I have considered whether I want to post this here or as a new post. In the end I decided to put it here since I don’t want it to appear that I am making a competing proposal. This is almost the same proposal with concessions to those who want to keep the rebasing mechanism.
Modified Rebase Removal
- We stop the Rebase Now.
- Create a rebasing token experimentation lab with treasury funds.*
- Provide funding from the treasury for research into an improved token and treasury funding mechanism.*
.*points 2 and 3 can be agreed upon in principal and exact amounts can be determined in additional proposals
Here is the original RFC about rebasing: RFC: Replace Yam Rebase Mechanism
Support for removing the rebasing mechanism seems to be strong in the community, but with a few vocal opponents. The main opposition to the proposal is from people who feel like the experimental nature of the rebasing mechanism has not been given a chance to play out. Another opposition point is that the 3% inflation rate that is proposed is arbitrary and further study into the way we fund our treasury is warranted. Both of these factions can be appeased with promises of funding from the treasury.
We can stop the rebasing mechanism now, with the understanding that the funding mechanism for the treasury, as well as the overall tokenomics and economic model of YAM are still being studied. YAM holders are incentivized to find a funding mechanism that is better than the status quo of no funding via inflation. At the same time, research on rebasing can be funded as part of the YAM factory and new rebasing tokens and designs can be worked on.
The most difficult part in the governance process is determining whether consensus has been reached on contentious proposals. This is especially important in YAM, since governance by fork is severely hampered by an un-forkable treasury. As the YAM treasury is central to the value proposition of the YAM DAO and the YAM token, the only option for disgruntled YAM holders is to suck it up or to exit.
With proposals that are contentious, this is a losing proposition for all sides if it means the losing token holders will be disgruntled or exit. This should drive all YAM holders toward better understanding each other’s positions and some kind of compromise.
This modification to the rebasing RFC is an attempt to modify that proposal in a way that incorporates the desires of multiple stakeholders. In fully pausing the rebase mechanism and the treasury funding, those who worry about the value that the treasury adds and dislike the treasury sales will get a reprieve from them and time for the treasury to prove itself.
It is then up to those who see value in the treasury to build that value. This is through products that generate revenues that go back to the treasury, but also potentially through the design of a new funding mechanism that YAM governance can choose to implement. If that mechanism is not deemed valuable enough by the community then it won’t pass. If we can’t convince people why funding the treasury with inflation is valuable once it has been turned off then we probably shouldn’t fund the treasury that way. Otherwise we can always vote in 3% inflation in the future. Or just do 3% now and fund additional research.
So let’s use some of the value in the treasury to make more value. Funding a rebasing arm of YAM Factory could lead to new experiments and revenues to the treasury. This should be a decent amount of the treasury. I propose 10% (~$300,000) but that is a pretty arbitrary number, and if people like this proposal, this should get further discussion. We could also earmark some percentage of future revenues toward rebasing research. I nominate KW710 as our first rebasing mad scientist.
At a much smaller scale, I think it is in the DAO’s interest to fund further research into the funding mechanism for the DAO and the tokenomics in general. Questions around the value and purpose of YAM will still continue after decisions are made about rebasing. We need to figure out an economic system for the YAM token and ecosystem that benefits all YAM holders. I propose that we set aside funding to have an outside report written up to do analysis on our current system and proposals on a new system. Delphi Digital have done reports like this for multiple other projects. Here is a report they did for the dxDAO. They have also been working with dxDAO to research their token model and bonding curve.
Pros: I think there will be less unhappy YAM holders. Incentives are more aligned. Funding toward rebasing and funding could generate significant return if successful.
Cons/Risks: Removing treasury funding risks never being able to turn if back on again if it can’t pass governance. Treasury funds allocated toward rebasing research and token research may not lead to any significant return.
Developer light to implement. The scaling factor would be fixed at a specified time and the rebase function deactivated by calling this function:
Making it so no address can execute rebase
Details regarding funding of the rebase research arm and funding mechanism can be made in principle with a general range of funding approved and finalized in later proposals.
Poll to Measure Sentiment
Do you support removing the rebase mechanism?
Do you support removing the rebase if there is no treasury funding mechanism in place for now?
- no, we should have 3% inflation
- no, we should have something else though
Do you support removing the rebase if NO funding is given to future rebasing projects?
Do you support removing the rebase if funding is given to new Rebasing projects?
Do you support removing rebase if NO funding is given to design better YAM tokenomics?
Do you support removing rebase if funding is given to design better YAM tokenomics?
How much money should go toward rebasing research?
- < $100,000
- $100,000 - $300,000
- .> $300,000
How much money should go toward tokenomics research?
- just enough for a 3rd party report
- more than that