Dogfooding - Distribute MIM instead of SPELL

I’d like to suggest distributing MIM to farmers instead of SPELL. Using the existing mechanisms (bribing,…) MIM has a deep liquidity and proves to be stable also during market swings.

An idea how we could distribute MIM is to actually borrow MIM against SPELL (dogfooding), which would have been otherwise directly distributed. We could set a low ratio (e.g. 10% ? TBD) to prevent instability issues.

As a result we would introduce a new mechanism against “malicious” liquidity miners from dumping SPELL. As a side effect, the protocol would effectively lock SPELL. Looking for opinions before placing a proposal.

8 Likes

I agree with this proposal. At the least $sSPELL stakers should have an option of choosing MIM or SPELL payouts. It could be done as gasless voting every other weeks.

I agree with this proposal as well. sSpell-holders should receive their revenue in the form of MIM instead of Spell, of which there is a tremendous supply and which does not retain consistent value.

I dont understand how being paid in debit is a good idea. In order to receive the MIM, you have to go into debit all-be-it against yourself. In the end your holding a liability that needs to be repaid vs an asset that fluctuates with market forces. One which has the potential of making you a millionaire from hundreds of dollars.

Also something is only worth value if other people want it. If no one is holding spell because its doing poorly wouldn’t that just further compound the problem?

Am I not seeing your proposal clearly?

Agree on this, my understanding is fees are collected from the cauldrons in MIM anyway and the current mechanism of revenue share is the team using that MIM to market buy SPELL on Sushiswap.

Making the payout in MIM could remove the manual nature of the current revenue sharing and be performed automatically with a smart contract.

The problem is that most liquidity miners dump SPELL as soon as they claim it.

The idea is therefore to payout in MIM. As such, liquidity miners would have the opportunity to buy SPELL using their mined MIM.

You are suggesting a slightly different approach.

We could significantly contribute to TVL if the protocol puts the SPELL emissions into a cauldron, borrows MIM and distributes accordingly. The drawback is that the expected returns would be lower for liq. miners (because we would need to set a safe liquidation ratio)

I’m all for this, and had previously brought up the fact that deepening liquidity for SPELL does nothing, so the high emission rate just serves to undermine SPELL. Yes we need a few pools for those who want to sell, but there is really no good reason for me to have been getting 120% APR on Arbitrum ETH/SPELL pool for a while when I was. Paying SPELL stakers in MIM would be great and likely lead to more buying due to the expectation that long term those buyers who stake early enough are rewarded with ever increasing fees.

I would include a major reduction in SPELL emissions in conjunction with this proposal if it’s going forward.

Maybe I am just not seeing the positives of accepting payment in terms of debit. Access to MIM is being addressed in another proposal so maybe that would solve some of this?

I think we need to address spell emissions. At least make them on/off-able. The team already has enough for ventures that we could survive the next round of expansion without further dilution. When we need to expand again emit more just like a regular stock split.

1 Like

Daniele has talked about staking rewards being paid as call options on goodwill yunting. I would definitely prefer that to sspell buybacks

As I understand this is a vastly different proposal to having the option to receive our sSPELL revenues in MIM vs the current SPELL (I strongly support the option for sSPELL stakers to be paid out in MIM fwiw).

Some replies here suggest this proposal is related but I dont see how it is as it refers to farmer incentives not staker payouts.

This proposal suggests that instead of paying out SPELL emissions as incentives to farmers, we use the treasury’s SPELL as collateral to mint and borrow MIM, and we use the MIM to pay out farmers instead of SPELL.

I do not support this approach since I feel like it opens an attack vector for a malicious actor who could simply ‘stop hunt’ and liquidate the entire operation, with enough fire power. Id rather us not be in a position where our primary treasury asset can be liquidated at all.

2 Likes

isn’t this what mSPELL is?

1 Like