SPS Governance Proposal - Adjust Token Distribution Strategy
Preface
(Skip to the bottom for technical aspects of the proposal.)
The purpose of this proposal is to ensure that the SPS DAO has a viable strategy for providing rewards distribution for years to come. After my recent post exploring a more sustainable approach to rewards, a DAOn Hall with Matt and Dave as well as many conversations with SPS stakeholders, I've put together a proposal based on that feedback to present for the DAO's consideration.
I'd encourage everyone to approach this proposal with an open mind, provide actionable feedback if you desire to do so and most importantly to consider that this proposal is built on compromise to ensure that we all have rewards going forward and that there is no perfect solution that everyone will agree to enact.
What's the strategy?
The strategy that this proposal aims to implement is similar to my original suggestion of endless exponential decay, but is modified to have boundaries in place that help to mitigate some of the rewards decline. The reason for this is that some of the top stakeholders feel that substantially cutting the rewards over the next 12-24 months while we're trying to market and grow the ecosystem could have a negative impact on our chances at success as well as reduce the incentives of our current player base to stay engaged.
This modified strategy aims to create a compromise where we create a roughly 3 year runway for our exhausted reward pools so that we don't have to be concerned about any abrupt drops and the decline will be much more gradual than the one that I was suggesting with endless exponential decay. Some pools will still have a much longer runway than 3 years as we'd be making this change earlier in their lifecycles.
The main difference with this modified strategy is that after 3 years we will have to start providing rewards, which to be fair we'd have likely needed to start supplementing rewards after 2 or 3 years with my suggested solution anyway as they would be trailing off significantly at that point. In short, we get the benefits of extending our rewards runway without dedicating a large portion of the tokens to the low end of the endless exponential distribution model.
Proposal
If this proposal passes, the SPS DAO will reallocate the remainder of the unused tokens from our LP incentives rewards pool in the following ways:
- 79,000,000 tokens will be added to the Staking Rewards pool.
- 1,000,000 tokens will be added to the License Rewards pool.
- 50,000,000 tokens will be added to the Modern Ranked Rewards pool.
- 50,000,000 tokens will be added to the Wild Ranked Rewards pool.
- 20,000,000 tokens will be added to the Tournament Rewards pool.
The distribution function will be changed as follows:
- Z = MAX(X*0.7, MIN(Y*0.05, X*0.9))
- Z = New Monthly Reward Allocation
- X = Current Monthly Reward Allocation (See table below for reference.)
- Y = Reward Pool Balance
If you'd like to see tables of how this impacts each rewards pool specifically click here.
Additionally, to help further incentivize staking and offset the rewards reduction, the Splinterlands team has agreed to help bolster Voucher incentives by releasing at least 10 Voucher exclusive cards and one exclusive cosmetic item that can only be purchased with Vouchers per year. This should also help Land as each of the Voucher exclusive cards will have its own auction cycle.
yes! convince me otherwise
Looks like a price crash and mass sell-offs are coming...
I don't understand why we just don't lightly slow down emissions until things "take off" If this is all about economics then there are times when the SPS printer needs to be slowed and then increased. To me this is a time where it needs to be slowed. I'm not talking anything crazy either make it a 10% cut for now and we should see SPS prices slowly rise which to me would look better. This below 1 cent BS for a governance token makes it look like a joke to the outside world. We need action in increasing the price of SPS and holding it steady. Not increasing the emissions of it and diluting the value further.
I don't know everything going on though I don't think anyone really does but that's just my opinion and my thoughts on the matter. I'd love to hear counter arguments, graphs, stats and all the goodies.
This is, in fact, a 10% drop in all emissions. Check the last table.
However, it does also inject new SPS into the reward buckets, meaning they'll carry on for longer, which is likely good for people looking for reward sustainability.
Well those sound like positive things to me. Sometimes hard to tell what in the world is going on lol so from the sounds of it this has my vote
It looks like Brave already addressed this, but yes it's quite literally a flat 10% cut across the board to start and goes down slowly over the following 3 years. Some of our pools would have run out in less than a year while others had 5 years of runway. This proposal aims to give us some sense of balance and continuity for rewards over the next 3 years.
Great to see that we are thinking about a sustainable distribution of rewards.
I would like to see a system where SPS won by players is taken from the players that they have beaten. House bots would not only pay out when beaten but also take SPS when they won. This would lead to a zero SPS inflation game over time. I am thinking that such a system could be introduced gradually where only a small amount would be taken on loss initially and increased over time. SPS could be staked to increase the % of SPS awarded per win and SPS could also be staked to reduce the amount of SPS taken on a loss. This would obviously create greater demand for SPS at the outset and SPS price could maybe go up.
Such a system would best be suited to a proper ranked system where players could once again be competing on an even playing field which is another reason why I like my idea.
You have my vote, but I still think providing staking rewards outside of vouchers is pointless.
Hmm, how to vote if I like the slow down but definitely not the distribution of the added tokens. I guess it won't matter anyway how I vote, but these omnibus proposals are not great. I recently heard from someone in the team that we shouldn't think binary, why do we have to decide binary?
I personally think not adding to land is fine, because land has other benefits now and SPS mining on land seems to me like something that should be eliminated over time.
At the same I can't understand why the biggest share goes into staking, which I consider a complete waste of SPS. I would much rather see this allocated to modern and wild.
I also don't think tournaments deserve 20m when so many DAO sponsored tournaments turn into "buy SPS with DEC cheap" because there are not enough people signing up to not make it on the leaderboard.
And if I understand correctly we allocate 1m SPS to reward holding licenses instead of rewarding actually using licenses? What is the point in that?
TL:DR
Reductions yay, but please make multiple proposals for the individual allocations.
The problem with splitting them is that if we pass just the slow down and distribution mechanic, you're going to see ranked rewards and staking rewards fall off an immediate cliff to the point that it'll remove most incentive to stake the token after a few months when they run out. The rewards allocation isn't specifically about any bucket getting more or less, but to aim for the 3 year target without taking anything from any other buckets. This proposal was built to address and balance those issues so that we have a clear gameplan in place for the next 3 years.
Add the formula in a code snippet (you can use backticks to surround the formula), otherwise italic from markdown will be get triggered when parsing the text, rather than the literal formula. Like this:
Z = MAX(X*0.7, MIN(Y*0.05, X*0.9))I'm ok with the proposal.
Good catch.
Why are we adding to the buckets..... for the love of god please. We have already inflated the shit out of this token. The distribution should be over already, not continued.
SPS is a GOVERNANCE token.
Now we have effectively given the next mini set an eternal discount, devaluing all cards for the foreseeable future. DEC already falling off a cliff, SPS back on the decline.. Do we not understand economics here?
It is a paradox that to avoid a long-term collapse in rewards, a short- and medium-term devaluation could be triggered due to increased supply.
I'll support this proposal as it ensures reward continuity for a reasonably long period of time, and it reduces ongoing monthly emissions. There are aspects I would do slightly differently, but overall I think this is a compromise that's generally positive and it's important that we settle on a longer term runway sooner rather than later. Also, we can always make adjustments in the near or medium term to further optimize this.
Couple of additional points:
@vugtis posted several thoughts about this in Discord that I've summarized and put in this post in case anyone wanted his take on the proposal.
https://peakd.com/hive-169191/@unitmaster/vugtis-thoughts-on-sps-distribution-and-rewards
Don't see why we need to decay brawls seeing how it had such a long runway but whatever