EDIT: Thank you all for your valuable input. Please check the NEW THREAD with the updated parameters.
Hi guys,
Now that VIP-4 has been submitted, we’ve started looking into updating the daily XVS rewards breakdown with a model that favors XVS holders.
To kick off the discussion, have a look at the below breakdown that DekaAnra put together. We can use this as a ‘guide’ / starting point, and will take into consideration your feedback and thoughts before submitting this.
I love those numbers on the supply side, a big incentive to supply XVS! I would change the borrowing so Binance backed coins have no incentive to be borrowed or shorted.
Stable borrowing shoots up to remain extremely lucrative and the rest adjusts based on supply. I know the team is discussing.
MAYBE I’M NOT UNDERSTANDING THE TABLE; please add some rationale. Please note that I’m absolutely for giving more value to XVS holders.
, distribution of xvs to people other that xvs owners is an INVESTMENT which is mandatory in the competitive defi landscape. 40% of a coin which is worth nothing is nothing. Venus achieved good (but not exponential) growth thanks to the generous distribution, which was barely enough to drive those numbers. 40% implies a big cut on growth rate, if any. we could easily collapse after this move! Please note that even you can think in terms of price what you are really giving is a percentage of the total coins, that is latecomers are not penalized in building a stake in the platform.
EVEN MORE IMPORTANT Second point: this table presents a rigid split between different assets, so we have 9% for bitcoin and the same for eth? But BTC is much larger! should we guess the possible demnad periodically? for the growth of the platform all coins are equal, what is important is their dollar value and as we presently do all coins should fish proportionally from the same pool.
I admit I liked the numbers better before the “update based on feedback” of the table.
But still, @Bewareoflogicjumps has a point here.
giving 40% of xvs to people who already have XVS reduces the exposure of XVS to a lot of users, specially new ones. The question in my mind is: Is modifying the distribution rates the way to go to incentivize XVS holding? The current rates seem good enough for me…
Wouldn’t it be better if we had something like “having XVS improves your APY on the coin you deposited, or maybe gives you better rates for lending or collateral”?
I agree. I actually prefer the current way of distributing the rewards evenly based on $ supply.
However, what we should do is look closely at the Celsius model but it would be complicated I know. The more XVS you hold, the higher your rewards.
The celsius model is based on what percentage of your portfolio is in Cel token. We might not be able to do this immediately but we could certainly split the reward into groups and pay out bonus percentages if people hold/stake a certain amount of XVS token.
For example for each coin, the reward is paid 70% to all users, an additional 20% split between holders of 100 XVS, an additional 10% split between holders of 1000 XVS. These are made up numbers and can be adjusted as necessary.
This way we don’t have to give the massive 40% bonus just to XVS pool and encourages us to want to buy more XVS and this in turn will drive up the price and so on.
this idea does have merit in that uses a multitier stake mechanism (like crypto credit cards) it works and especially forces farmers to hold and not just sell XVS. Improving on that idea we could think to link the stake to the amount of coin supplied this would boil out to be a sort of proportional fee (“paid” in holding xvs) say that in order to get a special 30% extra reward you must hold one dollar in xvs on 100 dollar in supplied /borrowed amount ( for half dollar a 15% boost) What you think? @CryptoEllis
I think we shouldn’t fix % of xvs for every asset except for xvs. For example 9% of xvs will be distributed between btc providers who added 140M to protocol and same 9% between Eth providers who added 58M, Eth lenders will recieve 3 times more reward providing 3 times less liqudity, so we can get less liqudity if people will run into low caps with less money to get same xvs. In my opinion we need to fix XVS rewards on 5-10% daily rewards (right now it’s about 0.6% and will decrease with TVL grow) and leave other rewards as they are, the more value you provide regardless the asset the more rewards you get.
I agree with you @Elgatofurioso that the real way to valorize XVS is to link it to the growth of the platform, not sure “stealing” from borrow APY is the best solution. I saw in the chat that @Dekaanra proposed to take from the VAI stability fees, this could be a better option. For example. But also the “multi tier card model” is nice.
I agree with you @Bewareoflogicjumps , it can be any suitable source of rewards, it’s good when xvs holders get % of “income” which platform generates and it will motivate new uses to buy and hold xvs instead of simply lend BTC and get XVS rewards to sell. As for vai fees which will be 10%, right now 40M vai minted, so we get 4M $ of rewards as fees annually, if we split 10% of them (400k$) between XVS (24M$ now) then it’s only 16$ per 1000$ in XVS, which is 1.6%, maybe it’s not enough. If we speak about 30-40% then it can be interesting, it all depends on the amount of vai minted which unfortunately has no use case for now.
Yep this also works just fine. Maybe we start really basic and build on it in the future. for example 80/20 split. 80% of XVS rewards to all suppliers regardless, and the remaining 20% of rewards to the same suppliers that hold a set % of their portfolio in XVS token. None of these numbers are set in stone if they appear too high, and as we continue to grow we can add additional tiers.
The reason I started out suggesting a static number of XVS to qualify for the bonus is because it is probably very resource intensive to calculate every block what the payout reward could be, especially when token prices fluctuate. Maybe the bonus could be paid less frequently to resolve this… also any static number can always be adjusted as the total supply of XVS increases.
I suggest to make fixed amount of daily xvs rewards for xvs holders only (but not huge amounts like 40%, 5-10% is 10-20 times more than now and more than enough) and leave other rewards as is. Plus add some process to share part of rewards which generated by all protocol users to xvs holders, should not be super high as well, 5% annualy in addition to fixed xvs rewards is good.
