Dear Omm community, following on from our previous post (Introducing Karma Finance) and working with the Omm early contributors, we’d like to make a governance proposal to initiate the launch of 3 OMM Bonds via Karma Bond for the Omm protocol:
The Omm community’s involvement in the launch of these 3 bonds is essential and we welcome your feedback.
There are 4 statements we would like you to review and vote on.
Capped discount
Bonds will be capped with a maximum bond discount of 10% with a 7-day vesting period, in order to reduce discount slippage. The more in demand a bond is, the more the discount will decrease and vice versa the less in demand a bond is, the more the discount will increase until hitting the maximum 10% threshold. You can find more explanations on how the discount is calculated here: Frequently asked questions - Karma Bond
Max payout
Max amount of OMM sold to user per bonding action will be 250$ worth of OMM, representing 2.5% of the available OMM in each of the 3 offered bonds. A user can buy as many bonds as they wish but each transaction will be capped at 250$ worth of OMM.
Max OMM available per bond
Each bond will contain $10,000 worth of OMM tokens in exchange for either OMM/USDS, OMM/IUSDC or OMM/sICX LP tokens. This is a total amount of $30,000 worth of OMM tokens.
Target start date
Proposed launch date of all 3 bonds will be 1 September 2022 at 14:00 UTC.
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These Karma Bonds will provide an initial diversification of the Omm treasury with Omm becoming the first dApp on ICON to adopt Karma’s protocol-owned liquidity as-a-service offering. The Karma Finance and Omm early contributors look forward to hearing the community’s thoughts. See you in the comments below!
All sounds great to me!! This is a huge step forward for Omm. It should significantly reduce sell pressure on OMM. Really look forward to this vote going live. Hoping to see it approved by a landslide!
I believe it is critical to emphasize the behavior of bond price (discount) and how I believe it should be configured.
We can configure bond sensitivity, which affects how the price (discount) behaves when users do bond trading (or not). Shortly, high demand will raise the price, resulting in a lower discount, and vice versa.
You don’t want too sensitive bonds because each bond lowers the discount significantly, and you don’t want a numb bond because the discount rises too quickly and the protocol sells too many tokens below the price. If the bond discount is capped, the price will naturally stop there.
Since this is going to be the first launch of POL on OMM and there is going to be a lot of noise around it, we want to payout OMM for the fairest price possible meaning just above 0%.
The target payout value is $10,000 per pool (bond), and we anticipate that bonds will be sold out within 10 days.I believe that configuring bonds to stay around 0% on average if $1000 OMM per day is promised to be paid out is the best way to go because users will try to take advantage of discounts as soon as they appear feasible, but the time period of 10 days will still allow multiple participants to participate. If the bond was less sensitive, the discount would be too high and the bonds would be emptied too quickly; if the bond was too sensitive, the target bonding period would be extended.
If no one were to bond for 24 hours on average, the bond discount would rise by 13%, or 0.45 per hour, up to the maximum discount amount (if limited).
Excited to see how bonds can help Omm protocol maintain more of its own liquidity, making it more self sustainable. Thank you @hyper_connect and @Robi for putting up such a thoughtful proposal and details. Hope the Omm community is also excited about Karma bonds!
