368b0c41c7a09a3c466a4b856d2b24adbfddf63e
Proposal
The DAO will acquire the unused Team SPS allocation
which from my understanding is not useable by Splinterlands team for legal reasons.
This will be used in part to help drive DEC to peg.
Purpose
The best thing we can do for SPS is to get the so called flywheel started where players burn SPS to produce DEC.
There are many ways to accomplish this.
Most seem to rely on the community spending more of their resources to acquire things in DEC that would either go to the DAO or the Splinterlands company.
Aside from the risks of the DAO holding DEC, which has a finite upside, the community has been asked to give a lot for the good of the ecosystem.
This proposal seeks to balance that effort and require some sacrifice from the team to help correct some of the mistakes of the past.
The DAO should be holding as much SPS as possible so that all SPS stakers can realize the upside of a growing demand and scarcity for SPS, but because of the way SPS and DEC are intrinsically tied together, some short term pain in SPS prices to get DEC to it's intended peg sooner may be warranted.
The sooner we can get DEC to its intended value $0.001 USD,
the sooner SPS will start being burned for our transactional currency DEC
and the sooner we can get a floor under SPS prices and start to achieve rising values.
When that happens, and as the whitepaper rewards distribution starts to diminish, we want the DAO to have as much SPS as possible to fund future rewards.
Execution
Up to 48 Million SPS (the same as what was allocated by the DAO from team funds for Tower Defense)
will be swapped for DEC in the DEC:SPS LP at a rate of 65,000 SPS a day for up to 730 days (2 years).
The DAO will continue these transactions daily until
- DEC is at the intended peg of $0.001 USD or
- all 48 Million SPS allocated by this proposal have been spent or
- The DAO votes to change or update this proposal.
All the DEC acquired by the DAO through this proposal will be burned.
The remainder of the tokens received from the team allocation are to be held in reserve unstaked.
Risks
- This proposal seeks to increase the inflation of SPS by a small amount in order to start the DEC:SPS flywheel sooner (an additional 65,000 on top of the roughly 1,000,000 daily SPS minted).
- The community will likely have to endure some short term pain in SPS price until the flywheel spins up and brings the floor under SPS.
- There is also some risk in changing the terms of the whitepaper however this is not without precedent (after all Tower Defense rewards come from Team funds)
Rewards
- DEC should reach peg much faster
- Drastically increases SPS holdings of DAO (Team fund use would likely be voted by DAO anyways no reason not to add to DAO totals)
- Demonstrates the power the DAO holds and increases the value of SPS as a voting token.
A number of people have asked me what I think about this proposal, and I apologize it has taken me so long to weigh in. I like the spirit of the proposal which is to use DAO funds to buy DEC, but I think there are better ways than adding more SPS inflation to do so.
This proposal has made me realize that we need to publish more details about the DAO wallets and what assets are available. I am working on a post with more information about that which I think will help inform many future proposals around the use of those assets. I may even publish a proposal or two myself similar to this one.
@chaoscommander even though it looks like this proposal will not pass the informal voting period, it appears to be very well thought through and I think it will ultimately lead to other proposals that may end up passing and help the ecosystem significantly, so thank you for submitting it!
I knew this had pretty much zero chance of passing to me it was worth it to open a line of discussion and I look forward to seeing more info about the DAO funds. Thanks for all that you guys do!
first, but not yet ready to fight. there were too many fights the last days!
I imagine that this might be just a wee bit controversial. I hope people debate in good faith.
I hope people debate in good faith too. You did a great job of composing this and you deserve the respect of good arguments whether they like the proposal or not.
When DEC-B doesn't work to bring DEC to peg, we can try other things, but I don't think this is the right approach.
I thought the math on this was pretty interesting. I made this sheet:
https://docs.google.com/spreadsheets/d/1tRv9Njbd1c0TsBiNCYrbXW3PxCInroKFQUUh-uk_wB8/edit?usp=sharing
Basically, all other things being equal, 65k/day over 2 years would change 1 sps = 41 dec to about 1 sps = 9 dec.
Of course things are not equal, and people would trade in the opposite direction as well. But I think it gives a ballpark idea of how much price support this would give. It's not much on any given day, but it adds up over time.
Also, 65k/day is somewhere around an 8% increase in the daily inflation of sps. I think that's probably a decent middle ground for how much extra inflation people will tolerate.
Yeah it was a bit tricky to get things in a way where they would be impactful without being too much. I hope that I struck a good balance.
I upvoted, but mostly to help counteract all of the negatives for your HIVE rep.
I would actually lean toward a "no" but don't really have a strong opinion on this one. It is at least a fair proposal that has an equal proportional effect on every SPS holder instead of picking winners and losers on our #dectopar journey. (unlike some of these other proposals lately)
It is interesting how people seem to adamantly dislike this proposal that would have a direct effect on their SPS value, but tend to be OK with ones that drain other peoples' value. 😥
So it seems that as a community we all want #dectopar, as long as someone else is bearing the brunt of it. (obviously not everyone, but in general)
Up to this point we have only discussed one side of the scale (adding DEC). I thought it was worth the discussion on what it would look like from the other side (removing SPS). I knew my rep would likely get blasted and for me the discussion is worth the damage done to my Hive account.
I upvoted the post 100% to handle the rep issue. This is something we'll have to work out going forward since I definitely don't want people hesitating to submit proposals because they are worried about their Hive reputation.
Good point! I didn’t realize this was an issue prior to this. Good on u taking the time to look at 👍
This is the most ridiculous idea I have heard in a long time. Downvoted
Probably wasn't the right time to propose this. Need to wait to see what the DECB and land potions can do for DEC. I'd rather the team's SPS sit right where it is doing nothing than entering the market.
The beauty of how this is written is that if passed once peg is hit everything stops. So if DECB and land potions (if done at all) make a massive impact then this wont burn much DEC at all. The DAO has the power when it comes to SPS so even if we burn a ton into DEC there is nothing preventing us from minting more SPS (except ourselves)
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I have a real question. Lets say we get back to $0.001 DEC value again the "peg" what actully is holding it at that level. It could be pushed far higher like we saw when it was counted towards the SPS airdrop and we saw it fall to record lows because it held no more real value from the SPS airdrop and the massive bear market.
What is actully holding the peg in the first place if it gets returned. I rather see a solution to that instead of wilding throwing funds around.
Burning SPS for DEC caps off the value of DEC at $1/975. Anyone who pays more than $1 for 975 DEC is just wasting their own money because they could have just as easily spent that $1 on SPS and burned it for 975 dec. If there's no reason to buy it above that price, how would the price move up above it?
I think DEC can still drop below by a little bit but because DEC will be so scarce, anything below peg should be looked at as a deal and be snapped up by anyone who regularly burns SPS to get their DEC.
I get what you're trying to do and I appreciate it but anything that just shuffles around assets to me is just market manipulation. And the fact that you've even mentioned printing more SPS is a huge turn off even if it has nothing to do with this proposal. Still though, thanks for putting it up for a vote.
The premise of the idea isn't bad. However, the proposed implementation leaves a bit to be desired.
The issues I see are:
Don't get me wrong, getting the flywheel going faster is a good idea, but If the DAO is going to decide on it, it should be the DAO's funds that do it. With that, I think burning the DEC would be a waste and would only hurt whoever tried to buy the flywheel into motion.
Instead, I think it should be our(the DAO's) funds that buy the DEC to take it out of circulation. However, I suggest the DAO hold it to be prepared for when/if there's a reason that the flywheel system can't cope with what's making the price of DEC rise too high again. Instead of burning the DEC and using it for this purpose, the Dao selling some back into the market would further enrich the DAO. Especially if it trades the DEC for SWAP.HIVE or something else it can do more with.
As far as what too high is, I think that's a figure that should be discussed and decided by those in the DAO.
I honestly think that would be a better method to go about it. I'll keep an eye on this and ponder for the next couple days before I vote.
I would have upvoted this except for the burning component. I think the DAO desperately needs to accumulate DEC so it can provide liquidity once the LP rewards end, and removing DEC from circulation is just as good as burning it (from the SPS flywheel perspective).
Down voted.
If:
-The DAO held the DEC and sold it at $0.98 per 1k (with a daily limit that was very low to not affect the market much),
-The daily amount of SPS sold was lower,
-At DEC value around $0.9 per 1K the daily SPS selling was stopped
Then I may have upvoted.
This would mean the DAO has potential to profit from this so it is a trade that helps the peg value and the DAO funds. It also provides a light 'cushion' to low DEC values that will not have a hard impact on the market.
Hey @chaoscommander , first I want to say that I'm thrilled to see you put together a very well though out proposal. I think you did a good job of laying out your arguments and were clear what you are looking to do.
I did vote FOR the proposal because I want to see this proposal make it to the final round and get voted on by the whole SPL community. I'm not sure I will support it in the final round though, in fact I would probably not vote for it for the 2 reasons stated below. I will have to think through all the implications, but I'm super happy to see the proposal.
Regarding your proposal I have several comments now, and will probably have many more thoughts when I've had time to think it through.
Things I like:
Things I don't like:
Overall this is great that you are doing this, and whether or not it passes, I'm impressed at the job you did! Well done!!!
There is lots of time to discuss this. Should the team not agree with it in current form it is possible we can find a form they do agree to. My hope is that it will spark conversation. There are other ways the DAO could produce SPS to help drive DEC to peg but this is probably the most simple way to do it. I think that burning really is required though because the DAO controls SPS we can always make more DEC later by minting more SPS (obviously not to be taken lightly)
As mentioned in Discord, I changed my vote to against it. But again much respect to you for bringing the discussion and trying to find ways to grow the DAO even if I don't want the team's SPS used to do so! :)
Thank you for participating in SPS DAO Governance @chaoscommander!
You can place or monitor SPS Stake Weighted votes for and against this proposal at the link below:
Link to this Pre-Proposal
Updated At: 2023-01-26 00:08 UTC