The lower the yield gives investors less reason to hold OMM.
As stated previously OMM as minimal utility, minimal reason to hold it.
You will find a lot of the sell pressure is coming the borrowing and lending.
That may be to help pay off loans etc, however if the was a good reason to hold OMM. They may be willing to hold the OMM they earn from borrowing and lending.
I agree Omm needs more utility and hope they go in the direction of boosted Omm route so that OMM become the yield for long term believers.
However, I don’t think reducing OMM allocation for LP prevents such utility cases?
If the omm reward for lp-supply is reduced as suggested, wouldn’t it be a factor for lp providers to exit? Of course, the choice of whether to stop supplying lp due to impermanent loss will remain, but if the supply of lp decreases, liquidity will not be maintained as expected.
That is where additional 800K liquidity from the protocol comes in. Even if 1/3 of LP providers leave because the OMM rewards emission is reduced by 1/3, the protocol liquidity will make up for it and stay at the similar level of liquidity while significantly reducing OMM emission.
What might be the consequences of adding 800m for liquidity AND not reducing OMM emissions for LP providers?
I am thinking that what will happen is that individual LPs will still get less emissions on their hands because the protocol will be a mega LP. That will result in more OMM accumulation for the protocol (that it won’t be sold but accumulated) and the free market should take care of the rest?
Does that make sense?
At the moment I am inclined to only add the ~800m liquidity and not reduce LP emissions.
Should the method to reduce the omm reward for providing lp be accompanied? If the number of lp itself increases, won’t the rewards given to the current lp providers decrease by itself even if the omm reward does not decrease?
I personally think adding 800K liquidity and reducing OMM emission for LP providers will decrease the sell pressure more than just adding 800K liquidity.
If adding 800K liquidity and reducing OMM emission can accomplish the goal of having a similar amount of liquidity while reducing the sell pressure furthermore, why not go for it?
Off course, but at the expense of potentially scaring away normal LPs. I would just add the 800k liquidity and see what happens, probably the market will sort it out?
By adding POL 800k, LP providers will be earning less, then removing extra emissions from LP.
Recipe for disaster!
LP providers will sell their OMM and move on.
LP rewards and staking rewards are the only utility, aside from governance.
The real issue that needs to be addressed is investors need a reason to continue to hold OMM and for new investors to buy OMM.
I actually disagree. I think with POL and less sell pressure, OMM is going to become more scarce to earn and people will start to sell less and less. I saw that OMM token price bounced back recently and think POL + OMM emission reduction will be a good start for OMM price to bounce back.
I agree that POL is a good move. Either in house or with Karma. The DAO funds should be doing some to generate revenue.
You are correct in saying there will be less sell pressure, but to get an increase in price. You need buyers.
Why would a new investor purchase OMM? Or why would a current investor purchase more OMM?
I think that OMM intrinsic value has to be discovered by the market, when you hold and stake OMM you are holding a peace of the protocol + voting rights + an ICX voting mega booster, in the near future you would also be holding a multichain money market, that’s a lot of value in my opinion.
The fact that OMM does not pay you to hold it it’s not that bad from a long time horizon stand point. It means the DAO is collecting a lot of money that does not end up on holder’s hands, hence it compounds back into the business. This is why Warren Buffet is not a huge fan of dividend paying stocks.
In fact BALN price is not doing great (I also hold it) and Balanced offers a nice return.
I don’t want to drive the conversation too much away, just want to share my thoughts on why OMM price should not be the main focus, although I do like the idea of bOMM to reward long term holders.
Having said that I think we all agree that POL makes sense, so why not starting there and then deciding if we also need to lower LP emissions (wich I don’t agree at the moment because we would “scare them away”).
TLDR: We shouldn’t make protocol decisions based on the token price. POL and bOMM are good ideas in my view.
To be honest, since the number of tokens issued by Omm itself is very large, I think the downward pressure is an expected result. Under these conditions, there is no doubt that pursuing two complex compensation limits will be effective as this proposal is proposed to slightly alleviate the downward pressure on the price.
Nevertheless, I would like to ask, how about re-voting for Result 2 after implementing Result 1 first and then seeing the progress rather than making these changes all at once?
Yes I agree. POL and bOMM are great implementations!
The big thing is that the DAO funds are mostly OMM, the lower the value of OMM, the lower the value of the DAO.
I do think POL is a good mechanism in general. Perhaps it is a good idea to start off with POL with the protocol fee + OMM Rewards, monitor LP activities, and consider reducing OMM rewards for LP portion after a while?
Yeah, definitely start small and test the waters.
I 100 percent agree with Rook about not making protocol decisions on the price. Zoom out and think about the big picture. It is too easy to get caught up in tomorrow instead of thinking about 10 years from now.
I agree, but with the DAO fund 2/3rds OMM.
The best solution to increase DAO funds (value) is to provide reason to hold or buy OMM.
If OMM was to increase by 10% in price, that is a significant increase in DAO value.
I wouldn’t be pushing this point if view of the DAO wasn’t 2/3 OMM.
I know not everyone likes my point of view.
But please tell me if I’m wrong?
ok I will post the proposal on OIP without reducing OMM rewards for LP providers.