Car54 I believe what he means is that reduction in Annual Percentage Yield (APY) terms is a yield projection based on 1 year. Practically, the returns you realize are relatively short-term (measured based on daily or weekly ROI). This is why the following ROI expectations were included in the original proposal.
A 0.35% Daily Reduction.
A 1.87% Weekly Reduction.
13 more days to double your sKLIMA balance.
Sirob So basically as a user, you'd always weigh whether market buy or bonding gives you the highest return
So based on @optima example - say now 5-day rebase yield is 8%, and for bonding to make sense for you, you require at least a 5% ROI on your bond so that you net higher returns when you adopt the 4,4 strategy as compared to a regular market buy and stake strategy. And you check this with the bonding calculator.
Now when we reduce our staking APY such that 5-day rebase yield is 6%, this will increase demand for bonds. This increase in demand pushes bond price up to a new equilibrium, where the ROI of bonding is reduced to 4% but profitable enough for an actor to continue to 4,4. As a result of the decrease in bond discount, all else equal, the protocol now effectively pays less for the same assets it buys. As for stakers, they still get the same rewards but 13 days later (based on proposal). In other words, lowering the APY allows the protocol to incentivize less per bond it sells and the Klima treasury takes in more RFV per bond.
so you decided to kill it after all, huh? wel... whatever. was good while it lasted. when is it due so I know when the big dump is coming? see you at $10 (max)
You mention the informal AMA and drumming up interest. So how many investors tuned in and how many investors are there in KLIMA?
From what I remember, between 2-300. It was posted ahead of the AMA happening in the #policy channel were all such announcements are posted. It was also pinned in the Telegrams, and pushed for in the general and trading channels fwiw. The amount of engagement a DAO member shows means benefits in being in the loop, and the recording was out almost instantly, while the rough transcript dragged out for half a day because I had previous commitments - I am sorry about this.
The following question remains unanswered and I cannot find this information in my searching.
You are right in that there's been a lack of updated info about the governance process and the state and idea of ongoing decentralization. Some people in the contributor server felt the same way last week, which lead to this being put together. The DAO is what we make it - and if you don't have the time, don't feel you have the skills, or for other reasons don't feel you'd want to drive your suggestions/feedback, please make sure do drop them in the #feedback-suggestions channel - it's vital, because otherwise ideas and betterments might get lost in the noise of the other more general discord channels!
Anyway, here's the resulting doc. Suggestions for improvements for wordings or content that might be missing are highly welcome, maybe in the #governance or the #suggestions chan 
https://docs.klimadao.finance/tokenomics-and-mechanisms/governance-framework
Posting the 'get involved' info for posterity here, as it touches on the discussion here
We know many of you have been itching to get into the KlimaDAO Contributor Server to get more involved, and the time has come!
Are you interested in contributing to KlimaDAO?
If you're interested in supporting the vision of KlimaDAO and building with us, then join the server below and fill out an application! The contributor server is now open for all Klimates to work together in meaningful ways.
We are aware that this will start a massive backlog of applicants, which we will work through as quickly as possible, so please give us time!
:klimadao: :klimadao: :klimadao:
Some high-priority applicants we are looking for, but not limited to:
-Creative (UI/UX designer)
-Engineering (Backend Developer/Rust and Solidity experience)https://discord.com/channels/841390338324824096/841613715382992906/933751051381768232
shootmezoo The vote is still ongoing, and it looks like the option that ensure a long life is leading thus far. But it might be that the 'kill it' option with unsustainable APY wins out in the end, depending on how things end.
Off topic for the discussion about this KIP, but possibly this posts addresses your question a bit: https://discord.com/channels/841390338324824096/880913880635830362/931286769574494270
So, right now there is a 97% drop in KLIMA asset price. No new investors want to get exposure to KLIMA the asset, and we're proposing to again make another reason for new investors to not purchase KLIMA? On what planet are we living? I get the long term thinking but Jesus. This protocol is going to die a slow death if the community doesn't wake up to the fact that you must have new investors buy and stake for the economics to function properly!
Mike_Fast
How is keeping the apy where it is, "killing it"? So, why was the protocol built this way from inception is keeping it the way it is kills it? Is the team smoking drugs? This is now the second proposal to reduce APY after a 98% decline in price? How and in what world do you believe reducing apy saves this project? Who and with what motive would ever want to purchase and stake KLIMA? No one! It would make literally no sense to take that risk to earn 7000% APY with what appears to be another 98% drop in price!
WITHOUT NEW BUYERS AND STAKERS, KLIMA RETAINS ZERO VALUE! What do you people not understand about this simple fact. It doesn't matter what is in your treasury. The economics you've inherited from OHM depend on new participants!
I am going to personally sue you outside of a class action suit against the team and report you as the sole conspirator in a conspiracy to steal and misappropriate investor funds. You deserve criminal punishment.
I vote to replace this irresponsible team for destroying investors confidence in the protocol that they built in the first place and then collaborating together against investors to make decisions collectively that benefit them and not the investors who made their investments based on calculations. If you just keep changing the expectations and goal posts, and people lose all of their money. You all will be sued. Facts.
I think a class action lawsuit and an SEC tip should be reported immediately against the KLIMA team. All of the evidence is recorded through the proposals and in the discord of the collusion of the team against investors.
Mike_Fast Mike, I read the governance text, thank you. Are there plans to include who all the members of core, council etc are (undoxxed, simply the aliases), how decisions are made internally (from a governance side) etc. That would be very helpful (sry, lmk if this exists somewhere and I've missed it). Thanks
Brian33 To date, Olympus has done 4 APR reductions:
70k -> 17k -> 7k -> 1k APY. The marketcap went from 40m at the lowest to the protocol it is today. Imagine if the high APY was kept today. the supply expansion would overtake the revenue generated. The reduction is needed in order for Klima to flourish.
You mean flourish like OHM down from $1400 to $97? That worked well for them didn't it?
You guys had OHM to look to as a guide to what happens when you do these out of control APY reductions. Why set the APY so high in the beginning if it is not sustainable which it is not Why do it??
You create the problem right from the beginning and then wonder why you have a problem. The high APYs are not sustainable or realistic so why were they set. this is the question that needs to be answered?????? WHY
Mike_Fast You are right in that there's been a lack of updated info about the governance process and the state and idea of ongoing decentralization. Some people in the contributor server felt the same way last week, which lead to this being put together. The DAO is what we make it - and if you don't have the time, don't feel you have the skills, or for other reasons don't feel you'd want to drive your suggestions/feedback, please make sure do drop them in the #feedback-suggestions channel - it's vital, because otherwise ideas and betterments might get lost in the noise of the other more general discord channels!
Anyway, here's the resulting doc. Suggestions for improvements for wordings or content that might be missing are highly welcome, maybe in the #governance or the #suggestions chan
https://docs.klimadao.finance/tokenomics-and-mechanisms/governance-framework
Thank you for this updated information it provides some good insight plus how the vote is conducted. I would suggest that the information re the voting values be posted somewhere to be seen by ALL intending voters prior to and at voting time.
Yomie Ultimately this is a proposal that the policy team is putting forward in terms of what is best for the protocol and asking the community to vote. What is best for the protocol is what is best for the community so i'm not sure what collusion you are referring to here ?
Mike_Fast From what I remember, between 2-300. It was posted ahead of the AMA happening in the #policy channel were all such announcements are posted. It was also pinned in the Telegrams, and pushed for in the general and trading channels fwiw. The amount of engagement a DAO member shows means benefits in being in the loop, and the recording was out almost instantly, while the rough transcript dragged out for half a day because I had previous commitments - I am sorry about this.
The fact that there were only 300 out of what 50,000 wallet holders tuning in makes it even more important to make sure that any important information is very widely promoted and exposed hopefully making it visible to the great majority of investors and then repeated again. Obviously for half of the world the live timing is wrong but that can’t be helped or solved.
AussieWayne Brian discussed how the APY reduction did not hinder the growth of the market cap and then you decided bring it back to price which is the confusion here. The nature of these protocols is that when you are a smaller cap with lower supply you can manage a higher APY to allow for a faster accumulation of treasury assets and so a fast growth in market cap. However, because you can only mint new tokens when there is backing value in the treasury, DAI in the case of OHM and BCT in the case of KLIMA, when you have more supply you must restrict APY to ensure you are taking in enough revenue to continue to allow growth sustainably hence the framework for APY reductions based on token supply.
AussieWayne marketcap is a much better metric here than price, due to the rebasing function.
The goal of Klima was always to develop a currency in which the carbon market uses as a unit of account and store of value. For that to be the case, a large supply is needed (a currency can't be property be utilized unless the supply is in the billions). A currency cannot also have these high APYs to be utilized. For example, people will not pair with KLIMA due to the opportunity cost that comes with staking APY. At lower APYs though, this suddenly becomes much more viable.
The supply has to grow in tangent with the treasury value. As you gain more value in the treasury, it gets harder and harder to increase the value even more (going from 1 million to 10million in treasury is one thing, but going from 100 million to a billion is significantly harder). Value actuation is not linear, but logarithmic, meaning the supply expansion will also need to mirror that to retain value.
