There are currently two ways to distribute new seigniorage.
1: Pro-rata distribution like we do currently. Share token holders do nothing and receive new seigniorage automatically
I wanted to discuss the pros and cons of each.
Specifically, for #2, an auction style payout would require users to burn their Share tokens to receive USD or whatever type of Seigniorage.
I believe both 1 and 2 to be economically equivalent but the nice side effect of 2 is that Share becomes deflationary with growth. This may counteract the negative rebase cycles by allowing the supply to contract once again during positive rebase cycles.
A positive rebase cycle would work as follows:
1: the protocol calculates the seigniorage needed to payout (similar to burn during negative rebase)
2: the protocol attaches a default exchange rate (at market prices) and every day there is a positive rebase, the exchange “bonus” increases. So maybe day 1, 1 Share = 10 USD, and day 2, 1 SHARE = 10 USD + 5% and so on.
The bonus can also be algorithmic if the community wishes.
I don’t have a particularly strong preference of either but i think this merits a discussion.