appealing. Make things easier for everyone, especially the treasury.

But I know a lot of the community will push back because they want the buy pressure on the token.

shrewd nexus
deft star
wooden siren
# shrewd nexus If that is what you consider engagement.. feeling totaly mutual ser. You made ...

Sigh here we go again. Okay here we go:

your statement was :

" We do need an incentive for stakers to remain in the SLP." that is an opinion not a statement of fact. We do not "need" to do anything.

I responded that its nuanced. We can do "nothing" and let traders get wrecked or we incentivize the community to keep it in SLP to provide liquidity. There was no mention of me agreeing to the proposal at hand but just that SSC is looking into ways we can address the situation. So yes, I do not agree with your statement.

Now if you wanted me to read your posts before this. Here they are:

100% No -- This should never be allowed .

Nothing about the SLP pool should change. NFA DYOR The smart move if your interested in REVDIS is to completely abandon the SLP pool .

At this point it's death had been predicated ages ago. No one wanted ever wanted to deal with this subject because " not time relevant". I brought this subject up personally but no one would even give me an answer to this ( as usual with my posts and suggestion) ⁠Unknown

Now its too late to make changes to the ratio At most the SLP pool should be decommission at the end off yield if the math people see its not feasible viable anymore.
Added note I was 100% SLP and have recently moved ALL my ILV to the ILV only POOL

What happens when everyone moves all their SLP to ILV pool? No liquidity. People get slippage including the DAO when they trade ETH to ILV for revdis. Now are you saying, we as SSC shouldnt even think about the impact of that?

Decommissioning the pool and using an alternate means could work.

As proven by my post almost 1 year ago that got completely ignored ⁠Unknown

Again this has nothing to do with the REVDIS ratio.

Honestly Ned we have vastly different ways of looking at things and have lost count on how many times we have disagreed over the years .

Here youre talking about Tokemak which I cant comment on as Im not well versed with this and I believe Blickter tackled more on.

But I also agree that alternatives may be explored but the simplest way to go about this is to incentivize SLP with something other than yield-farming. What that may be, is still up for debate.

So, I have no clue why you want to be sassy at all.

deft star
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you can't give incentive to SLP stakers without taking from ILV pool.
even if we are giving valuable NFTs, it is taking away from potential revdis, and dilluting the NFT supply

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SLP staker has been compensated with high apr.
Look at high low ILV poor apr is, and no revdis for 2 years

wooden siren
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Agree which is why theres no decision yet on what to do with SLP. Im not advocating for anything just yet just that we need to find ways to provide liquidity for the token.

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But to say that we shouldnt just let SLP be with no liquidity for ILV token is worse for the DAO especially if were pushing through with revdis in ILV token. Now if it was ETH revdis then thats another discussion altogether.

deft star
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We can use the treasury and ingame rewards token

tired plinth
dull sky
tired plinth