Dear Sovryn Community,
A proposed SIP to transfer SOV from the Development and Adoption funds to Exchequer can be viewed here.
The SIP proposes the transfer of SOV for the purposes of SOV rewards, facilitating improved SOV trading and to further development of the Sovryn ecosystem.
The SIP is expected to go up for a vote in about one week.
Stay Sovryn
Hey,
more than 5 mil. SOV for rewards seems to be a lot. Could you provide a bit more info on how this size sums up?
In addition, could you provide some explanation why the total sum for rewards is so high right now? I imagine these rewards would be paid out over a long time and it could be safer to raise them once they are needed, not so far in advance.
Thanks!
Hey Sacro,
Total programmatic rewards for 2022 and 2023 come to approx 5.7m. This was during a bear market in which growth via rewards was limited in scope and value (both because organic activity was much lower and because the token price was low). If we are indeed in the beginning of a bull market, these dynamics will change and distribution of rewards is likely to yield better results in terms of growth (both in terms of product usage such as the AMMs and Zero and in terms of increased staking). So long as the distribution is below the emission rate first envisioned, I believe these rewards are a very important tool to encourage growth.
I think it is also important for Exchequer to have flexibility to support Sovryn’s expansion to other chains and ecosystems, in advance of the launch of BitcoinOS. This also includes the potential addition of additional assets being traded on the Sovryn DEX.
In short, SOV rewards are a crucial tool to support growth in an bull market environment, where many more Bitcoin native assets types and rollups are coming online. This is an opportunity that Sovryn needs to seize, and this means being aggressive. I will also add that I will only support the distribution of rewards that have vesting or transfer restrictions, so that the market is not flooded with SOV at a time when token price is important for growth.
Hope this clarifies - please let me know if you still have unanswered questions.
There are times for restraint - Sovryn has mastered that during the bear.
And there are times for growth. That is now.
Thanks for the insights! BitcoinOS is very exciting and perfectly fits the hottest field in the industry. It’s a good time to get more agressive.
Thank you for that great explanation.
Thank you Armando for this SIP proposal,
I will explain my point of view and why I think the suggested distributions are not right in my eyes.
First of all this comment in my eyes should be removed. Percentages for each of the actions should be mentioned beforehand for payments to partners, bug bounties etc. and the reason is the following:
66% of 6,157,121 coins went to contributors. thats 4,071,252. Can we have a detailed list of the exact amount of payment for each person? This will increase transparency and understanding of monthly payment needs.
500, YES, FIVE HUNDREND SOV were given on 2023 as part adoption Bounty. 500.
Here is my proposal on this for the suggested 2M SOV - Non-programmatic distributions.
70% goes to adoption and to adoption ONLY, to improve SOV profile, expand to new audience through advertisements, promos, twitter, youtube etc
20% goes to contributors
5% Development Bounty
5% Bug Bounty
If there is a need for increased % of Bug Bounty or Development Bounty, you take it from the 1M SOV Reserve .
Can you be more specific in terms of the % for each of the terms you mentioned? Is it something like:
80% Staking rewards
10% LM rewards
10% Bitocracy and expansion to additional chains
Will 1M SOV be enough for all these? what are the estimations of the needs of Tier 1 and Tier 2 exchange listing needs? Will the amount be sufficient if in the next months we list on Binance and Coinbase for example or we aim to low tier exchanges?
Hi Dante,
Thanks for your comments. My responses:
Bitocracy approves a top line budget that the Exchequer cannot exceed.
Exchequer provides periodic reporting as to is expenses versus the approved budget. In addition the Exchequer provides reporting as to how funds have been spend down to the resolution of circle but not individual contributor, for privacy concerns.
SOV distributions are limited to the emission schedule first published at TGE.
I believe that the above limitations achieve a good balance between transparency and ability to execute, and that this SIP proposal meets all limitations (Bitocracy approval for top-line amount, reporting provided as to previous distributions, adherence to emission schedule).
500 SOV issued as an adoption bounty is a result of the fact that adoption activities in a bear market are very different than in a bull market. This amount is expected to go up if it is deemed that these activities can lead to growth under current market conditions.
I agree with you and fully expect that a large amount of SOV will be used for adoption, but this can come in many forms: partner distributions, contests, co-marketing campaigns etc. I also expect that contributor distributions will be lower than 2023 because most contributors now have vesting schedules with exposure to SOV. On the other hand, with the launch of BitcoinOS, a large number of SOV needs to be reserved for bug bounties. To summarize, I hope you can see that the decisions on how to distribute these tokens, relies on multiple factors that change with time, hence the logic of giving Exchequer the latitude to decide how best to purse its goal.
This is hard to say, but if the staking rewards proposal is approved, I expect that a large portion (the majority) of these funds will be for staking rewards. It is also important to remember that Sovryn might be adding new tokens and new chains, all of which might require LM rewards to be kickstarted.
Again, this is hard to estimate as all exchange listing depend on a negotiation with the exchange, and our leverage can change based on many circumstances. I do believe however that 1M SOV should suffice for 2-3 listings on top exchanges.
Two last things that I want to highlight:
This SIP is requesting much less SOV that is available in the pools (less that 50%) as of this date. This is because one of the goals is to restrict to the extent possible, the supply of SOV.
Exchequer requires a certain level of discretion and contributors require a certain level of privacy. At the end of the day, Bitocracy is the final authority on what this discretion is and any change to it is always possible through a SIP.
Thank you for your comments and engagement, I hope my responses help clarify.
There are many points I disagree with, but since the SIP is out for voting already, better to leave it here. Happy to have discussion on DM with you Armando at a later point about this.
Are we not worried about dumping? We’ve lowered SOV rewards in the past due to this issue, it seems we are just dooming ourselves to the same issue we have been wiggling out of.
My personal inclination is FOR 
My arguments: For the development of BitcoinOS and to be able to cover the necessary expenses for the construction of a new L2 on Bitcoin, Sovryn will necessarily need to invest funds.
Showing that the community is willing to invest the necessary funds for the development of this new technology will attract the attention of developers and future venture capital investors, who may see a long-term future hand in hand with Sovryn.
The Financial Report showed us that Sovryn is slowly gaining traction and aims to be fruitful! Today we are the favorite project and at the forefront of the non-maximalist Bitcoin community. Today we have the legitimacy we have been searching for; and that I personally saw from the beginning of this journey in Genesis!
Today is not just another day, today, once again, we exercise our sovereign decision to support what we believe in, through decentralized mechanisms that prove to be functional. Bitocracy 3.0 is all of us, and we are all Sovryn!
This is not an easy path, much less intuitive! But Sovryn is proving to be up to the challenge of the major competitors. My vote is clear, I am informed, I am in touch with the team, and the team is in touch with the community listening to our suggestions and vindicating itself on the points that were once weak!
Commitment is crucial, transparency is elemental, and a committed community is the cornerstone! We have and are capable, intelligent, emotionally balanced people with great ambitions. Now let’s make the present what it is! A gift. A vote. A Bitcoinized future!
There has been a dramatic reduction is SOV rewards emissions.
So in 2023, the bearest of bear markets for Sovryn;
2.6m SOV was paid in contributor bonuses (1.9m) and contributor competitions (700k). On top of regular salaries I guess.
Is there some reasoning to that?
Who decides which contributor gets what?
Why should this (I’d say: very substantial amount) fly under the radar, not being mentioned, until report is made available?
But this SIP suggests increasing them again. I’m not certain how it affects SOV market, maybe negligible. It would be a pity to dilute during appreciation after all this time being beaten down, assuming it has any significant effect in that respect.
I voted in favor of the SIP, but reward strategy wasn’t really discussed at all. This seems odd to me. I mean we had a whole team working on this particular thing (Circle of tokens).
