YIP: Decrease no-rebase interval to privide low volatility and sustainable growth

YIP Title Goes Here

Basic Summary
Lower the no-rebase interval from 0.95 - 1.05 to 0.995-1.005. The exact interval is discussuble.

I suggest to think about narrowing (or even cancel) the zero rebase interval. It is artificial and has no sense. Money flow and economics is smooth and continious with no such consrtaints.

This will make sense in holding YAM when price is in no-rebase interval, because some people begin selling where is no rebase causing panic sales. And also it will make it more stable around peg price - that is cool because we want YAM to be money.
The best thing is that very small positive rebase is able to provide sustainable MC growth WITHOUT panic sales. For example: if the price is 1.005 for a year this will increase MC by x1.44 ~(1+(1.005-1)/10)^(365*2). The more people use YAM as means of payment (because it is very stable) - the more MC grows.

This change is not hard technically: have to change two digits in protocol whithout changeing any logic of how it works.

What do you think, about it?

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Hi Nick, thanks for posting.

I disagree with some of the premises that you base this proposal on, and therefore don’t think this is a good idea (or at least not worth the effort to change).

I don’t think changing the no-rebase interval will make YAM more stable. I don’t think it will do anything. As we have seen the price will swing pretty widely between $0.60 and $1.30. This comes from the fact that YAM is a speculative investment and it doesn’t take that much to move the market. Adding in tiny rebases around 1 dollar is like trying to stop the tide with a bucket.

I agree with your first sentence, but your logic with the math seems to make assumptions that are not valid. As I mentioned above, the price of YAM will swing. Your assumption that the price can stay at 1.005 for a year is not supported by any evidence. It will swing up and down just like before because some people will buy yam and others will sell it.

I agree that we want to see steady growth, but that steady growth can only come from consistent value accrual. That value accrual is revenues. And with that there will still be big swing in confidence that push the price up and down around the peg because this is crypto.

One last note is that the goal of YAM is much less to be a means of payment and much more a claim on the output from the YAM treasury.

HI rossgalloway!
Thanks for replying!

I fully agree with you that Yam is a speculative asset. My consumption is the following:
PPL want to get profit -> a smal ammount of yam bought -> price goes up -> positive rebase -> YAM sold -> price dump.
In this scheme to get the profit the price should be pumped more than 1.05. This is 5% for the asset that is designed to be a stable coin. It is too much. And when somebody fixes profit the price is droped too much, because the rebase was too big. This causes panic sales and the price goes much lower than 0.95. Everybody suffers from negative rebase, except the one, who started that chain (who sold the first).
In my opinion, if the rebase will be ±0.005 of peg price, ppl will fix profits at 1.01±0.015, with more stability and sustainable growht of MC. WHY? because treasury will always grow (a little bit) and never sold. And the MC is Treasury value multiplied on some multiplicator, that is not known now, but it seems that it is from 3-5. Thus I’m fully disagree with that YAM is ‘more a claim on the output from the YAM treasury’.

My concern is that this would essentially make Yam a permanently inflationary asset, and that inflation would inherently dilute Yam holders over time. LP providers would be able to offset that dilution somewhat whenever the treasury sells Yam into the LP, but otherwise I just don’t see how this would be better in the long run for Yam token holders.

That said, I appreciate you putting the idea out there and opening it up for feedback and discussion! :slight_smile:

I’m not sure we are interpreting this proposal in the same way. My understanding is that all it does is make it so there is basically no interval where we are not rebasing. Or am I missing something?

Yes, you are absolutely right. I propose to narrow (or even eliminate) no-rebase interval.
I think that this will prevent us from manipulative pumps and dumps (this scenario of pump-dump is frequently repeated by AMPL team, causing FOMO-buys at relatively high prices, ppl buy from team mainly and then the team cashes out,causing panic sales).