KlimaDAO Forum

grap in conjunction to what @optima said , the drop seems significant because the reward rate is projected over a course of a year. Its a much smaller value then actually is felt.

Brian33 This is equivalent to:
A 0.35% Daily Reduction.
A 1.87% Weekly Reduction.
13 more days to double your sKLIMA balance.

At current emissions, it is very much a hard task to keep metrics up as time goes on, and we are feeling that pressure today. I've been reading a lot of suggestions, and I've been taking them to heart. One of them is to reduce the reward rate when the market or metrics are significantly better, but there's been a lack of discussion on how we get to that state. The most optimal way to get it, outside of variables policy can control, is really through reducing emissions. Increasing capacity does work to an extent, but comes with its own set of problems (most notably a larger distribution of rewards to bonders rather than stakers). Increasing capacity with the higher reward rate also harms us more as we have to constantly pay more compounding rewards as time goes on.

Taking a moment to write this out: I know that the market conditions hasn't been the most ideal for all of us, and many people have suggested deferring the reward rate reduction later down the road when metrics are better, or to give more rewards to the holders today.

Ironically, the problem we see here is very similar to the problem that caused climate change. Many of us are aware that we must make a change in how we care for the environment in order to prevent global warming from being unsolvable, yet we see in many industries and companies this lax mindset on fixing it, as it doesn't effect our day to day life's too much. We fear by the time everyone is motivated to fix it, It will be too late to be solved. The same thing is occurring here. By deferring the reward rate later down the road, it makes it significantly harder in order to retain the metrics we see today.

For those who see that a reduction of reward rate is a hit for your own value, the success of the protocol, treasury, and your own tokens are heavily tied together. One's success isn't seen without the other. What's best for the protocol is what's best for the user, and vice versa.

Creating the carbon market on-chain is no easy task, much less rebuilding it from the ground up with KLIMA as the centerpiece of it all. Lows and highs will be felt through this journey. We'll always do our best to make this idea a reality.

Klima will end up being a force for good in the world. The protocol needs to survive any bear market. Reduce the APY and communicate clearly to the community that this is a long term hold.

Brian33 For those who see that a reduction of reward rate is a hit for your own value, the success of the protocol, treasury, and your own tokens are heavily tied together. One's success isn't seen without the other. What's best for the protocol is what's best for the user, and vice versa.

Easy to say if you have paid 10 DAI difficult to impossible to accept if you have paid $3500
Do not expect those who have paid those sorts of high prices to see the dream in the same manner as the IDO participants
The first group are looking at this from deep underwater whilst the IDO group have their rose coloured glasses firmly on and are now protecting their position at the expense of the others. Selfish actions indeed. And tell me again what reducing the APR did for Ohm's price

Is there any chance to have some kind of whitelist for wallets that bought at very top so thous could get like premium discount if they choose to bond more? Although I know that every body should know the risks involved in cryptos and trading but that wold be just a nice thing to do. Im wondering this and thinking of Klimas "ESG" values since these apy reductions have great impact on early adopters and in quite short notice.

What about proposing some fee/revenue producing projects like KLIMA Swap to earn trading fees, or KLIMA Bank to earn borrowing fees? Maybe do something that helps offset the APY and bring it in to balance if not become deflationary? Could be a win-win for the project and it's investors...

Reducing the APY makes total sense. We need to incentivise bonding + staking, versus staking alone. We need to push up the RFV and Market Value of each token, which we can more probably achieve by issuing fewer Klima and bonding more carbon. ,

Brian33 thanks for your feedback. I'm with you regarding the measures. My input to you and the team was more about how to communicate it. Instead of telling the community "everything is great but we reduce the APY" I suggest to be very transparent and clear on what the issues are and what issues we solve by reducing the APY directly in your proposal text.

As an example I like the explanation in OIP-19:

Our goal is to increase OHM’s supply over the long run, and through integrations and mass adoption become a decentralized reserve currency. However, we can’t just pump out supply and be done with it that way. Why?

Each OHM is backed by at least 1 unit of RFV, we can’t mint without that. The backing comes from our revenue generating activities, mainly bonds at the moment. When we sell bonds, we mint OHM against 1 unit of RFV and sell it at a discount compared to the market price. This indicates that our revenue depends on the market price.

So, if we were to just expand supply without taking this into consideration, we’d tank our market price, and thus our revenue. No revenue - no supply expansion and no reserve currency.

Here’s a simple example showing this.

Case A: OHM is trading at $500. We sell 20 OHM and earn $10,000.
Case B: OHM is trading at $250. We sell 20 OHM and earn $5,000.

Said differently, in order to achieve the same revenue as in case A, we’d have to sell 40 OHM in case B, so we'd receive less revenue per OHM sold in case B, or have more emissions for the same revenue.

Because of this dynamic, the Policy team carefully balances two types of emissions - emissions from bonding and emissions from staking rewards. Staking reward emissions form the majority of our supply growth. Bonding emissions depend on the total supply, demand, and BCV values set by the Policy team.

optima thanks for responding.

Regarding 1) wouldn't you say that with a higher KLIMA price the emissions would also be more efficient? See example in OIP-18.

nando1001 No one's going to invest in Klima DAO until the 5 day price drop period stopped. Is more valuable for new investors find stability at a lower APYs and bond discounts than loss 10% of their investment each week.

Ultimately the reason we are having this conversation is because we are currently in a bear phase of the crypto space.

In the bear phase it is unattractive to bond and it is unattractive to hold Klima because of its speed of depreciation in value, because it's being 'printed' too much.

In the bull phase it becomes attractive again to bond and hold Klima, because increasing price + high apy = increasing profits. And buying an already price appreciating asset on a discount is super cool.

When we enter in a bull phase again, Klima will probably already recover.

Then again why would we complain about APY even going down to 1000? Are we really that greedy that 10xing our money in one year's time is not enough?

I think lowering apy even to 1000 is a great idea. That should be Plenty for an investor and it will reduce volatility.

optima I wasn't aware that the bond discount depends on the APY? I thought it is driven by the bond price, which is driven by the debt ratio (size of bond) and BCV, which is the scaling factor of the DR.
So when you say "we'd expect to see", do you mean people would base the decision whether to bond and how much on the APY vs other factors? Or do I misunderstand that?

This is basically a required improvement. APY reduction vastly improves the outcomes for the protocol. We are here to build for a long time. I am fully in support of this.

Much to early and too massive reduce for now! Reduce slowly, coz otherwise again many investors will be not happy, especially those who buy very high (like me)

reduce weekly or monthly over a period of 6 months, give us chance to reduce our losses!

thanks

Brian33 yeah if you buyed for 10$ you are right, otherwise pls think about those who buyed for 2000$

heartradiance did you buyed for 10$? yeah i am shure you did

JohnT 100000% word up!!! Feel exactlöy the same and its true!! early investors acting very selfish!!!