Additional WRT Reward for Long-term Stakers/Farmers

[richard.cgb]

There appears to be a fundamental supply/demand issue for the WRT token. While high rewards are desirable, they should not devalue the WRT token by increasing supply. Balancing these two objectives seems nearly impossible.

My Proposal:

• Maintain existing reward levels.
• Additional bonuses for those who do not withdraw their WRT frequently
• I suggest a linear boost schedule based on holding time:
  1 month 10% increase
  2 months 20% increase
  3 months 30% increase…
  10 months: 100% maximum increase (potentially)

While this approach might increase WRT emissions, it could potentially reduce the token selling pressure, especially in bear market conditions.

Encourages farmers to reconsider selling their rewards immediately.

This would accelerate the distribution of all WRT tokens. However, the upcoming years are crucial for the survival and prosperity of the WingRiders ecosystem, making this a necessary strategy.

[krebsmenschen]

At the first glance - I would suggest, changing the 1 month - 10% increase etc. into something epoch focused, like

Every 5 epochs, 10% increase, until 100% is reached.

I will think a little more about it, when I got the time, but at first sight, it seems like a good idea in general

[richard.cgb]

Yeah per epoch makes more sense, the percentages are also up for debate.

[ilkka]

good one! thanks for opening the discussion. I could see this becoming a DAO vote if we can first discuss and hash things out a bit. I like the idea of simply rewarding longer term deposits via timed lock-in options. It’s something we’ve discussed in the past too but have not gone all the way to DAO Proposal yet.

So I’ve seen similar solutions implemented elsewhere, and it would make sense to follow suit. It can’t hurt to have this option available, especially for those that are looking for longer term deposits anyway, and for those on the fence.

So we already got the boosting vault in place and the first thought would be to upgrade the vault to have this type of functionality. It would be up to the dev team to say if it’s possible to implement timed lock-in options for the vault, timelines and workload estimations.

Personally I agree with rewarding longer lock-ins but not sure about the exact incremental increases proposed here. that’s probably a good one to discuss further here in comments! what does everyone think of the proposed % increases? what would be a good fit here? would it make sense to have less options or more? or maybe even a slider option? Again, it will also depend on what the technical implementation would look like and what’s possible.

I hope to see some comments here later, this one has potential being fairly straight forward to understand. It’s more about discussing the specifics and possibly getting a comment from dev team later on potential implementation of something like this! Thanks again!

[richard.cgb]

To clarify, I didn’t intend tokens to be locked. I would rather see all tokens be held in personal wallets. But you can still give increased rewards for people withdrawing rewards less frequently.

[krebsmenschen]

Some points should be important (IMO):

1. maintaining the existing reward levels (as in the proposal)
2. it’s a passive bonus (no active action required, except NOT to harvest)
3. the bonus increase resets the moment even one WRT is harvested, restarting the compounding bonus

Hence, my version (and I think, its near/or the same vision from @richard.cgb) of it would be something like:

Nothing of the current system has to be changed. You can freely harvest at any time and get all the bonuses, you are currently getting.

But, on top of the current rewards, there would be a bonus factor, that increases the longer you do not harvest your rewards (based on the epochs, you did not harvest in a row (like a kill strike )).

This bonus value could be linear, or curved (in both direction (log or exp) depending on the strategies we want:

log: we value the first holding epochs more than the later → incentivizing earlier resulting in more holdings, but may get shorter average holding times

exp: we value the later epochs more than the earlier → incentivizing LONG holdings, but may lose people on the scheme at all (but these would be people, who most likely are not interested in holding anyway). This would make it way more hurtful to harvest at all, as the bonus factor would reset for the harvest and you have to wait again for the sweet exp increased factor → hence, even if full factor is reached, people would still hassle to harvest more than on the other approaches

linear: we keep a balance between the above and at the same time keeping it simple to understand (simplicity is important and WRTs money schemes are already quite complex with vault and max eligible values and so on)

As mentioned by @richard.cgb this method does not need a lock, as the greed of the user is the lock itself, making and keeping it flexible while also having a high amount of holders, that just will only harvest, if they truly need to (but they still could) → no lock period should be a core principle I think in this (you dont need locks, if you design a good system and you will always have a better user exp against locked solutions)

This scheme has should have the desired effect, of getting people to hold on their harvest rewards for as long as possible, while still not destroying the current system and ensuring the same advantages WR provides with the no lock harvest approach.

But I also have some cons in mind, but I have to think a little bit more about them (and this comment gets to long)

[krebsmenschen]

Ok, my cons (these are just things I see, may speak against the proposal, not that I think, we should not have it - but we may should look at this stuff):

First: The cost/value proposition

This proposal of course has a cost. In this case, the extra rewards would most likely come with an increase in the treasury depletion, which shortens the runtime of the project, when no new income streams are successfully launched to counter the token drain. Hence, in a sence, we are taking away future rewards for current rewards. Hence, it should be discussed, if the value outhwights this cost of shorten runtime.

Hence, if we shorten the secured runtime of the project for this proposal, this proposal should in return increase the propability to get the needed alterantive income, or it would literaly “kill” the project by removing funds. So, does the proposal have the ability to increase the money income of the project?

The idea seems to be, that the proposal would firstly stop WRT price bleeding by rapid reward selling, taking away selling pressure and increasing the price. Price increase of a DEX token should in return attract people to the project, including the new pull of the new reward scheme, in a sense, its a paid marketing scheme, which seem even more necessary, considering the highly copetitive environment the cardano DEXes found themselves in (cardano has a lot of DEXes for their trading volume). The result (if successfull) would be more WRT holders, that are incentiviced to hold their rewards longer.

Overall, I think, the proposal can fit the cost/value proposition, but Im interested in other thoughts too, and also, I dont know any real numbers of the costs yet (percentages are to be set and max rewards allocations etc.).

Second: Standing against alternatives

The main goal of the proposal would be, to increase the WRT value and the WR platform (if not, the proposal should be dismissed anyway ). Hence, it has to stand against other potential ideas, that could solve the given problem too. Implementing the scheme would not only shorten the secured runtime of the project (increasing WRT inflation) but would also take Dev time (I think, not this much, but Im not an WR-Developer). Hence, if there are better proposals, these should be discussed → but this goeas for every idea ever, so its more of a reminder.

Maybe someone reading this, has better ideas, so we should not consider this one (I have currently none, except of course, improvments of the platform itself, e.g., ZapIns, Multiswaps, V2/3, Speed/Cost improvements … and so on. But all of these, should be on the normal roadmap and not DAO proposals).

Third: Fitting within the current WRT use-cases

This one is a little tricky, but I will give an example of a current problem of WRT focused interest in the platform.

What would be more valuable for a WRT token holder (give more rewards):

Providing WRT in the liquidity pool or locking it up in the vault?

Of course, this answer could be mathematecally shown and its most likely a balancing point with some as liquidity and other to get the bonus (but maybe not the max bonus).

But it shows, that there is a fight for the utility value of WRT already within the platform, which makes the decision process dificult. Now, we would add another value utility of WRT tokens to the mix, with:

Would it be more rewarding to get the new bonus factor, or should I harvest and add them to the vault?

Again, this would be solvable (mathematically) but who wants to do this hard math, everytime and again, the systems should be complimentary and not necessarly fighting with each other. Hence, we should disucss solutions to the problems, e.g., could it be possible, to provide holded rewards as if they where in the vault?

Or could we harvest into the vault without reseting the factor, BUT if we THEN take out tokens from the vault, the bonus factor resets? → or would this be to complex?

I think, this is worth a discussion?

Fourth: Voting Value of non harvested rewards

It fits in the third point, as not harvested WRT is not mentioned in my voting power (or am I wrong here?). Hence, not harvesting the WRT would reduce my potential voting power (the vault does not), hence, if we want people to hold the WRT without harvesting, then we may have to add them to the voting value too?

Fifth: Overcomplexity for a simple solution problem

Maybe, there are easier ways, to keep people from selling their token. The core focus is not, to have them not harvest, but to have them NOT SELL the token. So, maybe, just increasing the bonus from the vault, would have the same effect.

But this comes down a lot to point two → is there maybe a better, simpler, more cost-effective alternative?

Soo - this was a really long one, but I have no more cons to list. Again, these do not mean, that I dislike the idea and even would not vote for it. But I think, us discussing this potential problems would be really helpfull?

Cheers all

[krebsmenschen]

As a side-note to my con list:

There should be a thought about the kind of value adition to the WRT token. I see two kind of value propositions:

1. Value additions by giving the ability to make more WRT
2. Value additions by giving non WRT-related value (voting, Ada rewards) etc.

The case 1 has an obv. problem, as the value of such WRT utilities is to literaly sell it, or use the value propositions of the second kind (voting, ada rewards etc.).

Hence, the more important of the two should be of the second kind, but this proposal is of the first one.

Hence, in the long run, this proposal will give people more reason to eventually sell their token, its only a temporary “fix”, as we give them the promise to instead of selling now, to sell even more in the future

Hence, while I still like the proposal, I would rather see it stand against things of the second kind, namely for example, Ada reward sharing and most important, I would like to the a WRT buyback introduced, to ensure a long standing value of the token.

So we can have a circular value flow - with the buyback, every value 1 proposition will automatically become of poposition type 2 by proxy. So, IMO the platform should start to look and implement a BUYBACK system, and start the mechanismn (first with low amount, which go up invers to the token vesting) and we get a smooth income stream change for the project (hopefully).

[richard.cgb]

I think a buyback program is necessary. But if we don’t have trading volume, buyback is not meaningful.
About complexity, i think less is better.
IMHO boosting vault isn’t really necessesary. You should get all these perks simple by providing liquidity or staking. And the yeild for liquidity providers should be automatically staked and get boost from not withdrawing. I’d like to even se LP token being held in personal wallets and still get all benefits, thats the cardano way.

[krebsmenschen]

I second, that the MOST IMPORTANT thing is to improve trading volume, but this is also a cardano thing in general.

I guess, it could be just too expensive to constantly check all Wallets for LP tokens and WRTs so you have to deposit.

[schopenhaeur]

Yes, it should be based on deposits.

[societyperl]

Great proposal. Fully support it.

[ilkka]

Hi all! some great discussion so far. seems to me this is of some interest for the DAO so let me try to sum up where we’re at and what would need to be finalised for any potential DAO Proposals around something like this.

• Exact proposed increases, what’s reasonable here and what’s possible to implement
• to me it would also make sense to leave some room to implement adjustments and changes, based on dev team input since they’d have the best insight into not only the technical implementation but also things like emission calculations, etc.
• the risk here is upsetting the current “balance” and making sure any adjustments due to locked-in WRT bonus payments would be warranted.

so in short, at this point if we could get some dev input on this conversation it would be great. let me try @techrider, when you have a moment. This proposal is suggesting a lock-in mechanism to be implemented into the WRT vault to incentive longer term deposits. obviously a lot of things to consider here.

[techrider]

Dear Riders,

Thank you for a great discussion and valuable contributions!

You’ve proposed some interesting ideas so let’s provide some feedback:

• Technically, the idea is feasible. Our suggestion would be to adjust the mechanics and maths of WRT Boosting Vault, to incentivize the long-term holders (those who do not harvest to the wallet) based on the agreed parameters. We would not go by implementing any new feature on top of the Yield Farming and Boosting, as introducing an additional layer would negatively impact the UX.

• With respect to the “bonus” incentives that would apply to long-term holders, special care should be taken to balance the sustainable WRT token emissions and the bonus. It can be

• that the longer you hold, the higher bonus incentive you get, but it shall be capped at a reasonable max bonus. We would suggest doing a precise model and capping the max incentive at e.g. 10-15%

• With this being said, there should also be more focus on bringing additional utilities for the WRT token to increase its value and thus the yield. There is a new WRT utility for launchpad going out very soon. We hope that by bringing some more impactful projects and successful launches, the value of WRT will be positively impacted.

• With regard to the buyback program - this is currently not feasible due to the following reasons:

  • With the current tokens in circulation and available yield farming tokens (for approx. 3 years), there are sustainable rewards countered with reasonable sales pressure.
  • For the buyback program to be effective (significantly impact the overall demand), it would require costs that cannot be afforded with the current platform revenues, as such costs would jeopardise platform operations from a financial perspective.

[TNT]

I support the proposal to reward long-term holders more

[krebsmenschen]

Hm, I disagree with the statement of “this is currently not feasible” regarding the given two reasons.

The statement should be more like “not deemed necessary by us” for the following reasons (semantics matters).

While I dont necessarely need a buyback programm right now, I give you some counterarguments, as I see them:

Regarding “With the current tokens in circulation and avaiable yield …”’

Yes, the treasury is not depleted yet, but that does not mean, it is a bad take, to start filling it up again. So, buybacks are not a must-have but for sure would not hurt either (regarding this argument). Best case scenario would be, to not have a depleted treasury and have to speed through a solution.

Regarding “For the buyback program to be effective …”

it does not matter, that buybacks cant support the platform usage yet, if the treasury is not depleted (as you mentioned in argument 1). Hence, the mechanism does not need to pay the WRT with an amount, that would hurt the development/runtime of the project, as you suggest, it would do.

So, why should we do buyback earlier if it is not necessary right now and does not sustain the platform anyway?

Reasons for a buyback implementation would be:

1. Marketing → WR could use it, as a marketing tool to get more investors and LPs
2. WRT price increases → While small (depending on the initial percentages of the buyback) more buying pressure woudl result in price increase, as well as the potential of new holders
3. Commitment of the team to implement buyback and not to run away after the treasurey is depleted (not that the team is planning on this, but already having the tech in place, for the switch would show the desire to do so (and not to buy time))

As a side note, buybacks are not necessarely the only tool to fee sharing for LPs/Token holders. For an example, the already voted in ADA-Fee Sharing, which is not implemented right now.

Also, in regard to Fee Sharing hurting the project. Of course, the percentage of the Fees shared should be measured to not hurt running operation costs, but looking at for example Genius Yield, if the will is there, it could be already implemented. And their sharing mechanismn is quite interesting with perecentages of the traded tokens.

And as a second sidenote. The Launchpad utility is nice, but IMO poorly designed.

First of all, 1000 WRT is a really low sum (given current prices) and potential future prices a huge sum. Second, it could have been tiered in amount and holding time within the vault. Having it one epoch in the vault AFTER the announcement would mean, that people will just buy 1000 WRT take them into the vault, buy tokens in launch and sell WRT after. The real longterm holders have no advantages over the described ones, but there should be one (IMO).

Also, the launchpad is quite nice and I like more WRT utilities, but it only matters if projects do launch (interesting ones to be more clear). And given the past, the launches do not seem to be an often occurence, hence the improvement of the WRT given the current design, seems to be small (IMO). It would results in short term token prices pumps (if even at all), when an interesting project decides to launch via the launchpad and dump after the sell.

While I may sound harsh, I still like the idea, I just think, it could have been better designed.

Lastly,

while I gave arguments for sooner buybacks, I personally dont care this much about the timing (maybe I would slightly prefer them sooner than later for reasons of security, that the implementation happens at all). But other implementations seem more important for me, like V2 smart contracts, DEX improvements with functionallities, advanced statistics with pro subscriptions and so on.

Maybe a live roadmap would be nice to have, where the team is actually working on right now (not over a complete year timeframe), to decide on the importance of the current steps versus potential community ideas/wishes.

Heck, that got long.

Have a nice day, and nice to have team members interact with the community.

Cheers

[TNT]

The proposal, techrider, should be implemented soon to take effect. Who presents it?

[TNT]

Lockdown 6 months (5% increase)
Lockdown 12 months (10% increase)
Lockdown 18 months (15% increase)
Lockdown 24 months (20% increase)

How does this music sound to you?

[ilkka]

catching up here after some time. roughly that sounds decent and realistic to me but I will leave it to the Wingriders team to consider if something like this gets implemented one day? @techrider I’m guessing someone needs to run the numbers, do different scenarios? This is effectively increasing emissions (while locking WRT in of course).

[TNT]

I would like to launch a proposal in less than a week

Lockdown 6 months (5% increase)
Lockdown 12 months (10% increase)
Lockdown 18 months (15% increase)
Lockdown 24 months (20% increase)
Lockdown 30 months (25% increase)

Rewards would also be locked generating locked compound interest

Only ADA generated after V2 Wingriders could be withdrawn