Like cryptocards: stake XVS for VIP levels and more rewards

Venus Governance Venus - Governance Discussions
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This proposal is a work in progress, it is going to be edited depending on the discussion, the basic idea is using XVS deposits to achieve VIP status, as in crypto cards. Thanx to @CryptoEllis for inspiring it.

RATIONALE

In cryptocards holding a certain number of coins allows to access benefits, like higher cashbacks. This encourages long term holding of the platform coin and demand of it turn out to be proportional to the growth of the user base.

Now many farmers are just selling XVS in real time, depressing the price. The staking strategy incentivizes every farmer to be a long term holder

Only with a ** formula proportional to growth** we can activate a feedback loop: more growth, higher price, more incentives, more growth and so on.

Other proposals are not growth linked but inflation linked, say give x% of the daily inflation to XVS holders. They are also good, because now inflation maybe excessive, but are not mathematically linked to growth, so do not achieve the feedback loop structure. In every case we do need to discuss the 35% 35% 30% rule and XVS pools.

A COUPLE OF EXAMPLES TO DISCUSS AND SIMPLIFY

One possible idea could be the cryptocards STATIC MODEL:

Holding 100 xvs allows you to get the Vip 1 status and your farming power is boosted by 10% : ** for example:**

if basic rewards for VAI minting are 30% and you want to mint 1000 VAI, if you also hold 100 XVS you are going to get 1.1*30%=33% APY

Holding 1000 XVS allows a 1,2 multiplier

Holding 10000 XVS allows a 1,3 multiplier.

I would stop to the 1,3 multiplier in order to not penalize too much the small guys, newcomers or those who prefer not owning XVS

But the static model can be improved with a DYNAMIC MODEL:

Holding in XVS the 2% of the dollar value of the coin supplied allows a 1,1 multiplier

Holding in XVS the 4% of dollar value of the coin supplied allows a 1,2 multiplier

Holding in XVS the 6% of dollar value of the coin supplied allows a 1,3 multiplier

** for example:**

if basic rewards for VAI minting are 30% and you want to mint 1000 VAI, if you also hold 60$ (6%) in XVS you are going to get 1.3*30%=39% APY. Note there is not barrier to access with respect to the 100 XVS static proposal.

CONSEQUENCES OF THE DYNAMIC MODEL :

In practice If all the 400 million supply+ 165 million borrow+ 40 million VAI wants to stake XVS to get full rewards TODAY they would need to stake:

(400+165+40)*6%= 36 million $ in XVS. Sounds good? this is just the staking at 2 months from launch. Actually the fact that is proportional to the TVl makes the economics pretty much like a fee.

We could also escalate to 1.4-1.5 multipliers, maybe mixing with the static model for top tiers.

Since they own XVS by default, as a bonus XVS suppliers always enjoy maximum multipliers! Moreover many will borrow XVS and its supply APY will increase. Multipliers can be applied also for a discount on VAI fees and even to the reserve factors.

Please provide feedback, issues and proposals on the same Cryptocards- like model.

9 Likes
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Thanks for starting this discussion. The rationale for my suggestion was to look at the Celsius tokenomics and take the best parts of it and see if they would work for XVS. The biggest difference being that Celsius is a pre-mine whereas XVS is starting from zero.

That said nothing to stop us from adjusting, or adding Tier levels as more supply is minted.

I confess I am not a fan of setting static rewards per coin and this allows us to remain equitable to all the other non-venus coins whilst creating a strong HODL culture for XVS minted. It also creates more demand for XVS for new suppliers that find the protocol in the months to come which a flat interest model does not.

CE

1 Like
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This one looks very good, the only question is how set fixed reward for vai if vai supply is always changing and now APY depend on xvs price as well. Am I right that you suggest to split current daily xvs vai rewards using multipliers? If so then it shouldn’t not be difficult, let’s say we have 100% of daily rewards and 10 users of every type: no multiplier, 1.1, 1.2 and 1.3. I’m not sure about the math but it’s smth like no multiplier users get 21.7% daily rewards, 1.1 - 23.9%, 1.2 - 26.1%, 1.3 - 28.3%.

BTW, this model can be applied to lenders and borrowers as well, I get more daily rewards for supplying btc if I have xvs than people who supply btc but have no xvs. And this can make real demand for xvs, vai doesn’t have usecase apart from vault right now. It’s best to apply such model to whole platform, to lenders, borrowers and vai minters as some people only lend funds, so they are not motivated to hold xvs if they are not benifited.

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this is a good idea, it could be a system to prevent the amount of xvs needed to stake from going too high.

The holding benefits are based on how much xvs to have. How much XVS do you need to supply to enjoy benefits?

Either a multiplyer in the APY for the VAI stake or a discount of the same amount in the stability fee, both would be good i think

1 Like
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You have the usual, say, 5000 XVS pool for VAI minting (or vaulting) when you split the pool you apply multipliers to all participants and get the result.

UI interface will show the APYs presently enjoyed by the 3 different tiers.

You just check the balance and calculate the multiplyer, I think the simplest way is,

for every block,

calculate the total dollar value supplied+borrowed+minted by the user

If XVS holdings value/ total value > 6% apply 1,3 multiplier to all the previous numbers during the pools split.

SIMPLIFICATION: We can also use a continuous function so 5,5% is different from 6% or even from 70%, with a suitable curve, i would love to model it. For display purpuses you could still use the 3 tiers.

P.S. @EmilED358 Im’ sayng XVS suppliers are are always top tier is because XVS held/supply XVS is 100%. Actually, it was a little bit marketing: you are right if you supply also other coins this is going to lower your tier.Maybe.

2 Likes
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Yes definitely apply it to supply, borrow & mint.

It’s not a fixed reward but rather a multiplier against the base rate. So like you said a percentage increase for holding XVS. On celsius for example:

Bronze: 5-10% CEL gives additional 5% bonus interest (i.e. 1.05 multiplier)
Silver: 10-15% CEL gives additional 10% bonus interest
Gold: 15-20% CEL gives additional 20% bonus interest
Platinum: >20% CEL gives additional 30% bonus interest

I am not proposing these numbers, but give them for an example on what they do. I would propose that we start perhaps with less tiers as we are starting from 0 XVS and we can add additional tiers in the future perhaps.

If the max XVS that can be minted per day is absolutely static and cannot be changed, then we might have to start with the maximum potential XVS rewards assuming everyone was in top tier, and scale backwards. That way we would potentially mint less XVS each day, and we could use that shortfall to extend the reward program or “something else”.

1 Like
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Let’s not try and reinvent the wheel, Comp use the same speed settings just different distribution rates, You can’t simply just propose a change you have to have that ability to make the code changes and also implement them.

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It`s not about reinventing the wheel, we are discussing how to make XVS valuable in long term and avoid the situation when people get XVS as a reward and simply sell it as there is no benifit to hold it on platform.

The idea about getting benifits if you hold some amount (fixed or dynamic) of XVS is super and it will boost the demand for XVS.

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"we are discussing how to make XVS valuable in long term and avoid the situation when people get XVS as a reward and simply sell it as there is no benefit to hold it "

This should be our driving force here, not coding difficulty. No one said it would be easy to get to the moon; it will be even harder to make it to Venus.

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If the proposed XVS reward table is implemented which is heavily skewed towards rewarding XVS holders, do we really need VIP level XVS staking?

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Making it more interesting to stake xvs is i think a very good idea. the more holders staking and the scarcer xvs becomes

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VIP levels will make XVS valuable and desirable for non XVS holders, what is the point to get more XVS from staking if there is no demand for it in the market?

Some people dont have XVS and only borrow/lend other assets and they sell XVS they get as rewards, if we can motivate them to hold and buy more XVS to get benefits then we`ll create strong demand for XVS on market.

1 Like
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Blockquote[quote=“avo, post:10, topic:111, full:true”]
If the proposed XVS reward table is implemented which is heavily skewed towards rewarding XVS holders, do we really need VIP level XVS staking?
[/quote]

A B S O L U T E L Y.
It is the very same difference between jerking off and fucking, :slight_smile: I do not know what you think, but I do prefer the latter.

A real use case must not be self referential but has to be linked to platform’s growth: if I say i give 1000 or 10000 xvs a day to xvs holders if the platfrom grows or shrinks it doesn’t change anything in the distribution happening.

If i say you must stake XVS as a percentage of the value of the DIFFERENT coins that you supplym, if the platform grows you must stake MORE AND MORE xvs.

That said, also “jerking off” is not that bad because protects from the inflation, but youy could achieve almost the same effect just cutting the daily rewards.

Actully I’m going to edit the proposal since now I understand that is almost identical to celsius.network. Those guys are smart ( founder owns 25 patents in his name) they have billions in TVL, their model is really sound. https://support.celsius.network/hc/en-us/articles/360001978497-Can-I-earn-a-higher-reward-rate-if-I-hold-CEL-tokens-

2 Likes
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this is an interesting idea, again very inspiring. It is good because if less people stakes XVS (less demand) you automatically cut the supply. And that’s exactly what you should do. This way inflation is not static and decided top-down but dynamic and decide by the market. However I see an issue in general that we shoul address: xvs is highly illiquid, probably everybody hoards it but even if it seems good this prevents large players to enter the game. We might think that this is going to self adjust at higher prices, but it might be the case that we remain trapped in a low level equilibrium. Paradoxically airdropping half of the xvs to a large public could at the end of the day benefit the coin. Arguably the cryptocard like/Celsius tiers model would subtract even more liquidity so I’m trying to figure out a fee-like variant instead of a cryptocard like variant, so to achieve 3 things together: linkage to growth, dynamic infaltion adjustment, liquidity. Stay tuned.

1 Like
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I just wonder ,should the 233% APY XVS borrowing being addressed in Much Higher Priority before we further building such heavily biased policy to the XVS Holders?

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