Proposal: Revamped Positive Rebase Protocol

This proposal is already on Snapshot for voting. I am not sure how voting proposal are conducted in the community but the end goal is just trying to help.

Proposal Solution:

  1. Cap SHARE total supply to 50M Tokens, with community governance having the power change in the future.
  2. Scrap Share burn mechanism
  3. Change rebase cycle from 2x12hr to 3x8hr
  4. Divert 70% of the DPUSD rewards to Share LP providers.
  5. Increase DPUSD rewards during positive rebase to 9% per cycle until supply achieves DPUSD achieves MC of $10M, slowing down 1/3 (6% rewards/cycle) from until MC $20M, (3% rewards/cycle until MC $50M and further reductions as governance seems fit.
  6. Locking mechanism to prevent stampede:
    DPUSD earned by Share in LP - locked by 1 cycle (8hours)
    DPUSD earned by Share not in LP - locked by 2 cycle (24 hours)

On changes:

  1. Mandatory prior announcement at least 24hrs ahead of any change in the protocol. This would reduce uncertainty, price speculation and help adoption by newcomers.

Proposal explained:

The current incentives during positive rebase are not sufficient to create a virtual positive cycle and in imo, the reasons are:

  1. Current DPUSD minting rewards are not sufficient to attract newcomers

  2. Frustrated expectations that positive rebase will hefty compensate SHARE holders but expectation are not being met, killing positive momentum.

  3. Burn SHARE mechanism is off difficult grasp, as holders need to well understand the impact of TWAP and spot prices on rewards, and as consequences they are not able to anchor their expectations of their gains.

  4. SHARE holders that are Liquidity Providers are not rewarded with USD during positive rebases which is a fundamentally wrong and this mechanism don’t incentivize liquidity which is really important.

Argument for not burn Share at this point. I believe that the problem will not be solved only by burning Shares and may impact early supporters that some will leave.

SHARE px is already too low, and even with a cap of 50M token it would make it a $200K MC.

The problem is not an excess supply but rather a combination of misalignment of incentives and low adoption.

A cap on total supply will put an anchor on SHARE on market cap that is not possible with continuous inflation model making it easier for a newcomer to access the upside potential.

Better incentives for Share LPers will increase accessibility of newcomers to acquire SHARE, with deeper liquidity and lower slippage.

Liquidity Mining incentives will need to be adjusted as Share price recovery, lowering emission to adjust yields.

The changing in rebase cycles aims to increase USD rewards during positive rebases while also increasing recovery speed. It also aims to make easier from investors on different time zones to manage their assets during rebase time.