Rework the MIM replenishes mechanism to favorise stakers

Hello witches, wizards and frogs. Following the numerous discussions around the replenishes happening lately, I would like to put up for discussion a change in the MIM availability mechanism that was brought up by smhagain on Discord.

The growing frustration from the first-comes first served mechanism around MIMs should be addressed in our opinion as lots of users can not use the platform at all.

The proposition would be to reserve a part of the replenishes for SPELL stakers, in order to :

  • Secure access to MIMs for protocol supporters
  • Reduce the farm and dump process of the SPELL token
  • Reduce the impact of bots scooping up the MIMs at the disadvantage of protocol users

The fully detailed draft proposition can be found here :

We encourage everybody to speak their mind about this as it would create great changes for Abracadabra.
The team’s opinion would also be appreciated as some pieces might be missing.

Stay safe :frog: nation, let’s build a better system for everyone to use :mage: :woman_mage:

15 Likes

On the face of it seems a very reasonable change, reduces sell pressure AND provides extra utility to the token.

Being able to guarantee a chunk of a replenish is MASSIVE, considering this is the main purpose of abracadabra.

Big thumbs up from me!

4 Likes

I agree with this proposal as it will:

  1. encourage $SPELL holders to stake their $SPELL
  2. save the hassle that $SPELL stakers don’t have to refresh the replenishes twitter every 5 sec

When we do vote for it?

5 Likes

Right now this is just a draft, if there’s enough interest we might be able to bring that up for further discussion here in the governance proposals part, then for a vote.

2 Likes

Great idea, seems fair for stakers and early holders. More replenishments would also be nice.

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I like this idea but I think we should ensure that the ethos of #FrogNation is incorporated. There are some big sSPELL whales out there who wear suits and are taking advantage of Abra and hurting the community. Let’s ensure that the everyman gets a seat at this table and that we don’t just hand out MIMs to those who have fat bags of sSPELL…

For eg, we could structure the MIM distribution like clearing an Order Book of a market. Fill the smallest order first, then apportion an equal amount to every other order. Then fill the 2nd smallest order and apportion an equal amount to every other order. That way, the regular folks all get taken care of and the whales can take whatever is left over.

The only part of this idea I don’t love is that I’d have to repay the MIMs I’ve borrowed against my sSPELL. But if that’s the price for progress, then so be it I suppose…

2 Likes

We might also need to think about implications of gas prices. These borrows cost gas as currently architected, and on ETH that’s an issue. The protocol can’t know who has enough to cover their gas and as a customer, I might not want my ~$100 share of a MIM drop that thousands of people are in line for. So I’d want a minimum Fill amount, or it may not be worth my gas.

It might be better to solve this by making the “reservation pool” into a new form of Cauldron, whereby customers have to both 1) Stake their sSPELL and 2) deposit their liquidity to fill the purchase.

The fills happen and anyone who is happy can Withdraw and move back to the regular Cauldron. Anyone who didn’t get all the fill they wanted and doesn’t want to pay any gas until they are apportioned enough to be worth it can wait for the next MIM replenishment and try again.

Let’s ensure that the everyman gets a seat at this table

Yes I think this is the main priority, Abra and the frog nation is all about giving small fishes a shot to use the products.

I like both the “fill order book” and the liquidity pool, I didn’t thought about the gas implications. Pooling funds could work so gas for users is overall reduced and Abra would only execute a few transactions to distribute the MIMs all at once.

The more I think about it, I don’t think a minimum amount/value of sSPELL should get implemented so nobody is excluded, also maybe a snapshot on other networks could be done so people having sSPELL on other networks could participate.

The time lock thing is a good workaround against some kind of abuse imo. Would have to work it out some way.

This is an interesting proposition but we need a fast enough network to support which ETH at the moment is a problem. Also maybe these big whales can afford to interact with the contract with many small orders faster than the community can.

I like the idea of enabling some features to be more inclusive to long term hodl’ers and community members in general. However I see minimum purchase amounts running counter to the purpose the creators initially set up to serve (WAGMI)!

Lets keep in mind that this protocol serves the SPELL holders in part via liquidation fees. So to that end we should really focus on allocations vs whole restructuring. I just want to point out that at some level we need people to ape in and take risk, get reked by liquidation or pay off their loan because we get paid for it. To that end a 30/70 or 40/60, etc/etc % allocation structure should be considered for this. This aligns both frog and whale interests neatly. Start slow, move in increments towards equilibrium and re-evaluate over time.

I want to encourage everyone here to resist minimum purchases requirements and prefer time invested as often as possible. There will definitely be a balance. Holding 10 SPELL for 10 years is easy if it buys you access to 100k MIM. So keep initial investment requirements small and target % changes for increases in MIM access (end over end % increases per vesting period) solves both sell and buy requirements at once. Further hedge against sales pressure using penalization for sSPELL sale/unstake but in moderation.

I will acknowledge permissionless systems are by nature difficult to protect against abuse or fraud so in the end if we have to target specific valuations then we need to structure it in tiers so to protect smaller participants.

I recommend the following be considered:

Reservation Window(s)

  • Short duration windows (2~4 hours), Degen pot takes all.

  • Well defined alternating schedules
    – time zone,
    – chain

  • cauldrons:
    – as needed basis
    – announced by leadership ahead of schedule
    – reallocate percentages of MIM from underutilized to overutilized cauldrons

  • Examples:
    (Offset: [Schedule], [Chains], [Cauldrons])

    • UTC-0: [2AM, 4PM], [ETH, AVAX] [cvx3pool, spell, sspell, wmemo, xjoe]
    • UTC-4: [2AM, 4PM], [ETH, AVAX] [cvx3pool, spell, sspell, wmemo, xjoe]
    • UTC-8: [2AM, 4PM], [ETH, AVAX] [cvx3pool, spell, sspell, wmemo, xjoe]
    • UTC-0: [2AM, 4PM], [FTM, Arbitrum, BCS] [wftm, eth, wbnb]
    • UTC-4: [2AM, 4PM], [FTM, Arbitrum, BCS] [wftm, eth, wbnb]
    • UTC-8: [2AM, 4PM], [FTM, Arbitrum, BCS] [wftm, eth, wbnb]

Minimum Hold Requirements

  • 30 days sSPELL to enter
  • minimum 200 usdt/usdc/mim sspell capital requirement
  • consider small re-entry time requirement after exit unless cauldron was deprecated
  • consider de-pegging tiered position on sale or unstake sspell position
  • consider end over end sspell capital requirements (15%/year/peg)

Initial Presale Benefits

  • 10% of all MIM allocated for that given cauldron to presale.
  • 5k maximum per-address MIM allowance (mMA) if all minimums are meet.
  • 1 borrow limit during presale window per cauldron per IP/MAC address

Maximum Presale Benefits

  • 50% of all MIM allocated for that given cauldron to presale.
    – consider higher values for coveted cauldrons (wMEMO) & those aligned in the ecosystem.
  • 1.5% cauldron allocation in maximum per-address MIM allowance (mMA) if all minimums are meet.
  • 3 borrow limit during presale window per cauldron per IP/MAC address

Tiered Position (Peg) Requirements

  • Assign maximum hold requirements term (rT = 12 months).
  • Add equal portions of borrowing capacity per month (100%/rT = 100/12 = 8.333%)
  • Consider end-over-end sspell stake capital requirements (e.g. move to peg 2 with 15% increase in holdings from peg 1 allowance)
  • Consider depeg from tier/month x1 or x2 from sspell unstake/sale.
  • Example Schedule (Months, MIM):
    rT = 12, mMA = 5k | 10k | 100k
    – 0: 0 | 0 | 0
    – 1: 416.50 | 833.3 | 8333.00
    – 2: 833.30 | 1666.60 | 16666.00
    – 3: 1666.60 | 2499.90 | 24999.00
    – 5: 2083.25 | 3333.20 | 33332.00
    – 6: 2499.90 | 4166.50 | 41665.00
    – 12: 4999.80 | 9999.6 | 99996.00

Using a well structured approach will allow the community to fine tune these inputs. Obviously metrics would play a critical role in feedback for further tuning.

2 Likes

Excellent ! Really great proposition I like it, I just have a few questions/things I didn’t fully understand :

minimum 200 usdt/usdc/mim sspell capital requirement

Doesn’t this go against the “no minimum purchase requirement” ? It’s not that much but 200$ worth of SPELL + gas fees can be significant for some users ( I’m thinking mainnet staking there, bit different for other layers but still )

consider de-pegging tiered position on sale or unstake sspell position

I’m not sure what “de-pegging tiered position” means ? Is it related to losing your part of the pot in case of unstaking?

  • 1 borrow limit during presale window per cauldron per IP/MAC address
  • 3 borrow limit during presale window per cauldron per IP/MAC address

I’m not sure how the IP/MAC address blocking would be implemented, but this rule could be bent by bot makers and would only impact legit users in the end.

Consider end-over-end sspell stake capital requirements (e.g. move to peg 2 with 15% increase in holdings from peg 1 allowance)

This means if you stake more after some time you can get access to a second tier of borrowing ?

I’m all in favor of such an idea to be honest thanks for your input :pray:

Hello and thank you for your feedback.

  1. Yes but its so low to enter 99% of people can do it. It could also be lowered or tied to a % of cauldron or market cap, etc.
    – The gas fees on ETH can be mitigated by not using ETH to begin with. If your capital expenses for entry are in the 200 USD/MIM range you have no real reason to be on ETH mainnet except for lack of knowledge. This is easy to mitigate and on the individual to educate themselves.

  2. Yes I mean to show that level 1 - 12 are tied to both time invested and your level changes with market behavior. If you were to sell/unstake your losing a level which is reclaimed with holding time.
    – The depeg or level loss could also tend towards a logrithmic scale in the sense that the higher you climb the harsher the penalty.
    – Example: 12 - 8, 8 - 5, 5 - 3, 3 - 2, 2 - 1, 1 - 0

  3. I have been talking about this with other developers in the web 2.0 space this morning and have to admit it is all spoofable. Even full federation, saml, or jwt even would enable multiple accounts via google, facebook, etc.
    – In the end this is just wishful thinking. Without KYC this is not possible so the solution must be through incentives to play fair which has to be easy enough to comply with, such that setting up elaborate schemes to circumvent them is more time consuming then its worth.

  4. So this comes from the hole you will eventually come to see when you consider hold time as the only metric. Hence my comments on 10 spell for 10 years buys access to 100k in MIM presale. So building off #3 here, making it easy and worthwhile to continue playing the game, just increment a % end over end requirement in tandem with time invested if the situation calls for it.
    – Example:

    1. Level 1 obtained with 30 day hold
    2. Level 2 obtained with 60 day hold and 15% increase in sspell capital.
    3. Level 3 obtained with 60 day hold and 15% increase in sspell capital from level 2.

I would also like to point out this is all programable and if structured in such a way that we can turn dials up as we go, starting with 0% capital evaluations between levels is fine to start with. Give it 2 or 3 replenishes to see the side effects and dial up as we go.

Even if the dial is turned to max, the starting point is easy, accessible & primarily based on participation which everyone can do. This would mean we would have to ensure the rT value is not sliding permanently to the right forever baring new entrants from reaching the further levels. This is partially solvable via grandfather attributes as well.

Another thought I just had thinking about the barrier to entry would be to do away with it at level 1 and implement a bell curve so that hump is in the middle.

As long as people cant just show up with funds that skip to end it makes everyone’s journey equal I think. Removes entry requirement entirely and concentrates the hard work towards the middle of the journey at not at the start. We just need to tune the mean & standard deviation values as we go. Start with 0 & 1 respectively and your bell curve looks like the one in red below.

Thanks for clarifications ! It totally makes sense and I like that “level up” thing. People really engaged with the protocol would even be proud to have reached a certain level after some times imo.

I completely agree with your first point, then Abra would need to deploy more cauldrons there. Currently wMEMO is the main case for this discussion, if we want to incentivize borrowing on other chains it’ll require more cauldrons as well.

I’m leaning towards the bell curve rather than an exponential as well, if you went through the hardest part during the middle of it it shows how much you’re committed to the protocol. Also with the decrease of levels, if you unstake too much you can end up going back to that “hard part” of the curve where it’d be less the case with an exponential.

Awesome system I love that.

1 Like

Great idea! It seems having separate cauldrons for sSPELL holders is the simplest way to implement. Then the team can still allocate as they see fit. But reward stakers with access to MIM borrowing using favored collateral that is now only available to bots.

This is a great idea! Lots of details flowing around, would love to vote once the final proposal is drafted. Thank you for taking action to help small frogs to participate on the action!

1 Like

Methinks we might accomplish two really important objectives here:

  1. ensure reasonably fair distribution of opportunity to get MIMs between community and whales
  2. incentivize hodling sSPELL, thereby reducing farm and dump pressure on SPELL

We need to be careful however not to create unintended consequences. If we think of Curve for eg, to get max vault yield and profit sharing rewards, you must Stake CRV for 4 years. This ensures users are committed and the CRV are unavailable to be sold and depress price.

If sSPELL HODL duration and / or time lock commitment improve your chances of getting MIMs, Abra might see a similar degree of customer willingness to to invest in becoming a protocol owner.

The downside to all of this is somebody would probably just create a Convex equivalent for Abra. Which could be good or bad, depending on your perspective?

Here is my first crack at the distribution curve model.

This is just a rudimentary Gaussian distribution curve. I wanted to share it so people can see I am going to, at least attempt, to prototype some models that allow graphical feedback to what it might look like implemented. After something concrete formed I can go make the javascript snippets to recreate it on the web.

My next step is tying the curve to sSPELL hold/MIM replenish amounts. I’m going to stick with the 50M that is already allocated and present graphs on what a 30/70, 60/40 distribution would look like. We know Danni is working on more MIM to for wMEMO so this might be just in time for that.

It would be pretty helpful for some dev feedback on what real world metrics we can collect to use as inputs to twist the curve based on demand. Can we record:

  • Time to empty?
  • Median, mean of user’s level?
  • Median, mean of user’s sspell holdings?

Other general questions:

  • Can we offer a pre-registration window for anyone to suggest what their borrowing apatite is before laying out replenish amounts?
  • Ill think of more as time goes on.
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When is this becoming a proposal?

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After we have some concrete numbers to propose. At least that’s where I would feel confident in presenting it. I would imagine having the math done ahead of time would make the developer, if it was implemented, happy.

1 Like