Dilution Problem: Lowering APY, hard cap supply, lockups

There’s lots of discussion around rebases & sustaining price. Lockups to keep people from gaming rebases, increased apy for lockups etc. The problem is that ultimately these are not solutions for the elephant in the room: dilution. It doesn’t matter what you might believe, math is math & a crazy high APY brings more problems then it solves. Compounding cannot outpace it on its own. Let’s prove this now:

Supply of TIME is now roughly 500k. At the current APY, supply effectively doubles approx every 40 days. This means that, if APY remains at its current level, supply will be:

In 40 days: 1 million TIME
80 days: 2 mil
120: 4mil
160: 8mil
200: 16mil
1 year: 256 million TIME

Let’s say you compound for 1 full year, since the APY is most effective by this long term compounding. If TIME supply is 256mil, at a $5bil marketcap that comes out to only $19 per TIME. Calculated out, after 1 year you would be making a 3x return IF the marketcap of TIME is $5bil upon selling. Your return is not actually 81,000%, in reality you’re looking at 200% apy due to those price drops from supply dilution & only if market cap is over double its current $2.3bil.

If we want to see actual large returns, something must be done about this dilution. The best way to do this is reducing base APY. We can burn tokens, we can find various ways to plug the dam, but the torrent will continue & get progressively larger as long as a highly unsustainable APY continues.

Here’s a rough idea of what I propose, for the sake of argument:

  1. We reduce base APY, meaning the APY given to stakers without lockups. We would need to cut the rate by at least half in the next couple months to create a meaningful dent in the problem, but preferably lowering it to 10-20,000% APY would do a lot more. This is still an enormous APY and remember, because of dilution it would actually end up being more profitable through TIME price than an absurd APY.

  2. Voluntary lockups for higher APY’s: this would be a great way to incentivize remaining staked & not gaming rebases as many have mentioned already. However, if we just spike the APY past our current rate, we aren’t solving the dilution problem & really it’s a mute move. It won’t actually help anything, fresh paint on a turd. But if we had a lower base APY for non-lockups, and then say (for arguments sake I’m not suggesting these exact numbers) 3, 6, 9 & 12mo lockups with a tiered APY that increases say 2500% per 3 mo. We would also want these lockups to have hard caps on the pools to offset the increased dilution. New pools could be opened periodically etc etc. This could be done in various ways.

  3. Hard cap supply: If supply is infinitely inflatable, dilution will catch up to us no matter what we do. If we hard cap it though, we can create a stopping point. What this number would be & when can be decided by the DAO as all things are. It can create a timetable for the evolution of Wonderland into whatever we end up being; VCs, an RPG, whatever. We can continue to make money rebasing without dilution killing our returns, continue bringing in treasury funds with mints & using that money towards our goals, and we can kill once & for all the FUD that is generated (FUD that is backed by math & common sense) surrounding dilution.

As we evolve, slowly & comfortably, we will likely move beyond being a mere rebase protocol. If we go with Daniele’s initial vision, we will become Frog VC’s cultivating the future of the market & Frog Nation, and create an NFT RPG that creates utility for TIME/MEMO. Burn mechanisms could be incorporated in an RPG, we have many options there for controlling supply. My point is we don’t know what we will become, and the factual reality is rebases cannot continue ad infinitum. We need to have these harder conversations, however uncomfortable they may be for those who don’t understand them, if we want to be successful long term & all make money as todays TIME investors.

Hoping to gauge the appetite here for these kinds of changes & bring this topic into the forum. Thoughts, criticisms? Cheers frogs :frog:


:+1: I’m not sure about #2 and #3, but I agree with the overall sentiment. I really like #1, reduction of APY. Taking a step further, I think we should allocate a portion of treasury earnings (10~20%) to buyback and burn circulating $TIME tokens.


And what is your Olympus DAO view? It is live for almost a year and it had 45x since then, there seems to be no problems with OHMies with such a dilution. So basically you’re saying that we need to get rid of (3,3) and become and ordinary DAO like PancakeSwap. I believe we need lower APY but i suppose it will get lower itself without any hard incentives. What we really need to think out now is how to incentives more people to stake for a long period of TIME. Just to clarify, I’m a not against any burning mechanics or lower APY, but it should be more natural than just lower it mechanically (like Olympus DAO had on its way, but it hadn’t implemented any burning stuff and did well, so, if we do - that’s will be even more amazing project to be in)!


I agree this is a problem, if the point of the dao is to create wealth, however, if it more like a token distribution technique then i does the job.
I do think a reduction in APY could be healthy and personally I’d like to see burning mechanisms put in place.
I don’t like the idea of a lockup period as I think we should be free to decide when we want to pull out.
Hard cap is a tough one… it might be more sensible to hard cap once the distribution winds down as to not have a count down associated with the APY. This could cause a potential pank run as everyone cashes out in anticipation of rewards ending.

Yes, moving from a OHM rebase model to a revenue share model has been the plan since Day 1. TIME supply will be capped at that point. Sifu has talked about this on discord quite a bit. Feel free to search his post to understand more.


FYI OHM voted to decrease APY to address dilution. Yes, the APY should gradually decrease over time, but the steep APY dips were done manually via DAO.

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That’s why I think the share revenue strategy is the solution for this problem, the treasury is getting a lot of money everyday because of the LP tokens that it has. Sharing this profits instead of generating more and more TIME tokens is a better solution.


If we lower APY. except for the fee problem. There is no reason to stay here instead of OHM.

This idea is not valid.

Also noted. If YOU want lower APY. Go to OHM! Its right there for you!


I am honestly confused. Dilution is core to this very concept. Dani and Sifu address this regularly and have a plan in place already. What you are suggesting is just far too soon. The early-game for a “ponzinomics” rebase DAO like this one is to build a war chest treasury.

To do that, we need to focus on growing the protocol with new stakers, get the treasury way way up: 10-25X from where it is now, at minimum. We should aim to flip SHIB’s market cap (a project that is utter trash in comparison to the utility of Wonderland, btw). With that massive treasury, WHEN dilution becomes an issue, the founders will recommend changes and we will have, as a DAO, already voted to invest in some very profitable projects.

The end goal for TIME is stopping the APY, the rebase and new minting, yes. By then TIME will offer a solid yield/dividend on a fixed # of TIME tokens. With proper management, the early yields will be smaller, but the treasury will still grow over time thanks to smart reinvestment of earnings. Eventually, TIME could be worth crazy amounts. But not if we start jacking with the program 4 months in- we have to grow that huge treasury value FIRST.

I’m in for a long-term project to build the Berkshire Hathaway of Crypto Gaming. Years to see this outline coming to fruition- not months.


@Cascadian 100%

Revenue is what we need to look at in order to bolster the treasury despite the ponzinomics. I love how Dani&team are managing treasury with yield/reward bearing assets like cvx as to create hard revenue from/for the treasury.

I hoped RPG/metaverse Gaming as a Service would be introduced as tools for treasury growth, eg - in what we would differ fundamentally from Ohm. Hope this is still in the process of being fleshed out.


It may be helpful for you to do more research on the differences between OHM and TIME.

One of the main difference is that OHM’s treasury does not step in to buyback and burn tokens until OHM is below $1. On the other hand, TIME’s treasury steps in to buyback and burn when the token price drops below the backing price.

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The thing to keep in mind is that when dilution causes price to fall below the backing price, because the protocol buys back all the TIME people sell the market cap decreases and thus there is more potential for the market cap to grow for the people who HODL. It’s strange cyclical thinking but it works. The only thing is, the selling pressure for the backed assets will be very significant and may decrease this backing price in itself. This is why I believe the treasury should hold more MIM/UST/stables and dump it in a protocol like Mirror.

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Ultimately the only thing that can stop TIME is if the whole community loses faith in Daniele, which is a risk to watch out for but unlikely, or that new buyers won’t come after a massive sell-off. Though there are other risks of course but I consider these the main ones.

I didn’t know that it was done manually. This kinda changes my perspective. Where I can find some additional information about this?

I like the Apy where it is at please leave it alone.


He’s been told before. :slight_smile:

That’s not how APY works. The APY is based on the tokens, not money. So you do get the full APY. The ROI however would be lower than the what the lambo calculator says.

Like others have said, this is why a revenu model has been discussed in the past. A lot of the newcomers/fudders think it because of the liquidation cascade because of these YT vids, but the reality is this had been discussed before all this.

Dillution is a problem and a lower APY is simply a temporary solution, not an actual fix.

Well said. I’m in this for two years minimum.

Agree to reduce APY and withdraw 10-30% of profits to burn tokens. If implemented, it will be in the best interest of long-term holders, but locking in time is not a good idea. The Ministry of Finance can charge frequent transaction fees and profits