Sovryn Tokenomics - Taskforce

[Sacro]

Hey, after digging into tokenomics today, i want to share a first comment. Please note that I will provide full spreadsheets later on, this is just a first draft and meant to provide some graphics to our discussions and thoughts. I did not have much time since this morning.

The thoughts are based on official tokenomics data that can be found here SOV Token Emission Schedule - February 2021 - Google Sheets

I believe we are in month 15 now. According to the official data, I identified the funds that have the highest token emission:

Founders Fund: 833.333 tokens per month until month 36 (02/2024)

Ecosystem Fund: 233.585 tokens per month until month 24 (02/2023)

Adoption Fund: 1.129.400 tokens per month, going down each month until 20.000 SOV in month 69.

These 3 Funds are the ones that I changed in the chart below to see what could be possible.

In addition, there is:

Early Funders: 731.121 tokens per month until month 24 (02/2023)

Development Fund : 250.000 tokens per month, tickling down each month until 2900 SOV in month 83

I did not change these 2 funds at all, they are here for the sake of completeness. I did not touch these in my calcs because these tokens are vesting and belong to investors already or they support ongoing development. There could clearly be a discussion whether it’s fair or even possible to alter the founders fund as these tokens also belong to individuals. I am not sharing my point of view here, I try to analyze this in a rational way and provide data for discussion…

When looking at the charts, you can see that the token inflation is really high right now and that 3 million tokens become liquid each month. I adjusted the vesting periods of the founders fund, ecosystem fund and adoption fund from month 15 onwards. Their emission schedule gets much longer, with a reduced amount of tokens unlocked each month. These numbers can be changed to whatever, but this first test achieves the following keynotes:

Reduction of new SOV supply in month 16: 1.8 million instead of 3 million. This reduces token inflation by 50%: Instead of 6% overall monthly inflation, only 4% overall monthly inflation.

Reduction of new SOV supply in month 25: 1 million new SOV instead of 2 million SOV. Overall inflation reduced to 1.9% instead of 2.8% in that month. There is no buy back, lock up or burn yet. This can be added based on feedback. This just stretches the emission schedule as can be seen on the x-axis of the charts.

This is just a first step to show where this could lead if there’s a consensus. Additional steps like lock-up, buy-backs and so on can be added.

I would like to add that as Sovryn is a project with a longer time-frame than 3 years (where 90% of supply is liquid), it could make sense to change the tokenomics in a way that also supports longer timeframes. The difficulty is that a lot of funds already belong to someone and the emission is impossible or extremely difficult to change. The easiest would be to do it via ecosystem fund and adoption fund.

Hi @bananas_in_the_sky , great perspectives! Looking forward to our joint effort and discussions!

[dseroy]

@Sacro I’d like to assist. Will review all comments and see where we can collaborate. I’d like to enlist @Martin_Adriaan as well. Any BCW members that have experience in areas Yago mentioned or have familiarity with outside project tokenomics would be great to have on too. For anyone not familiar with Sovryn protocol, I’m happy to elaborate on any areas of Sovryn which you may not be as familiar with.

@yago can you recap for us which parts of tokenomics can be modified without needing to re-issue and effectively fork? This will allow us to know what variables we can play with.

Thanks

[lactarius]

I believe that the community does not understand tokenomics. That’s why I have asked twice to make an AMA about it, before all this happened.

Maybe you could ask the community what they don’t understand, what their doubts are, and help them understand. Educate them.

At the same time I would find out how many people want to change the tokenomics and in what way, because it could be that they are asking for different things, or repeating what one person is claiming, without even understanding it.

[Sacro]

Hi,

i found your write-up with regard to tokenomics and bitocracy security very fascinating, i did not think about it like this before. If we propose a SIP some time in the future, this should definitely be included in the arguments.

I’m currently digging not only into theoretical tokenomics but also the practical side: which part of the unlocked SOV gets sold each month, and who is not selling. It may be that the founders fund, while huge, is not the reason for current selling pressure. This needs to be identified so that our solutions will have a meaningful impact and so we push the right buttons.

I will try to create a data set or at least get information with regard to the different funds, their schedulded emission and their real emission/holdings. I will try to talk to exchequer/Core team and ask what they think which parts of tokenomics can be changed at all due to vesting/being property of users already. This would basically be your step 1 from your post and part of step 2.

If you’re fine with that, it would be great if you could do some research towards your point III) fortify bitocracy and, if appropriate, also do some digging with regard to part 2. I think this could lead to a valuable base for a discussion with the community once we have that info.

[bananas_in_the_sky]

Hi,

Sounds good. I will look into step 2 and 3. I will also ping you on discord to potentially catch up over a quick call regarding step 1.

[bananas_in_the_sky]

Adoption fund contract

Hey @Sacro, as mentioned yesterday, I looked at what I believe is the adoption fund contract (0x0f31CFd6Aab4d378668ad74deFA89d3F4DB26633).

I summarized what I found in this spreadsheet: Sovryn - Vesting schedule implied by contracts. The sheet also has these two plots that give an overview on the vesting schedule implied by the contract:

Assuming my understanding of the functions and state variables in the contract is correct, I see the following key points:

• Out of 37,222,240.20 SOV that were originally in the contract, 17,494,453.11 SOV will be fully vested by May 8th, 2022 and could theoretically be retrieved fully by the unlockedTokenOwner.
• Out of those 17,494,453.11 fully vested SOV, 7,568,522.11 SOV are still in the contract, the rest has been moved out in October 2021.
• The (monthly) vesting schedule implied by the contract does not really reconcile with the adoption fund vesting schedule listed in the official SOV Token Emission Schedule - February 2021. Possible that I miss a point, would be good if somebody who has a deeper understanding could provide context (@dseroy maybe?)

Development fund contract [Section added on 08/04/2022]

@Sacro, I did the same assessment for what I believe is the development fund contract (0x617866cC4a089C3653DDc31A618b078291839AEB). I updated the spreadsheet: Sovryn - Vesting schedule implied by contracts. The following plots give an overview of the schedule:

Key points:

• Out of 8,368,597.68 SOV that were originally in the contract, 3,765,869.01 SOV will be fully vested by May 8th, 2022 and could theoretically be retrieved fully by the unlockedTokenOwner.
• Out of those 3,765,869.01 fully vested SOV, 1,534,242.93 SOV are still in the contract, the rest has been moved out in October 2021.
• Same as for the adoption fund, the (monthly) vesting schedule implied by the contract and the total amount that was originaly held by the contract do not really reconcile with the development fund vesting schedule listed in the official SOV Token Emission Schedule - February 2021. This is a point to follow up.

Post change log

• edit 1 (07/04/2022): fixing some typos in figure 1
• edit 2 (08/04/2022): (i) added development fund section to the post to keep the analysis in one place, (ii) added headers for post readability and changed name of google sheet
• edit 3 (09/04/2022) fixed a mistake with dates (original post was off by 1 month, the reported amounts were for may 8th, not april 8th)

[Sacro]

Hey @bananas_in_the_sky , really great info there!

with regard to the movement in October, i believe it was related to this SIP

SIP-00XX: Completion of SIP-0015 and Additional Release of SOV

It exactly states 9.925.931 SOV from the adoption fund, right on spot.
Can @dseroy or another exchequer member give an update how much of this is still held by the exchequer and what part has been sold/distributed?

• Are these 9.925.931 SOV actually those tokens that currently pay the liquidity mining / liquid SOV rewards?

According to SOV Token Emission Schedule - February 2021 - Google Sheets the adoption fund is the only remaining fund, which tokens enter a 10 month vesting after being issued/claimed.

• If we have ~17.500.000 fully vested tokens by end of the month and of that, 9.925.931 held by the exchequer and 7.568.522 tokens that are still in the contract, we must assume that these tokens have not been used for liquidity mining.

• So an additional assumption could be made that all those tokens are yet to be distributed to anyone and that they do not have individual / 3rd party owners yet. That’s a very interesting find.

By the way, the emission schedule states 38.646.017 adoption fund SOV, so there’s a difference of 1.400.000 SOV between your real data and the spreadsheet data.

The liquidity mining and Staker rewards make up ~450.000 SOV / month with a pretty constant rate over the last months (Liquid SOV for stakers beeing the only variable that changes constantly) so it makes sense that there are a lot of yet to be used adoption fund SOV, held by the exchequer / bitocracy.

If our posts are correct, i understand the comment from @yago that the distribution of tokens has already slowed down. And it would provide an argument that it makes sense to get a SIP with regards to tokenomics done as we seem to have so much more supply than demand and a lock-up can make sense.

edit: typos, form

[DMAN]

@CrypTut

Hi Yago, great that you still want to talk about.

However, the proposed SIP from yesterday had really valid points and a lot of people in your community say they are in support of it.

From the AMA you did, I thought you suggested to lock tokens for 10 years?

Then there is the suggestion to change the time lock on staking, as you also posted here.

And… the need for change of User Interface/Experience, which seems to be agreed upon by all.

So why do you want this task force? A majority of (y)our community already told you they would like to see these changes being implemented. A minority with the majority of the tokens and VP maybe don’t. You see where I’m going?

It feels only Sovryn to talk about it, sure… but changes (that where suggested) are really needed to make us more Sovryn. That can only be achieved if you’re really prepared to meet your community half way, because we all know you hold the VP amount against the community in numbers. Based on the AMA I felt you was going to meet your community, but now I feel that I am not convinced yet. On this point I am not the only one and that’s important. Community remembers, like a bunch of elephants

So let’s keep talking Yago, but let’s not change the narrative on the three points that so many of us ask for. And please don’t be mistaken: we all Sovryns and Sovryns are in for the long run. Only long run doesn’t mean not having short term expectations and vision to steer us away from all the trouble our beloved project finds itself in. And let’s agree that Sovryn is in trouble.

Thank you.

Let me tell you why, even after proposing it as willing to accept the 10 year lockup of the team tokens and others that dillute the tokenomics, Yago is not willing to accept it:

His modus-operandi is if he disagrees he doesn’t directly tell you like myself “go fuck yourself, I’m not going to do it”. In a honest, but confrontational way.

No.

Yago treats you for an idiot and uses his manipulation technique by simply saying “we will discuss it” we need to do a task force. We need to think about it.

EVEN AFTER you showed him with huge majority what you want.

As long as he doesn’t want it or he can’t call some big wallets to vote in his favor that are not known as team wallets (think of Pomp and such)… he will be doing “daos”, “task forces”, “discussions”…

until a point when in such discussions will remain only people who are so bored they have nothing else to do than to be a forum granny… and finally accept whatever he proposes.

You can vote now 100:1 in favor of a sip, he will still create these measures designed to manipulate you.

What’s the point of the SIP structure if sip is not good enough to make decision but he needs a task force or a dao to judge on this one in particular (the one that doesn’t come from him and touches his sensitive part).???

[dseroy]

@Sacro @bananas_in_the_sky thanks for driving this forward! I’m in Miami with a few team members so haven’t been able to dive into this yet. I’ll have to try and review as soon as I get back.

Let’s keep noting down any questions then we’ll consolidate and get answers from Armando/Exchequer.

Great work!

[hyperboreyan]

@DMAN

What’s the point of the SIP structure if sip is not good enough to make decision but he needs a task force or a dao to judge on this one in particular

Sorry to be a wet blanket. Writing a description for this thing for general audiences is bloody hard.

[yago]

Awesome work so far! Graph is mostly implemented, so we can give you guys early access.

I’d like to set up the first tokenomics meet next week. Does 4PM UTC work for everyone, as a general time?

[Sacro]

Sure, i’m very excited!

Honestly 4:30 PM or 5 PM would fit me much better in general but i could certainly arrange that as well.

[bananas_in_the_sky]

yes, 4pm utc generally works quite well

[dseroy]

good for me as well. thanks

[DMAN]

Lol “task force”

You don’t need any task force. You internally hold bunch of problematic tokens, burn if you wish to burn, you don’t listen to any task force anyway so why forming them? To make them feel significant while they achieve nothing?

Burn your 50% tokens
burn the adoption pool
And at least cut the development pool in half but burn it entirely, you have the dev funds already.

Bam. Done deal.

[dseroy]

I’ve been book-marking threads on Twitter. Haven’t dived into these yet but posting here for reference:

0xSong

Packy McCormick

[yago]

All - We should have a kickoff call for the taskforce. Well overdue.

We can meet tomorrow in the Community Discord at 4pm UTC.
Don’t worry if you can’t make it - there will be others.

@dseroy @Sacro @bananas_in_the_sky @lactarius @hyperboreyan @Sitizen @CrypTut + anyone else who wants to join.

Please add below any agenda topics you would like to propose.

I would like to discuss trading rewards; token lock up and analytics.

[Sacro]

Sure!
We have done some work already and we can give a brief overview of that.
I would add LM rewards to our discussion. Changing reward sizes between AMM pools, reducing rewards overall or making rewards instantly liquid could be discussed.
There’s a lot that could be done but we also tried to find solutions that can be implemented relatively fast without taking away dev-time and it would be good to have your thoughts on that.

[Bon]

Was this first kickoff call open for everyone and would it be possible to get a summary of what was discussed or if anything was decided on how to move forward?

[Sacro]

Hey,

the call was held in the Sovryn Community discord and it was open for everyone. We also have a recording that probably will be published.
I am in the process of writing several forum posts with regard to our new Sovryn Circle that was created during that call. A summary will be there, too. Should hit the forum this week.
As a sneak peak, we discussed reducing or changing liquidity mining rewards in various pools, instant liquid LM rewards, adoption fund token lockups, identifying selling pressure and even voluntarily locking up founder SOV tokens through ZERO. All these things can now happen with proper on-chain monitoring through the amazing Sovryn subgraph. Exciting times ahead. Expect more updates SOON.