[Community Vote] Lowering $mine emissions to end downward pressure on value and harm to $mine governance stakers (v2.0)

TLDR; This is v2.0 of a proposal to reduce $mine emissions and redirect these emissions both to $mine governance staker wallets and also to a new Pylon Treasury.

++++++++++

Background on the Proposal:

Over the past week on Apollo DAO there has been an average daily balance of $30m TVL locked in the $mine-$UST LP yielding ~115% APY.

In order to pay-out this APY our community must issue USD $35m worth of $mine token inflation p.a., which translates into ~350m new $mine tokens p.a. assuming $0.10 per token.

In addition, the Pylon protocol is airdropping tokens to $Luna stakers and this is an additional source of inflation.

With a circulating supply of ~600m $mine tokens today, if we had to issue 500m new tokens in the next year, this would be a 83% rate of inflation p.a.

This high rate of inflation for Pylon protocol is misdirected and does little to nothing to add value to $mine stakers who are here to participate in IDOs. Also it can attract ecosystem members who have a farm-and-dump mentality which puts a negative drag on value of $mine token price.

Also, this high rate of inflation is actually disproportionately harming the value for $mine governance stakers, who are unable to participate in the high LP yields on Apollo DAO for fear of unstaking and losing access to their IDO access privileges.

++++++++++

The Proposal:

To fix the misalignment of interests that depresses the $mine token price and harms the core $mine governance staking community, we propose the following resolutions:

  1. The community moves to eliminate 65% of $mine LP rewards and to redirect the sum of 65% of the initial quantity of $mine that was established by the protocol for LP rewards into a new Pylon Treasury***

  2. The community moves to redirect 50% of $Luna staker rewards into a new Pylon Treasury***

  3. The community moves to redirect other 50% of $Luna staker rewards to wallets with a score of 20 or higher on Flipside Crypto Lunatic rating scale

*** Note: Based on community discussions that are unfolding here in Pylon Forum, it seems quite likely that the new Pylon Treasury will be used for purpose of establishing a Treasury Swaps program to buy and hold IDO tokens on behalf of $Mine stakers. Additional community work is necessary to define the mechanism of the Treasury Swaps and to pass a motion to enable the Treasury Swaps concept. For clarity, the present proposal does NOT authorize use of any funds deposited in the new Pylon Treasury for the Treasury Swaps or any other use, and an additional vote of governance shall be required to authorize use of Treasury funds.

++++++++++

History:

This is v2.0 of a proposal originally published on Pylon Forum on Nov 12th and incorporates all community ideas proposed in the community discussion to date.

v1.0 of the proposal & all community discussion is available here: Lowering $mine emissions to end downward pressure on value and harm to $mine governance stakers - #14 by Woody

Community members who contributed to v1.0 or voiced support for v1.0 include: @Woody, @Hogsss, @CryptoPanda, @Stan, @Terion, @bettercio

++++++++++

Process:

We feel that v2.0 is nearing finished form and can attract wide community support.

Before putting v2.0 to community governance vote, we look forward to hearing feedback from the entire community and incorporating it into the proposal. Please share on social media so that everyone has a chance to review the proposal and provide feedback.

Assuming we see wide community support, we intend to put the proposal to community vote by Nov 20th at 12:00 UTC.

6 Likes

Great. Such a community makes me more confident in mine

1 Like

I do agree to an extent though need to look into the amount LP’d outside of apollo etc, having all this done to please the IDO process is incorrect, as i belive in time the Pylon SDK lossless subcriptions will over take all IDOs revenue for Mine stakers, looking at price to early is irrelevent for a long lasting project, that said i do belive lowering the Apy for LP would be ideal though an actual figure to be looked into futher, i also agree on lowering the Luna stakers airdrops though would like more clarity on the other 50%, as going off 12, would only benefit new users, as long term, good lunatics have a score of above 20 so curious on why anyone over 12 reciving non.

1 Like

@Shaun, thanks, some great feedback here.

You are the 2nd community member to suggest a score of 20 or higher should be the threshold for Lunatic rewards - I will edit the proposal now to reflect this feedback!

Re doing this to please IDOs: that’s not our objective in putting this forward, our objective is 100% to serve the interests of loyal $mine stakers. Each of the three motions serves that objective. And you’re right, we didn’t even take into account the $11m sitting in Spectrum LP yielding 80%+ inflation or the 400k $mine being released to Pylon pool participants over next 12 months. Once you take these additional $mine emissions into account, the sell pressure on $mine is even worse and this proposal is even more necessary.

Re your point about Pylon SDK Lossless Subscriptions over taking all IDO revenue for $Mine stakers: This is interesting and it is the first time I’ve heard it suggested. Just for fun let’s run a few numbers.

IDO Profit Opp Per Chad: let’s say the Pylon community makes 50 Treasury Swap investments into new protocols over the next 5 years, and our average ROI across the portfolio is a 5x. Let’s say 10k chads are participating, average deal size is $2m, and avg allocation per chad is $200. So, each chad would have an opportunity to deploy $10k (50 x $200) and would expect an ROI on their $10k deployed of $50k. Probably if we hired a couple of MBAs to hustle and find us more IDOs from across all ecosystems (incl Avalanche, Solana, etc) we could get this up to 100 investments, and ROI of $100k per $20k deployed?

Pylons for Streaming or Mobile Telephone Subscriptions: let’s be bold and assume 20m people are using Pylon for this purpose within 5 years. If each person deposits $2000 UST and Anchor yields stabilize LT at 16% then that’s $320 per year in yield with 20% going to Pylon Swap fees (i.e. $64) and $256 going to the subscription (i.e. $21 per month). 20m users x $64 fees = $1.28 B profit for Pylon. $1.92 B / 10k chads = $128k per chad. ( annual run rate! )

You are correct, sir! I will open my mind to new possibilities (and buy & stake more $mine… but not until we slow down this inflation cancer. :wink:

1 Like

That’s great ,I Support this proposal!

1 Like

As much as it sounds good, i personaly belive to adjust the % suggested to remove from LP, as soley because it is required for liquidity, and as they dont get any airdrops/staking rewards its not ideal to make it irrelevant, to single staking as they both play their own role, so with your suggestion of making it 27%, i belive thats way to low for an LP token this early, i would be inclined to lower it by say 20%, though… even then after a few more IDOs, pools, the single Staking rewards will continue to rise, as its currently 23% APY.

1 Like

Absolutely love the idea of setting up a Pylon Treasury to secure long-term stakers’ interests.

I think it’ll be difficult to modify the % of $Luna staker rewards as it is a gesture to contribute back to the Terra ecosystem.
But perhaps we could keep the originally promised % but extend the distribution period? This way it can help ease off the inflation.

The incentives for $mine LP i think at some point it’s good to start reducing it, and perhaps the timing is now. I love the 20 as well.
Plus with a proper governance and treasury set up now, we can always re-adjust it later on when necessary.

Perhaps we can come up with a few scenario analyses to see how much inflation (from 500m in the next 12 months to ?m in the next 12 months) we can reduce?

1 Like

I support this too.

As for the lunatic rating i have noting to add to which score is better. The tool is news to me. If Shaun says 20 I trust in his judgment.

1 Like

@Shaun: I appreciate your perspective.

To understand your perspective better, is there any argument or rationale as to how maintaining liquidity on the LPs at these high levels early in the project creates value for long-term $mine stakers?

As community members we’ve laid out facts to explain how maintaining high emissions creates egregious harm to long-term $mine stakers, and we’re open-minded to also consider facts about how it creates an advantage, as you’ve suggested, and consider that trade-off?

+++++

FYI, looks like other protocols within Terra are reaching similar insights about damages of emissions:

Once we have a CEX listing, can’t we have access to liquidity with basically zero inflation, as Do also recognizes in the tweet above?

If someone in the community has familiarity with negotiating CEX listings, or works at KuCoin or Binance or Coinbasr, we urgently need a CEX listing for $mine, and it would be great if you could help us with a proposal to the community incl. an ask for resources needed from the Treasury to secure the CEX listing.

+++++

As we discuss this topic of properly aligning interests for the long-term, I think it also important that we have transparency on the current token allocation.

For example, is there a team allocation, and is that currently staked in governance or LP’ing. What I am wondering is if the interests of the team are aligned with the long-term stated goals of the project, or if they are contrary to all investors in the project?

Can we please have transparency about the team allocation and where it sits today? Could you help us with this @Shaun?

If the Team allocation is sitting in the LPs, then i believe we need to add a 4th motion to the proposal that th Team repositions their allocation into governance staking so that the Team’s interests are properly aligned with the future the project.

We can’t get aligned to build this important new Terra Ecosystem Institution if token-holders and team are at odds! Once we agent incentives aligned properly, we can all start cooperating towards the vision!

1 Like

@perfectlegato, your point about being “public spirited” as a $mine community is well said!

We all recognize that we are part of a bigger ecosystem and we want to pay respects to $Lunatics!

That said, we have paid our respects for nearly six months now, the $mine token is struggling badly, the inflation is destroying all of our bags, and thus 50% reduction seemed like a fair compromise.

I’ll be the first to admit, I don’t have a crystal ball in how to optimize this. 50% seemed like a fair compromise where I can be happy both as a $Luna staker and a $Mine staker. Also, remember, we are cutting all of the wasted airdrops to non-chad wallets with the > 20 threshold activated, so I believe the net impact of the proposal is that $Luna stakers are going to get MORE $mine and not less!

Also, I feel like if we don’t stabilize the $mine token price, it won’t even be worth airdropping to $lunatics, it will be worthless.

Some key priorities for the community are to get $mine value stabilized, get transparency around circulating supply, optimize emissions against our project vision, roadmap, and team needs on the ground, then once we get into a positive cycle of value creation maybe we could do special dividends back to $Luna community, or reinstate a higher emission back to $Lunatics once we can afford it?

We can’t afford much tax back to the mother ship when we haven’t yet established self-sufficiency, is another way of putting it,

$0.09 $mine with massive inflation over the next 12 months is looking pretty rough for all of us if we don’t stop the bleeding, let’s survive first, and then thank our mother ship generously!

Does that make sense?

2 Likes

I think so

We can’t be thinking about food donation when we are literally living on McDonald’s ketchup packs

2 Likes

I really like using the Lunatic rating scale. For any real Lunatic, a 20 score should be easy to accomplish, while it’s sufficiently a complex enough set of actions to thwart easy wallet duplication/bots scooping tokens to dump.

1 Like

I do agree on diminishing inflation pressure which eventually causes price drop.

However, in my opinion, the recent price drop is mainly due to the lack of reason why investors need to hold $Mine. To participate in UST pool, investors need to hold only small amount of $Mine which discourages people to invest in $Mine.

So adding to this topic, I suggest to discuss about how $Mine can add buy pressure.
Followings are some of my idea.

  1. APR boost pool
    With more $Mine, the boosted APR on UST pool

  2. Making tier on airdrop
    To be eligible for higher tier, users need to stake certain amount of $Mine (at least $100k value of Mine for top tier) and certain period.

2 Likes

My thoughts as exactly that of Do.Kwon, once there is more Cex listings i agree we can, though until such time, best to not lower it to much though i do agree on lowering it to a degree. As imo, there is no need to have it as a farming token which people dump, though this said, once it is lowered, i expect the price to dump more as it wouldnt be used as they originaly bought them for.

3 Likes

In short, people have obvs bought the token to farm as it has decent APR, once lowered i expect them to most likely dump the token to move onto another token to farm and dump. :pray:

3 Likes

In light of @ed.pylon’s new proposal (Establishing the Pylon Treasury), which offers a more comprehensive solution, we will hold off on putting the present proposal to governance vote.

1 Like

To add to the discussion, I tend to agree that providing LP incentives is very important, especially in the early stages of a project. Like it or not, incentives are a large driver of liquidity; reduce it to far and people will move their money elsewhere reducing price stability.

Rather than redirecting incentives to the treasury, we should use a portion of the treasury to provide LP for MINE-UST and capture some of the emissions. Rewards could be mixed b/w auto-compounding and treasury deposits. It effectively achieves the same goal of redirecting incentives to mine stakers, while building the treasury, owning our own liquidity, and providing price stability

2 Likes