Buying Omm Tokens with Voting Rewards

The purpose of this proposal is to help create some buy pressure for the Omm token by buying Omm Tokens from the ICX rewards generated from the votes. Shoutout to community member #noob1965 for suggesting the idea.
In order to structure this, Protokol7 (Omm early contributor), in collaboration with the Omm monks, will be setting up a separate node for this purpose. The community will then be able to direct their votes to this P-Rep (Omm Community P-Rep) when staking their Omm Tokens. I propose that any new voting power that is not delegated be directed to the Omm Community P-Rep. Currently undelegated votes are evenly distributed amongst the early contributors.

Further details & Fee structure
The Omm community P-Rep will buy Omm Tokens from the ICX rewards less any associated costs (refer below). The Omm community P-Rep will buy Omm Tokens on a weekly basis, with 60% of those Omm Tokens being staked, and the remaining 40% being transferred to the Omm monks multisig to be held.
As people may know, setting up and running a node isn’t cheap, especially in the ICON 2.0 environment. Refer below the breakdown of costs:

A. 2000 ICX that would need to be burned
I propose that this be funded by the Omm Dao Fund

B. Node handling fee
This will be a fee going to Protokol7 for running and managing the node. The fee will depend on how much voting power is delegated to the Omm Community P-Rep but the fee will between USD 200 ( minimum) and be capped at USD 2000 per month. This will be funded from the ICX rewards generated.

C. Bond 5% (optimal)
In the new Icon2.0 environment all P-Reps will need to put up a bond. The optimal ratio of the bond is 5%, though P- Reps can post more or less. The biggest hurdle in executing this proposal would be finding the funds to put up the bond. Utilizing Omm protocol revenue will not be sufficient. Hence we would need the assistance of the Omm community to help with putting up the bond (open to suggestions).

D. Server maintenance related costs
The costs to running a node would roughly be around USD 1000 per month. I propose the first 3 months of server costs to be funded by the Omm Dao Fund.

Summary of agenda items in this proposal that would need to be voted on:

  1. Propose that any future votes that are not delegated to be directed to the Omm Community P-Rep
  2. 2000 ICX that would need to be burned to be funded by the Omm DAO Fund
  3. Cover the first three month server maintenance costs of USD 1000 per month from the Omm DAO Fund.

Total cost in Omm Tokens requested from the Omm DAO Fund will be 52,200 at the time of writing this.


Cool idea from noob1965 and a very good write up Arosh!

Definitely interested to see what people’s thoughts are on this one. I don’t think it’ll have a big impact on the OMM token price but I think it’s definitely a move in the right direction. With enough people delegating their OMM voting power to this potential new P-Rep, it could add some decent buying pressure over time

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Hi Arosh. I really like this idea for 2 reasons:

  • Adding another block producer to ICON 2.0 with the incentive to fully bond their ICX, further securing the ICON network
  • Purchasing OMM and staking it, acquiring more votes and ultimately more buying power to acquire more OMM

What this ultimately means too is that it’s essentially community owned liquidity. A very cool concept.

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I like the idea. Is it possible to make two or three scenario’s in which the income will be calculated (delegation x price ICX) to create an possible impact scenario. Setting up a node can be time costly. If it is a time consuming task and it will be of little impact than it is possible not worth it.

Second, what happens with the OMM tokens? Will they flow back into the DAO fund after subtracting cost?

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I think having a community based P-Rep is a good idea. However, I don’t think staking the purchased OMM is the right way to go about it because it takes value away from other OMM Stakers.

More staked OMM = less staking rewards and less voting power (both governance and control of ICX votes) per OMM.

What I suggest is to purchase OMM, then distribute 60% of it directly to those voting for the node, similar to how the IAM and GangstaBet nodes work. The other 40% would go to the Omm Monks multisig. I think this would have the following effects:

  • Creates buy pressure for OMM. Yes, some of it could be sold back after distributed, but I believe it would still be a net positive.

  • Adds value for OMM Stakers. One of the primary ways that the Omm token currently derives its value is the ability to direct ICX votes. Stakers can direct their votes to a node like IAM and profit directly (last I checked, directing votes to IAM was adding 20% APY). Giving 60% of rewards to voters would provide a better option for Omm Stakers to vote for, while also providing value for the platform (40% goes to the monk’s wallet).

  • Provides incentive to vote for the node, including drawing in voters from outside of the Omm platform. IAM and GangstaBet are top 10 nodes for a reason. I know that with the original proposal I would still delegate my staked OMM to a node like IAM or GangstaBet because it is most profitable for me personally. What I would like to see is an option that is profitable for individual OMM Stakers, while also benefiting the platform.

Yes we could come up with a few scenarios.

So 60% of purchased omm tokens is staked. The balance 40% goes to the monks multisig to be held.

But may need to rethink the strategy of staking such a high proportion of the purchased Omm tokens, as it would potentially disadvantage other omm stakers and also it would need to add more resources to the bond.

One option is to instead of staking we could return a portion (higher) back to those putting up the bond, and to those delegating votes.

Thank you cryptoKnight for the suggestions . I agree with you. We may need to relook at the restaking option or atleast lowering the amount of Omm we restake.

@Arosh just wanted to provide an alternative idea:

  1. 60% of ICX node rewards go to protocol-owned liquidity
  • 50% of this portion is used to purchase OMM tokens, which are then paired with the other 50% in ICX to provide liquidity on the Balanced DEX
  • this LP position should not be staked, but rather just held to build liquid markets for OMM trading
  1. 40% transferred to the Omm monks multisig

I don’t think OMM should be distributed to voters as most Omm P-Rep votes will likely come from OMM stakers. OMM stakers have a direct benefit from the buy-pressure proposed above, and them farming the rewards could have a neutral effect on price.

I also don’t think any of the OMM purchased through this proposal should be staked, whether that’s an LP position or Pool2 method. This would take away rewards from community members which I think could have a long term negative effect.

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I wouldn’t support this for a few reasons.

  1. In general, I’m against ICON DeFi platforms running their own nodes because it doesn’t bring about any increase in decentralization. Pretty much all the teams associated with Omm (ICX Station, Protokol7, Ibriz, Parrot9, etc.) are already running nodes themselves.

  2. If you’re going for the “community-run” perspective, then I think it’s just a branding thing because a node can’t be run by the community. At the end of the day, it requires a single party to sign up for a cloud account, launch the server, pay for it, and be liable for it. Thus, the “community-run” aspect of it is just for branding. In this case, Protokol7 will be running the node, and they already have a node. It doesn’t matter if its pitched as community-run. If they run the node, they have control of the private key for that node. Also, would Protokol7 be liable for the tax consequences and are they okay with that?

  3. I don’t think the price of OMM needs to be artificially propped up. Furthermore, with the recent cut in P-Rep rewards, the additional buy pressure would be minuscule – maybe a few hundred dollars a day? Instead of propping up price, I think P-Rep rewards could be used for user acquisition tactics instead.

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Hi Brian thank you for the comments .

Points 1&2

I was and still am an advocate of the monks running a node. This would certainly help to push the decentralisation narrative as well. So this is something I want the monks to do at a later date, but given the unknown variables of running a node in the icon2.0 environment and I thought it was best have an existing P-Rep to run the node. In terms of the tax implications, yes protokol7 is taking on that liability. Dwelling into more of your point on decentralisation, yes on the face of it , this arrangement with protokol7 doesnt make it more decentralised. But given how protokol7 operate , their professionalism and the fact they are early contributors to the protocol they are definitely aligned with the best interests of the protocol.

Point 3
I agree the actual buy pressure this would create remains to be seen, and it possibly may not have a material impact as you said . However I feel it’s worth a go, and if it does not have the desired effects we can use the bought back omm tokens for other endeavours and future rewards can be utilised as how best the community sees fit.

TJ thank you for your input. Much appreciated.

The main reason behind staking omm tokens was to increase the rewards. But this would also increase the required bond as well and also will negatively effect other omm stakers. So will have to relook at staking the bought omm.
I love your POL option.

You have my vote on this @Arosh i really like it.

However I think the OMM purchased should be supplied rather than staked.

Just so it’s not taking away rewards from the community.