xBond: accruals

currently xBonds demand users to claim rewards every rebase. This is gas intensive and only benefits users who are able to claim larger amounts of USDx.

Pros: helps increase xBond - USDx ratio, which makes it more attractive to mint xBonds during negative rebase
Cons: potentially more expensive to users with low ownerships.

On the other end of the spectrum are users who want to liquidate all of their xBonds in one go. This defeats the purpose of xBond, which is suppose to be a longer term instrument that pays out users handsomely (40%) gradually.

An interesting compromise is to potentially allow rewards to accrue during positive rebases so smaller actors can wait a few days to claim.

If you think about the economics, larger xBond holders see no difference as they already consistently redeem during positive rebases. Smaller xBond holders may see some benefit as they can now redeem their rewards, and not necessary increase the sell side pressure as much.

Technically speaking, this is doable by summing up the initial claimable every day to the previous days claimable balance, such that every day, the total claimable is all the previous days reward plus the current day’s reward.

Users can also have the option to rebond (which basically means re-bonding their allocation, and lowering the total claimable rewards). The benefit of this is maintaining the high ratio of xBond - USDx.

This is all preliminary discussion and we’d be interested in finding a good compromise. That being said, a few higher things on the agenda including full decentralization :slight_smile:

3 Likes

Agree and support. Small/medium capital need some system to exit from xBond in one transaction, right now looks like they feel stuck forever.
Also it will make xBond more attractive overall.

support! but imo for usdx in bootstrap phase it is easy for short traders to sell the new rewards from system delta which will cause the sell pressure instand ppl are eager to sell it for cash .
my advices are as follows :slight_smile:
1. give users option to turn on auto-compound (stake USDx) button(both save gas and sell pressure )
2.time weighted Seigniorage for long time supporters
3.add timelocker for Seigniorage which could be the same as ESD or whatever not kill the momentum of USDx price instantly
DP is great and a long way to grow up but as the such low marketcap DP is not accepted by others main DeFi protocol which means no more usecase and users
hope we will keep expanding soon ! @Robert

Agree, it will help small xBOND holders while not taking away anything from big xBOND holders.

But I think a cool off period for claiming rewards may be good. It should help decrease sudden sell pressure, because what I think might happen is that people will let the rewards accrue and as soon as they see a good pump in USD price all of them can just claim and start selling. So during the current stage of the project where we need expansion, it might be a good idea to just have a 2epoch cool down period to claim all their rewards.

2 Likes

This is a decent addition but it still doesn’t fix the stuck xBond problem. Regardless of the size of the holder, you will never be able to fully cash out because when your stack becomes small towards the end, your percentage of claims won’t offset gas costs, even with accruals. Especially since it’s likely that ETH continues to rise in price.

If xBond is supposed to be a longer term play, then there should be priority given for cashing out for longer term holders. At the moment there really doesn’t appear to be a light at the end of the tunnel for small xBond holders. How about something like if your xBond are 2 weeks/1 month/2months old you are able to cash out a higher percentage each epoch?

Or we could re-visit the tiered xBond idea. There really needs to be an option for people to fully cash out at some point if they want to.

sure but profit should be correlated to risk xbond users should know where the profit from and what the risk they take then how to quit if rules are set

I would push back and say the instructions for xBonds were very clear. If you want to get your entire principal back you’re better off choosing the less risky USDx staking which has a lower payout.

xBond has high payout is due in part that the payout is risky as the timeline could potentially be longer than a preset interval (ie 3 epochs or 6 epochs). USDx has a preset interval which is predictable and more safe.

Current xBond users have one way to recover principal and that is to see the system expand.

Another way to think about it is USDx is similar to convertible debt where upon your debt is paid back in full plus interest (or a t bill). xBond is more akin to equity in the sense it pays dividends. xBonds differs from equities as it is redeemable.

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I’m not saying that the instructions weren’t clear, i’m just saying that it needs improvement. It doesn’t make sense right now because no xBond holders will ever be able to fully cash out with current gas prices.

This is definately good idea, but I personally may think it’s not the key issue on xBond. People think xBond need improment just because we dont have continuely positive rebease for the moment, which is because USDx expansion is not enough.
I’m thinking if we really need wait USDx expansion to certain level then launch EURO or YUAN. Looking into our DP system, it works very well. What if using xBond somehow to mine EURO ? Will this resolve xBond holders’ question and increase USDx demand?
A EURO or YUAN launch mechanism and schedule should be on table IMO.

2 Likes

The accrual option gets my vote, if you choose not to redeem them just carry all those rewards to the next rebase. That would provide smaller xbond holders a viable option to beat the gas trap. Remember most people will be looking to reinvest this into DP. I was in the last positive rebase run and my usdx was nicely rising but never did I once have a win scenario to redeem and then as soon as it hit negative it’s wiped out. Until it’s changed I personally won’t be looking at xbond which is a shame

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Having read all the comments, accrual option gets my vote. I suggest let’s not put impediments in the way of adoption by new users and let’s appeal the widest audience possible (meaning not just large wallet players) for bonding. Negative messaging by people who get into xBOND with unsatisfactory outcomes, even if onus is on them in terms of lack of due dilly resulting in a lack of understanding, goes against us in the end. We need positive grass roots marketing and that means postive user experiences. Let’s do what we can to make the bonding experience better for smaller wallets.

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I do agree with the above-mentioned decisions.

The DP must support the small ownership investors, as they will eventually become part of the community, positively influencing the Dollar Protocol as a whole.

In short: gates should be wide open for all, not only for the whales.