The following proposal would require migration to upgraded smart contracts since it’s a major change to the original Olympus code.
The recent selling pressure has caused the price of $TIME to decrease significantly in a matter of days. One of the reasons for this is that these rebase tokens are highly inflationary, you put in X number of tokens and this amount multiplies over time.
Some investors withdrew their entire balance (initial deposit + rebase rewards), while others with leveraged positions were liquidated, losing once again their entire balance (initial deposit + rebase rewards). If the number of tokens that leave the DAO always exceeds the number of tokens initially deposited, we would continue to have more episodes of immense selling pressure, especially during periods of fear, uncertainty and doubt.
What if we put a limit on how much investors can withdraw in a single day?
At the time of writing this proposal, the reward yield is 0.5992%, and with three rebases in a day, the supply of $TIME for those staked should increase by approximately (0.5992% * 3) = 1.7976% today. Even though the tokens are staked and removed from the market, nothing prevents the unstaking of this new supply.
My proposal is to limit the withdrawal amount per day to three-fifths (0.6) of the amount of the daily staking rewards. So, if it’s currently at 1.7976%, investors should not be able to withdraw more than (1.7976 * 0.6) = 1.07856% per day. This limit should be applied to the entire current balance (initial deposit + rebase awards).
If we limit withdrawals to an amount that is lower than how much new $TIME is generated per day, this will give the protocol greater control over the amount of $TIME that gets dumped into the open market which unfortunately increases its supply and (drastically) reduces price.
Here is a simple table to illustrate the math. Let’s say an investor initially deposits 1 $TIME token, the staking rewards remain constant over a 5-day period and the investor makes a withdrawal on days 1 and 4.
As you can see, the daily withdrawal limit in percentage is fixed and is lower than the daily staking rewards, which is good for limiting selling pressure. So, no matter how many investors withdraw in any single day, the DAO would always be able to conserve and protect a greater quantity of $TIME and help maintain its value.
You will also notice that the number of tokens you can withdraw increases every day, so the longer you wait to withdraw, the more tokens you can withdraw. You guys can extrapolate this data over longer time periods (a year or more) to really see this point.
This proposal can also help out in other areas:
• Emphasize the point that $TIME is a long-term investment to truly experience the power of compounding interest.
• Prevent rebase trading / side-stepping which goes against the essential 3,3 principle.
• Increase and maintain buying pressure: By controlling the selling pressure and leaving the doors of upside potential open (with attractive APYs, an awesome team and innovations), we can see faster periods of growth and shorter periods of decline/correction.
What do you guys think about this? $TIME Wonderland is a great project, but we need to find ways of controlling the inflationary nature of the tokens.
