With BIP-24, we are moving away from a Geyser and loose any kind of an incentive for long term HODLers of badger.
People staked in the Curve(bitcoin only) setts that hold 100% bitcoin will get multipliers on those emissions for holding bBADGER, bDIGG or LP tokens holding them.
I am considering putting together a BIP that would offer rewards for timelocking LP posistions.
So imagine you could lock sushi/uni tokens and mint an NFT or other token that could only be redeemed after 6 months. As a result, you would get a multiplier (2-3-4x on your emissions for LP, as well as potentially additional multiplier for curve pool (non-native) staking.
Would you time-lock Badger or Digg LP?
This poll is does not show who voted so maybe people can maybe be honest, I want to figure out if this is worth doing. It would be helpful to get an idea of how much potential interest there is in locking. You do not have to vote if you are not comfortable with these questions.
About how much in USD value would you consider locking into BADGER LP for 6 months?
more than 1 Million
About how much in USD value would you consider locking into DIGG LP for 6 months?
I very much want something like this. I understand the reason for removing the multipliers but still want to see some sort of reward for people that would choose to stay in the pools for a set amount of time. I think the NFT idea is a good way to do it.
What would be the specifics of the time lengths?
Would there be more than one with higher rewards for longer duration?
Would the NFT’s be transferrable to someone else?
Would you receive the NFT upfront when you lock so you could redeem whenever you want?
I think this would be a great way to keep liquidity locked in our ecosystem, but making it opt-in would give people some different options on how to go about increasing their yield.
I think the idea is to ensure money stays in the LP, so once the NFT was minted it could not be redeemed until 6 months was up.
In terms of transferability. I don’t know, what do you think. If I developed a BIP I’d work with @jonto and @Mr_Po to think about the economics of that.
I had proposed 6 months to start because @Spadaboom had mentioned it in BIP-24 and he is a wise Honey Badger and it is a good place to start. We can adjust later.
We may also want to think about giving the DAO the right to vote to break the time-lock early if the boost is messing up the economics of the system. So people get no, or less boost, but can redeem early if they want. Do you have any thoughts about how this should work?
Ideally, if we’d like to introduce time locking LP tokens, it’s usually better to provide an option to lock tokens for longer periods. For instance, Curve has 4 years for 2.5x boost.
Usually, it means that there needs to be a set emission schedule that covers those large time frames.
However, the way the emissions have been structured so far is not quite compatible with it. The shorter time frame governance votes decide them. And if we don’t adjust the governance system, it also means that the ones who locked the tokens might end up in a disadvantageous position. Again, in Curve you get more voting power with the longer lock.
The dual token emission schedule further complicates things.
Long locks overall are better for more stale systems, and with Badger, everything changes every week due to active development.
So there might be a need to set strict rules, but strict rules limit our flexibility moving forward.
And we also have to balance this out with all the other products we plan to develop, which is pretty hard when people have no option to move their liquidity from one place to another.
Like, it makes sense to incentivize using LP tokens as collateral once it’s available, as it makes people lock their liquidity in a productive way.
Without the locks, people could simply move and enjoy the incentives. With the locks, they’ll feel stuck.
So we would end up with a fight between two groups of LPs.
When we try to optimize one thing with two different approaches simultaneously, it creates multiple new issues.
I wouldn’t say that these are unsolvable issues, but I think it’s better to think of them beforehand and adjust the initial design rather than having to dance around the consequences later on.
When I think of something like this, I think of it in terms of earning multiplier interest +x%/day vs. locking up with no withdrawal. What is the benefit of a pure lockup? It seems like it could really impact things as lockups expire and people dump.
Having a way to end it early would be good imo if some unforseen consequences arose.
If it’s not transferrable then it will be fairly simple, boost would just apply to the amount thats locked for that time period I presume?
For transferability would the boost apply to the amount they locked for some specified time going forward? Maybe it could be optional? Seems like it would introduce a lot more complexity. But it would be cool if it could be done because you could hold on to your boost to use when prices were higher - or sell to speculators. This could open a whole can of worms though since lots of people may use them when prices go up.
Since BIP 24 introduces 100% reinvestment of rewards doesn’t that already incentivize long term stakers?
Do we really need to risk upsetting the carefully thought out rewards mechanism by introducing this time lock just solely because we want to further incentivize long term stakers. i believe there are better ways.
The thing with time lock is that it is not really a true longterm staking motivator, if you say 6 months that means at the end of the 6 months people will still pull their liquidity. If you put a longer time frame say > 1 year majority will not be kin to risk locking up their assets for such a length of time especially considering how fast things move in this space unless the rewards are really going to be worth it and for that to happen we’ll have to model out a new rewards structure that will favour them, which IMO is not worth it.
I’ll rather opt for a simple but very effective approach to achieving long terminism, one of such ways is simply create the ability to borrow against lp positions, this will achieve what the proposed time lock will but without introducing too much complexities in the ecosystem that might introduce unforeseen problems. it will also encourage stickiness in a healthier manner.
Curve has been around for years and can think 3-4 years in the future. Badger has been around for 6 or 7 weeks. I think 6 months in the future is far enough for us. If you think this is a problem we could even start by just offering an 8 week lock to go with the current emissions period. In the end I think 3-6 months seems like a good start. It gives us the ability to learn and adapt and grow. Once we’re a bit older and can see/predict the future a bit better, perhaps we extend the length on our time-locks.
In my mind, there would be nothing better than a situation where we had a “cadre” of long-term LP’s that maintained a sufficient block of badger to keep their time-lock. In the very worst case, Badger would someday become a platform primarily focused on people who want to deposit their money long term, but this is also a good thing IMO.
As I said in another post, if possible, at the beginning, the DAO could/should maintain the rights to break the time-lock by allowing people to withdraw early and no longer paying the boost (in case it messes up our tokenomics).
There could be. We can vote on that too. HODLing these tokens has slightly less value for the platform than providing LP. I’m very open to both, I just think our LP positions are on the top of the list to timelock.
1: Maybe I’m missing your question. The advantage to locking your badger is more APY on your LP posistion, + potentially needing to hold less Badger to get the same multiplier on your non-native positions.
2: We don’t want everyone to buy a 6 month lock on day 1. That’s true. 2 ideas.
1: Allow users to set a variable time lock from 3 months to a year where the multiplier is proportional to lock time somehow.
2: Only allow a given percentage of the total LP position to be locked, after that, disallow locking until the ratio is back in balance.
3: Only allow a much smaller percent of the total LP posistion to expire on any given day(or week). Disallow when this ratio is out of balance.
4: Allow a small multiplier bonus for re-locking after 6 months (+0.25x to extend 6 months for example)
Did this answer your questions? You have any ideas on how to avoid a potential “seller cliff?”
In my mind what the DAO gets for this is security in deposits. We kind of break that if you can end early. I would almost argue the other way around, that the tokens should be transferable, so you can always sell your time-locked tokens to someone else at a discount on OTC (or an AMM if available) if you need to get out early.
My thought was to have the boost apply to at least the APY of the actual tokens locked, and maybe think about also having some effect on Badger Boost Multipliers to the non-native setts, but open to ideas/thoughts.
I think the economics/game theory of detaching the boosting-rights from the locking period is too complicated for now and will likely get us in trouble, but it would be a cool thing to play with in the future.
Auto-compounding isn’t really a bonus for long-term stakers. It’s a bonus for everyone. It helps small players the most because they were the ones spending the most (% wise) on gas to do this themselves.
I have no desire to break some carefully laid plan, but I think long-term thinking is something that is very much missing in DeFi, and we have a lot of it here. We should encourage it. I spoke a lot about this in my comments in BIP-24, but a lot of this is about creating the right culture.
People who lock badger for 6 months are more likely to stay involved in the community. They’re more likely to tell their friends about Badger and to promote the project. They’re more likely to write BIPs, and participate in the forums. And if they are doing all those things, when their 6 months come up, they’re more likely to lock again.
Investing overt the last 20 years has become horribly short-termist. Stocks are held for seconds not years, and most people pay very little attention to what is actually going on in the companies/DAO’s/tokens they invest in. I believe this is one of the biggest problems with today’s system. Building a strong community of die-hard believers from the start, who are invested with not just their money, but also their hearts and minds will likely end up being the best moat Badger has.
We have done such a good job of building this so far, I just think it would be a shame not to keep going.
I agree that debt is also a great economic lock-in tool, but I don’t think it has the same psychological effect, perhaps just the opposite, one of being stuck not enthralled.
Ahh I think I understand your first question now:
I think the main issue here is that the Geyser already does an increasing mx with time, but it’s difficult to do it in a compostable way that’s easy to look into/report on the dashboard, and the dev team is trying to reduce complexity and move forward. A lock with an upfront time commitment is something very easy to tokenise, view, think about and work with. No more trying to calculate every deposit/withdraw everyone has ever made to determine a Geyser MX. Just x tokens locked till y date for z multiplier.
There are lots of solutions that are more complicated and perhaps cool, better. This solution sought to be easy, and to be a way to keep long-termism as part of our protocol/culture until we figured out what to do next.
Overall I don’t mind introducing moderate incentives for locking up LPs.
More than anything, they could serve well for DIGG price stabilization Setts - and could allow for new Setts to emerge that wouldn’t be viable without the goldy locks.
But DeFi is a lot about capital efficiency, and I generally prefer having AND choices over OR choices.
So if the question is
“Would you prefer to:
a) time-lock your LP
b) time-lock your LP AND also to be able to use 25% of the value that you lock”
The choice is evident, right? If b) is possible it would ‘eat’ a).
But if we move towards b), then introducing a) first would mean that people don’t really lock their tokens for the set period by design - or they’re stuck with their locks when a better option is available.
That’s why I would prioritize developing the collateralization options and then see where we can go from there in terms of locking options.