RFC: Retire Harvest Superset

[Tritium]

So far BIPs tend to get posted, commented on, changed based on poll parameters and then pushed to snapshot without incorporating all feedback in the comments.

I would like to try to make this a community run BIP that starts with a Request for Comment (RFC).

The full contents of the BIP is below. I will modify it based on the comments and in 2-4 days submit it as a formal BIP.

BIP-29: Retire Badger Superset
Category: Setts (Harvest Ren Superset to be specific)
Scope: Retiring Sett
Status: RFC

Overview

The Harvest Superset seems to be non-beneficial to everyone involved (see details)
The team is busy and it doesn’t make sense to spend time now to rework this sett.
This proposal suggests that we simply retire the Sett and proposes a way to do it.
We can launch new supersetts later when we have time and/or have available strategists to write/maintain them.

See this Forum Post for an initial conversation that triggered this RFC

Details - The Situation

Harvest seems to have some reporting problems. The APY on their homepage is higher than expected, and harvest vault balance shows less value than badger has in its set. Therefore the sheet below used common sense to try to find answers when possible. Here is a Google Sheet with calculations: https://docs.google.com/spreadsheets/d/1EbVsghTdtbjRSSc5XAYQnc58Z1N18078NqoiDhRQ1j8/edit?usp=sharing
Here are some relevant screenshots:
Situation for Badger

Ecosystem Considerations
These numbers are clearly not 100% correct due to UI issues on either the Badger or the Harvest end (or both).

Looking at the numbers above, 3 things are clear:

1. Both Badger users and the Badger platform are losing money with funds invested in the Ren Supersett vs native Ren sett.

2. The Harvest REN vault is almost entirely made up of the tokens in the Badger Harvest Supersett. This demonstrates that our large holding there has rendered this pool uninteresting for Harvest native users.

3. Harvest could/would (most likely) rather allocate this FARM elsewhere, which provides better marketing value from them, but feel obligated not to completely screw over Badger.

Lastly, the Badger Dev Team is quite busy and it does not make sense to spend time trying to change the SuperSett to find a better APY on RenBTC (the deposited token in the set)

Details - Proposed Solution

The simplest thing to do is to remove withdraw fees and disincentivize this set. Based on basic concepts of efficient markets, users will naturally move over to other setts. We can therefore “decide” where we want the users to go by shifting the badger allocated to the Harvest Supersett to other setts.

As the native tokens are already crv:RenBTC. I would suggest simply shifting the emissions over to the Ren set, which offers slightly better income for everyone involved and less risk exposure from exposure to additional smart contracts/protocols. Before we do this, we should remove the 0.5% withdraw fee on the Harvest SuperSett so users can move(as wish them to) without paying a penalty.

Implementation Details and Timing

It is my understanding that both the emissions allocated to each sett and the withdraw fees are simple parameters that can be changed by the dev team with very little work. @mitche50 can you confirm this?

The original documentation offered rewards multipliers in the form of Geysers for the first 8 weeks of staking. We “owe” our early stakers this advantage and should not make changes before the end of this event. My understanding is that the 8 weeks actually ends on 01-28-2021 so this, as of today is no longer an issue.

I would propose the following time schedule where T = the time this BIP passes snapshot:

T: Set Withdraw fee on Harvest Superset, announce to retirement as widely as possible.
T+1 week: Move 25% of emissions from Harvest Supersett to Ren native sett
T+2 weeks: Move additional 25% of emissions from Harvest to Ren native sett
T+3 weeks: Move additional 25% of emissions from Harvest to Ren native sett
t+4 weeks: Move all remaining emissions from the Harvest to Ren native sett
t+4+ weeks: As dev time permits, disable deposits into this sett and move to an archive page for any remaining users to withdraw.

Polls:

Should we execute this plan:

• Yes
• No

When should we put the plan in action?

• As soon as the BIP passes
• After geysers have been retired and badger boost is in place.
• Something Else (post a comment )

Over what period of time should we move emissions.

• Big bang 1 week after
• Over 2 weeks
• Over 4 weeks [ proposed ]

Do you agree with moving all emissions to the crvREN sett as proposed

• Yes
• No we should balance it between all other sets
• No I have a more complicated idea that I have proposed in the comments.

[Cthulu]

What will happen to the multipliers we have accrued as long term supporters ?? Will we have to start again??

[Devin]

Great write up! I can tell you put a lot of time and thought into it. I think your suggestions make sense and should be implemented. There is too much else going on right now to try to adjust the strategy.

[Tritium]

My understanding is that the multipliers will end in the next week or two anyway as badger-boost comes into effect. We could wait to do this until then if this is important to people.

[Tritium]

Note that I have shared this Forum Post on the Harvest Discord in order to prompt more ecosystem input and get a full view.

Discord - A New Way to Chat with Friends & Communities

[mastermax]

I just want to expand a little on the post as the logic behind point #2-- that the Harvest REN vault is almost entirely made up of the tokens in the Badger Harvest Supersett – wasn’t apparently clear to me:

1. Harvest users don’t have the same incentives as badgers to remain in a pool for a long period of time, which, up until this point, badgers did [geysers] (hence the reason why there are so few deposits thru their platform)
2. Because of the large TVL (about 5000crv-renbtc) thru Badger, Badger users are already capturing nearly all fees in this Sett, thus making entry harder for new users

[Mr_Po]

Thank you for bringing this up and analyzing the situation, you make some really good points.

I believe the Harvest Sett isn’t working out because of how heavily it is overincentivized by our current emission schedule.

For Harvest rewards to constitute a meaningful part of the APY, there needs to be something around 15-30 million locked there, not 169 mil.

So my suggestion would be to decrease the emissions for the Harvest Sett instead of completely retiring it.

Decreasing the emissions for Harvest Sett would mean that renBTC Sett would get slightly higher CRV APY due to liquidity leaving the Harvest pool.

I also think it would be suboptimal to put the freed up rewards into the RenBTC Sett or other Curve BTC Setts, as they don’t offer cost-efficient investments for our treasury revenue at this point.

[Mr_Po]

Also, I don’t think that canceling withdrawal fees is a good idea.

When you enter a pool you enter it knowing that you’ll be charged 0.5% withdrawal fee and you agree to that. You also know that the emission schedule can change based on BadgerDAO decisions.

90%+ of the funds that currently are in the pool have made much more than that fee in our emissions.
It woudn’t be a large sum for people who leave, but it would be a large hit for our treasury - not getting these fees. It would mean that we’ve been sponsoring the pool for two months and get almost nothing out of it.

[Tritium]

So to understand, you’re proposing we cut emissions about 75-80% in this sett and leave the other 20% there for a small harvest posistion. Maybe I’ll go talk to Bread over at harvest and see if they have a target AUM from badger that would work well for them. This is a good idea.

In terms of withdraw fees. I generally agree, but in this case Badger has not done well by users.

1. We still haven’t paid out any FARM
2. The new UI did not make it clear that the harvest supersett was harvest and a lot of users accidentally deposited into it instead of the REN set.

I think it’s good to make arguments on both sides, but leave a potential fee holiday in place to allow people to move as we cut emissions from the sett.

Assuming 80% of the AUM in this sett moves out during the fee holiday, the total cost to the protocol will be about 4900*.8*0.005 = 20 crvRenBTC tokens. This is considerable money and we should consider it in both directions. In my opinion it feels more fair to users if we offer a break from the fees if we are also changing the emissions plan for a specific sett. Maybe we should provide a proposal to offer a keep the fees, offer a full fee holiday for a week or two, or offer a 50% reduction in fees for that week or two (so 0.25%)

I’m think everyone is enjoying the high APY badger offers right now and feels like we have voted and agreed on a good long term emissions plan over the next 22 weeks. The AUM leaving the harvest sett will want to move somewhere else on badger, and it would be nice if that didn’t tank APY’s for everyone. Maybe this BIP needs to be a bit more complicated and we can take a little time today to hash it out, but I think we should provide the community with options as to what to do with the freed up emisisons.

1: To Ren (in the end the harvest money is in ren anyway)
2: Balanced between the other setts according to a good economic plan (maybe you could propose one)
3: Just cut them and save the badger for something later and/or the a future new Sett.

[Mr_Po]

So to understand, you’re proposing we cut emissions about 75-80% in this sett and leave the other 20% there for a small harvest posiston.

It’s too early for me to propose anything specific.

We currently issue 2x the emissions to renBTC pool, and that also might be something to reconsider.
So another option would be to halve both renBTC emissions and Harvest emissions.
This would bring the underlying CRV APY up, and thus Harvest potentially could issue more FARM too, and it all would make more sense overall.