[ABIP-12] [RFC] -Reduce emissions to 100% APY & Use Yields for Liquidity & Bond Pools

Summary
Reduce APY to 60% on staked ABI. Total emissions will remain at 10 million. Use the remaining 40% emissions to incentivize LP pools, Lending Bond Markets (upcoming), Governance Voting

Motivation

Abachi relies partly on the rebase from OHM for revenues. With a reduction in place we also need to appropriately reduce emissions.

This proposal will allow the treasury and policy teams to target 60% APY on the staking app and an overall emissions control that ensures we do not exceed 100% APY.

40% of the emissions will be routed to:

  1. LP Pools for Uniswap v3 gABI, sABI & ABI
    We need to increase our liquidity and introduce new markets. Since launch due to market conditions, we have not been able to sell bonds to initiate these. The proposal is to delay no longer and launch these pools and use emissions to incentivize them.

  2. Governance participation - Drop ABI to those who are active in governance. We are lucky a lot of people take active participation in governance, even in these slower than normal bear market days. We would however like to increase this. Community and governance require members to be active. They will be rewarded with emissions.

  3. We are launching permissioned bond markets and have to now increase the TVL on our permissioned pools. Currently we have demand for 4% APY from our partners paid in real world fiat yields. This can probably go up to 6% however to attract a large sum of Capital in the start, we would like to incentivize this capital with ABI emissions. Increasing LP will allow us to more effectively implement this.

Methodology

Policy team will use the set target function to bring the emissions lower in a 2 week period after the vote is held.

3 Likes

I guess initially I would argue reducing APY prior to any incentive requirements would be premature and so would suggest the wording of this proposal be amended to reflect this?
For example, maybe the wording should state that this reduction will only occur two weeks prior to the official launch of the LP pools on mainnet?
This provides an “incentive” for things to move more quickly than they have been whilst also ensuring existing holders continue to be rewarded via staking.

Should existing holders be concerned about ABI emissions being used as an incentive for certain activities, such as governance?
Personally, I’m active in the community and in governance votes and would benefit from this proposal. However, there is a risk this has a negative impact on price which would effect all holders as well as the protocol itself from lower bond sale prices.

4 Likes

I agree with reducing our ABI emission to 100%, however I disagree with using 40% of emissions for any rewards at this stage as it will just lead to downward pressure on the price. The permission bond markets do need to be incentivized so I suggest OHM to be offered as incentives instead, especially as our (g/s)OHM yield will be more then enough to cover rewards.

3 Likes

Support the APY reduction but like what rand and thegreatestshowpig has said, I feel that ABI shouldn’t be given out as incentives especially in such fear-driven markets where the ABI might be dumped real fast.

For the 2nd part regarding active community, I’m not sure if promoting active participation from community is going to have an effective result. I see the same good ol faces with new ones here and there. I reckon most are hibernating from crypto till the next bullmarket or insane price action. Outreach seems to be what needs working on → next season of abachi games XD?

2 Likes

Agree with the APY reduction and I like the idea to add a percentage of emissions to LP as this becomes important when lending goes live and one of the proposed criteria for whitelisting is to hodl ABI.

Regarding incentivising governance participation and lending pools with ABI, I disagree, as mentioned in the previous comments, it will have a negative effect on price.

I’m OK with reducing emissions (assuming it’s a 50% reward rate drop to 0.055%) to stem the sell pressure. However, I don’t think paying out incentives in ABI will be helpful.

  • What kind of liquidity do we hope to raise, and the amount of incentives we expect to pay over the next 6 months? Given that we’re earning about 1000 OHM monthly, can we make do with paying out just OHM as incentives?

  • Community should certainly be incentivized for participation in governance, and even more so if they put up well-researched proposals for discussion in forums. So in full support of that.

I agree with you

1 Like