KlimaDAO Forum

KLIMA gets diluted to zero. Pay out rewards and APY in USDC by selling Carbon Credits from the treasury when APY reduces to sub 100 level. If KLIMA is not scarce, if it constantly expands. Not sure how this asset lives up to its value proposition.

I think you might have a very limited understanding of how the protocol works. I'd suggest starting here: https://docs.klimadao.finance/

If you have any questions, feel free to hop on discord and we'll be happy to help.

Yomie

You're not wrong about having capped supply to introduce scarcity on supply side. However, having capped supply in a system that is striving to create a currency like Klima, we'd also be limiting its potential growth in the long term due to its second-order effects. One may also argue to cap it now and then consider to uncap it down the road when there is more demand and personally I think this would be more damaging optically.

What you're seeing in terms of demand and supply dynamics is that supply is expanding exponentially due to its compounding nature, while demand is market-driven and isn't as exponential. While I agree it's frustrating that we're not seeing demand and its effects at the level that most of us want, all the efforts put into working with partners and potential partners in the ReFi space are bearing fruits with each passing day. It takes genuine effort and there's no short cut to this. With time, personally, I'm confident we will get there. In the meantime, we have implemented numerous measures to regulate our supply expansion particularly KIP-14 to address our supply issue.

Thank you for voicing your genuine concern and I hope that this helps in painting a clearer picture of how we are navigating this. Please continue to dialogue this and reach out if you'd like

I appreciate your thorough reponse. If I could summarize the disconnect we are having. It lies solely with how you are defining "value" and how I am defining "value" when it comes to KLIMA the asset. I believe the community and team complicate what should be simple.

KLIMA, the asset should be designed in such a way where there is value inherent. I apologize but with an infinitely expanding supply. No prudent investor or rational human being (If they are capable enough to understand the underlying dynamics and numbers) would not invest in KLIMA.

The number one goal of KLIMA the project, should be to create inherent value in KLIMA the asset. How do you measure inherent value? Price. I hate to say it, but price increasing in web3 builds trust. and KLIMA the project has from a measurable perspective only achieved the opposite.

I believe the team and members of the community should acknowledge when original design was flawed. Pivot and fix the only problem that matters. All of the value propositions, partnerships, etc. I hate to be a realist but they do not matter if supply expands forever. I support the project but I think everyone needs to wake up a bit and rethink the core underlying mechanics and policy.

None of this even touches the fact that climate change may not even have anything to do with carbon credits or their subsequent prices rising. There are many angles that are unfolding.

Further, demand is an extension of this conflict. Demand is supposed to come from two angles. New investors who want exposure to KLIMA the asset (won't argue the reason) and those who want to Bond.

If we're all being intellectually honest, the demand side right now is complete speculation. I personally don't see any demand ever arriving from the new investor side without a rise in price or scarcity of KLIMA the asset. As of right now, KLIMA could be identified as one of the worst performing assets in crypto. I think being honest with oneself is important right now. No amount of partnerships can fix underlying policy flaws.

Nazca I think you are missing the side of staking. What you reference is true of bonding, not of new KLIMA being minted for staking. Look, the price can torpedo to below IV but really when is the policy team going to wake up? When they run out of BCT to defend IV? KLIMA has to stop it with the delusion and make real pivots in the design of this experiment.

Yomie I think you should lower your expectations on what the price should be and forget about the inflated past. It's only ever been stated that the price is expected to be 1 BCT plus some number. Some number could be 0 or even negative.

The docs originally stated that market forces can and will push the coins price below intrinsic value. All pricing has done is travel down there to look.

The trick is to not give up on the coin but to realize that it wasn't worth as much as we originally paid for it.

Nazca I think you are missing an crucial part of the tokenomics design of KLIMA and OLYMPUS dao. Both require new investors in underlying asset. Not bonders. Investors who purchase the underlying and stake. Without this part of the eco-system growing, the design is a ponzi and will not work. KLIMA will just eventually exhaust all BCT by defending IV. Or the more likely result, is they reduce APY to such a low number that they increase runway for years but eventually deplete treasury. Look, I think no one wants to talk about price but price matters. Bringing faith to KLIMA as an asset is a requirement not a bonus. I'm sorry but until people wake up to this, we will just tend towards zero. Please provide an argument or evidence otherwise.

khyezr

Suggestion: Pay out APY to stakers in USDC from earned Exchange fees of KLIMA when APY reaches 5-10%. Cap KLIMA supply.

Create a KLIMA stablecoin. Peg bonding to KLIMA stable. So they receive the RFV in the form of a stable coin, not KLIMA the asset. Bonders can then stake their stable to receive KLIMA the asset.

KLIMA benefits from the price appreciation of assets in treasury.

If you want to cap supply, it should be capped at whatever global emissions are since 1950. Every year, supply is allowed to expand the same amount of world net emissions. So when climate change is solved, and reversed. We cap supply. Probably a couple trillion max supply.