List of improvement for a possible better Dollar Protocol

This is more a topic for discussion and food for thought than properly a voting proposal.

And is a collection of some of my thoughts with other suggestion I saw from community that i think would be helpful.

I didnt read the previous discussions, so moderator fell free to delete if it is too redundant.

Improvements:

  • Increase Rebase periods from 2x12hrs to 3x8hrs. It speeds up the cycles while helping investors from different time zone to better manage their assets during rebase time.

  • Cap SHARE supply which can be changed by community governance in the future if necessary.

  • Eliminate SHARE burn. With cap supply there is no need to make SHARE deflationary anymore and it would make it less complicated. (to think more on second order effects).

  • Avert SHARE death spiral during negative rebase by locking discounted Shares disrupting negative feedback loop arbs.

-Put a cap on debt to be burned and on discount, so that ppl dont wait indefinitely to get max discount.

  • Narrow the rebase interval making it gradual from 0.99-1.01 (neutral) value. The idea is to incentivized actors to act early rather than late to maintain the peg.

  • Inverted discounted curve, higher discount limited supply on initial discounts, counterbalanced with longer lock period. (needs more thought on second order effects, like bots successively dumping the px and pushing up again to get the discounts).

  • On positive cycles, divert some of the minted USD but not too much so that in rebases it makes incentives non attractive. Or if already hv USD on treasury use it to smooth out the USD curve px. When USD is above some threshold treasury sell USD agst SHARE and/or ETH to create a buffer for when it is in negative rebase. Treasury could also be used to regulate relation between SHARE spot px vs TWAP prices.

  • Close all non core LPs. (already voted).

  • Find a way to give rewards to SHARE in LP during positive rebase. A large LP is what makes the peg sticky, therefore it should be properly incentivized.

-Get more marketing, maybe give some locked SHARE to some influencers to shill DP, after all synthetic asset adoption is all about network effect.

  • Change the name of USD to something like DPUSD and DPSHARE to make it more recognizable on tweeter.

There is definitely more but this what i could think of now.
Thanks for taking your time to read this.

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I agree with all of these and they should be implemented ASAP.

Hard cap on SHARE supply should be first priority and then the locking of SHARE during negative rebases.

could you please elaborate more here

Okay, what I have in mind is a model intermediary between discounted Share px and Debase like AMPL but with aim to accelerate the return to peg.

Inverted discounted curve.

This incentives aims to achieve:

  • Quicker return to Neutral zone when USD TWAP px goes on contraction zone by given better deals the faster ppl acts instead of waiting long periods until the protocol achieves maximum discount (current model).

All numbers below are subject to adjustment/fine tuning.

Suppose Max discount is 40%, Max Burn Supply of 40% of total circulating supply and current threshold prices of $0.95

  • USD TWAP goes below $0.95

1st cycle: In the first interaction Protocol disposal of 5% of Max burn supply at max 40% discount to be burned for SHARE and the discounted SHARE is locked for 1 week.

2nd cycle: IF USD doesn’t come back to peg, in the next cycle protocol creates additional 10% of max burn supply with 30% discount locked for 5 days.

3rd cycle: If USD doesn’t come back to peg, protocol creates additional 20% of max supply at 20% discount

4th cycle: follows the logic above lower discounts and more supply.

WHAT IF:

  • After any cycle if the discount is not enough, there is supply left with no interest and USD is not back to peg.
  • Then the protocol wait for lets say 4x12 hrs cycles (or two days), before start debasing like AMPL.

If this model proves useful it can be reevaluated to recalibrate the positive incentives (max discount and supply available) and negative incentives (locking period).

I tend to think that a well calibrated model would incentivize ppl to jump in to buy at max discount soonest possible and in the worst case would prefer to jump on a discounted share than be subject to debase.

What is left open: What to do prevent a bot or a malicious whale that keeps px just above $0.95 and alternates px above and below threshold to exploit the max discount?

What to do prevent a bot or a malicious whale that keeps px just above $0.95 and alternates px above and below threshold to exploit the max discount?

Thinking a bit more about this issue, one implementation could be to put a cap on discounted share each acct could get at each discount level and the limit would free as lock up period expires. It would not prevent whales and bots to act maliciously but it would make costlier as they would need to spread out to several accts to make it worth. This would also hv the benefit of more being spreaded among accts than one single whale sweeping all the juicier discounts.

Only hole I see with that approach is that anyone can just create more wallets to side step the cap

Yes, but i guess manually that would hv little benefit on max discounts as many would jump on little supply. A bot could do it but at increased operation and gas cost.

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