XVS Daily Rewards Discussion

Venus Governance Venus - Governance Discussions
#10

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.

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#11

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.

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#12

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”?

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#13

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.

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#14

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

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#15

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.

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#16

Ideally I would prefer some type of “profit” distribution between XVS holders which can be taken from borrow APY.

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#17

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.

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#18

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.

#19

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.

#20

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.

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#21

I think a small % of liquidation fee should/could be given to XVS holders periodically (perhaps it initially gets added to the reserves, and then some of the reserves get paid out to holders)…

#22

@CryptoEllis I’m going to start a discussion thread on this basic multi tier staking Idea, so we can discuss variants. The idea of the double reward pool seems me nice and probably simplifies some calculation, One thing i think it is very important to achieve is expressing the satke as a percentage of the other coin supplied, differently form credit cards we do not have identity verification, so different users could use the same small amount of coins to get privileges on a billion dollar supply. They could build a DAO managed wallet. I think that basing on VIP status one could get discounts also on VAI stability fees, contribution to reserves and every possible fee/cost/income of the platform

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#23

Excellent!

Having thought about it a little more perhaps it is not as difficult as I might have thought. I mean, we already have total balance supplied, total borrowed amount, total vai minted, and I guess by definition we have total value of XVS. The only thing that remains is agreeing on numbers and math!

Regarding discount on VAI fee, don’t we already incentivise that via XVS rewards. The XVS bonus could apply to VAI as well. That said I am not necessarily opposed to a minting discount either.

The Celsius tokenomics and flywheel is very very good - perhaps the best tokenomics of any crytpo I know, so anything that we can take from their approach (and improve) gets my vote.

Thanks for giving this consideration :slight_smile:
CE

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#24

I started another thread, because here we should discuss the excel table. Also a different split of the pools is good.

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#25

Forgot to mention, if you apply fixed % to all assets then you’ll have to recalculate and change protocol every time when you add new asset to it which is not convenient.

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#26

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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#27

For those who have no clue about the APY, here is it:

XVS distribution
XVS distribution1784×460 28.7 KB

One thing I concern is that the XVS distribution weighting of FIL. FIL has a market cap of around 1 billion (#40 on coinmarketcap.com), do we need to consider to lower its weighting further?

We have to focus on other hotter assets like top 10 altcoins by market cap. Altcoins with lower market cap should not be incentivized too much unless we intend to boost them.

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#28

Thank you all for your valuable input, we are going to take it into consideration and share an updated recommendation shortly.

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#29