BIP 64: NFT Multipler for Badger Boost

[jonto]

Overview

The BadgerDAO team and community have always been interested in exploring the overlap of NFTs and DeFi. There have been numerous events and drops that have resulted in the community accumulating NFTs but up until now they havent been of much use. In this proposal i have laid out a model for including NFT holdings in Badger Boost with a couple parameters that will be, if enabled, under the control of BADGER holders going forward.

Extensive discussion around the model was had here: https://discord.gg/6ZaTa3Hh

Details

Each address will get a multiplier applied to their Badger Balance based on the NFTs held. Badger Balance is the numerator in the stake ratio that drives the each address’s badger boost.

Current StakeRatio = [Native Balance] / [Non-Native Balance]

New StakeRatio = ([Native Balance] * (1 + [NFT Multiplier])) / [Non-Native Balance] *
*Not including Max Mative Boost limit

Example

You can see an in-practice example of the proposed scoring method for the Badger NFTs in the sheet below.

Badger NFT Power-Up Scoring

Specific NFT weights are based off of whether or not Badger receives a portion of the transaction fees for the NFT and its rarity.

This formula was created to get what felt like appropriate scoring to start. The Partner/Collab/Badger inputs can always be tweaked.

All addresses are then given a total score which drives the multiplier

[NFT Multiplier] = ([Address Score] / [Total Possible Score]) * [Max Multiplier]

Max Native Boost

The major concern around the addition of the NFTs as a multiplier was around larger holders effectively diluting the BADGER supply by using NFTs to lever up. To address this concern I am also proposing a “Max Native Boost” parameter that will put a cap on how much any one address can add to their total Native balance by holding NFTs.

This will make the below the final formula for stakeratio:
([Native Balance] + min([Max Native Boost], [Native Balance] * [NFT Multiplier])) / [Non-Native Balance]

Looking Forward

This is just the initial model to get NFTs included. There is a more ambitious structure being worked on that will scale better with more NFTs and create a more gamified experience for users. This also leaves a lot of flexibility to do things like NFT of the week or month that gets some extra weight if the community wants to. Please reach out with any and all ideas on how to enhance the model.

Please also review BIP 63 and take into account its effects when placing your vote.

Governance

The inclusion question will be a normal snapshot vote. For max boost we will be using the results of the BIP vote to drive a ranked choice vote. The for the multiplier and max vote I will be trying a new method for vote-determined parameters.

• The widest range between any selections that gets >25% of the vote (or the top 3 if nothing breaches 25) in the BIP will be included in a snapshot ranked choice vote with 5-10 evenly distributed options.
  • Ex → 50% and 150% multiplier both get 26% then options between 50-150 make it into the ranked choice snapshot.
• If the bottom or top range is gets more than 30% of the vote I will extend the options beyond.
• Anything getting a simple majority vote will be included as a parameter in the inclusion yes/no snapshot and will not have its own vote

Include NFT holdings in Badger Boost

• Yes
• No

Max Multiplier

• 25%
• 50%
• 100%
• 150%
• 200%
• 300%

Max Native Boost

• $100,000
• $200,000
• $500,000
• $1,000,000
• $2,000,000
• $5,000,000

[cryptomooniac]

I didn’t know there was a discussion going on around this topic in the discord. I would have participated. Was there an announcement and I missed it somehow?

I am aware that it has always been a “promise” by spadaboom and the DAO to have boosting NFTs so it is clear to me that we need to hold to that promise. We cannot just ignore it.

I never liked that those promises were thrown in the air without any knowledge or indication about how this might actually work. Without any model that should have been done before even promising such things. But it is what it is.

I went through the model and makes sense to me. I just think that we need to be conservative in the amount of native boost and multiplier that the NFTs do provide, at least at the beginning. So I voted for the most conservative numbers. Clearly I am the minority though.

[Mr_Po]

In my opinion, bringing too much power to NFTs disproportionally rewards early adopters at the expense of the newcomers, small depositors who don’t own NFTs, and, most importantly, the token holders themselves.

I’ve voiced my concerns about the multiplier model as opposed to the cumulative model for NFTs, but the multiplier model could be relatively harmless if the multiplier is low.

In the Discord channel, I questioned adding the 200% vote, as I consider it utterly broken, and here we are with 300% in the lead

The fact that you can buy an NFT for 1$k or 4$k and it can be worth 2 $Million in the Badger Boost calculation simply breaks things in my opinion, it dilutes the Boost and devalues the tokens.
It means that for every such utilized NFT there is 2 $Million less value of Badger and DIGG in the Boost.
This in turn means less demand for the tokens - as that demand goes to NFTs instead and “cheats” the system at a 99% discount.

The only way not to break things at all in my opinion is to assign $ value and not multipliers to NFTs, which would allow making the dilution not exponential.

But if things get broken, it’s better if they’re broken a little and not a lot, so I’m also voting for the most conservative numbers.

[jonto]

I must say im a bit surprised to see the support for 300% as a well.

a couple things to clarify though. The Max native boost parameter essentially puts a price ceiling (at least wrt to boost value) for the full collection of NFTs. No one NFT will be worth anywhere close to 2million.

It is right though that at a max native boost of $2m would put the max value of a jersey NFT at around $400k which is quite high. To get that though the address would still need to be holding at least $670k or 1m in badger (in the 3005/200% multiplier respectively).

If 25% can get a 25% share of the vote then itll be a very wide ranked choice vote in the snapshot to determine the final #.

not even half way to quorum yet though so should be interesting

[SexyBadger]

How will this system treat if someone has more than 1 of a type of NFT?

Why is the max boost limited at 2 places

1. max multiplier
2. max native boost?

Just leave it at max multiplier and stop punishing people with bigger amounts. This is not comunism, people with greater capital at risk should get proportional reward not limited… You are shooting your TVL in the foot that way which then affects every badger holder since the value accrual to the token (once that is turned on) will be smaller if you push the whales away with comunistic limitations.

Also above there was a comment that this will benefit early adopter. OF COURSE early adopters should be benefited, they are the ones that took greater risk so their reward should be greater.

[jonto]

Only 1 of each NFT will be counted. Holding 2 of the same NFT brings no added benefit.

In the weeklong discussion in the discord there was strong support for limiting the amount of “dilution” any one address could create through holding NFTs which is where the max native boost parameter came from.

[SexyBadger]

Of course there will be strong support, it’s only natural people with smaller capital to be more.
That’s why you should only account for the badger tokens that vote not the amount of people…

[bajja]

Been waiting on NFT boost since December 2020

[diggster]

I side with being conservative at the beginning and perhaps a sliding scale could be included where we start with low values and then after some testing higher values can be brought on depending on the behavior seen in the start when low values are used for the NFTs.

On the other hand, I do believe early adopters should be very much rewarded. There’s been many people who’ve stuck with Digg through thick and thin and have risked their capital (either by purchasing NFTs , governance tokens) betting on the DAO’s success and trajectory to bring btc to defi.