• Proposals
  • KIP-9: Protocol Maturation and APY Alignment

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.

    Sirob Can't 100% speak to market premium, although I'd love for us to trend towards an increase haha.

    Specifically: Thinking is treasury bonding will be more capital efficient. Let's use BCT as a potential example.

    Scenario A: - ROI(5-day rate): 8%; We'd expect to see bonding occur around 5%, for something like -
    Bond price: 19 BCT; Market price: 20 BCT

    Scenario B: -ROI(5-day rate): 6%; We'd expect to see bonding occur around 4%, for something like -
    Bond price: 19.2 BCT; Market price: 20 BCT

      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.

      I am against a further reduction of APY.
      The system is based on a steady influx of new cash and a strong treasury. So instead of forcing existing investors to quit in search of better yields. MAybe it would be best to insentivice new money coming in.

      Either through high APY or better bond discounts. !!!!!
      isnt the goal of KLIMA to squeeze the carbon market? So make bonding of BCT to the treasury more attractive. The result will be a higher backing per KLIMA ++++ a reduced supply of BCT => more valuable BCT /treasury

        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.

          AussieWayne

          Every individual had a chance to participate in the IDO, and when that happened, they took the greatest risk. At the time, there was little development to be shown to the investors.

          AussieWayne And tell me again what reducing the APR did for Ohm's price

          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.

            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$

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

                Burtrico who make this chart look terryfing?? i think the ico and presale buyers do it, constantly taking out money, not caring for the project, only caring for profits. thats terrible for such a project.

                Absolutely going for both. Hence there is need to reduce the APY for a sustainable growth ahead...

                No to both. There are other measures to take first, to make ramping on easier for newcomers instead of via sushi only. What is more, before we speak of any reduction, how about all pklima is cancelled? And we still need to know how much klima from aklima is still in wallets ready to crush the price. Be transparent.

                grap Totally agree with this. This point has been brought up in the Office Hours before, to request the policy team to be more sensitive to investors’ concern over the current price action, especially when communicating new policies for the long term health of the protocol. Right now, even if the protocol is growing its treasury and reaching carbon targets, the success of the protocol isn’t really translating into the success of investors’ returns as yet. Surely these policies will have some effect on price action, as some have pointed out in this forum discussion, however these are not included as considerations upfront in the KIPs.

                As someone who got into Klima when the price was down from ATH but still in the four digits right before the never-ending dip, it’s never easy to see the portfolio 85% down and with no guarantee of easing up. While I was very excited about Klima and still believe in the vision of the DAO and the team, I’m also not here to throw away hard-earned money. The sharp decrease in price is really penalizing the early investors of the project, and it’s a hard pill to swallow.

                Having said that, I know the project team is probably tackling issues as they come, as all start-ups do, and also working really hard towards the very exciting prospect of making Klima the centre of the on-chain carbon ecosystem, so thank you, your hard work is much appreciated.

                TLDR: Change the APY if you must, because the pragmatist in me understands that the project needs to survive the crypto winter, and flourish for a long long time to come, otherwise there’s zero chance of me recouping my initial investment, let alone make some returns off this. Let’s vote survival over short term gains.