Decrease CVP inflation

Proposal 39

Summary

Decrease cvp inflation by decreasing the cvp mining rewards in existing pools starting 28th June to 28th July.

Abstract

CVP inflation has been extremely rampant in the past months. With tester tokens being unlocked and no clear leadership being taken over the cvp mining reward inflation, the total supply of cvp has crossed above 22.5 million. CVP’s inflation is akin to a central government printing machine, what’s the point? We need to work together to stop cvp bleeding.

This proposal is focused on assessing the mining rewards for the currently active pools: ASSY, CVP-ETH, YLA, PIPT-ETH

Specifications

  1. CVP-ETH 0.6cvp/block
  2. ASSY 0 cvp/block
  3. PIPT/ETH 0 cvp/block
  4. YLA 0.35 cvp/block

1- The impermanent loss in this pool is quite aggressive given how poor cvp has performed in the bull market and then putting it against eth makes it rough for LPs. Also to incentive liquidity for this important and necessary pool, coupled with its impermanent loss the rewards have been decreased slightly compared to other pools.

2- This pool has been going on for sometime now and needs to come to an end now, just like pipt and yeti cvp pools came to an end. Assy’s sushi staking is already here as well. With the new product vision, assy will be one of the funds that will be removed totally with pipt and yeti too.

3- pipt-eth is part of the onsen program so they are getting onsen rewards. This is much like the yla-usdc pool that was deprecated. A similar thing should be done to deprecate pipt-eth. With zap coming soon and gas fees decreasing it is an unnecessary pool here.

4- This pool is very attractive for a lot of people, and especially in this market. It should gradually be decreased like all other pools in the past have been. It should not go to 0 so quickly (after the 27th).

Edit: There is another proposal, proposal 38 live right now, that states that YLA rewards should be extended for one more month. I’m not sure that is a wise idea. I think my proposal is a healthier outcome for everyone, still keeping YLA rewards but not overdoing it since its been steadily going on for three months now.

Hello, great initiative. I think it might be a good idea to combine two proposals into one.

And your idea feels like a step into a right direction

As for the current inflation calculation, I think you didn’t include ASSY boost into the inflation and YLA inflation is calculated wrong.

The latest changes in the inflation are shown in the newsletter:

You can find the current inflation stated in absolute terms

The biggest questions for me, is how much do we want to decrease YLA rewards as it is the flagship portfolio currently.

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Hello, thank you for your proposal,

Decreasing CVP inflation is of course a good decision for the long term, but IMO this proposal is a little bit to brutal. To avoid frustrating some users i think the changes should be smoother :slight_smile: :

  • The proposed decrease in CVP-ETH (0.74 to 0.6) is a good example of what i call “smoother” !
  • For YLA, as we are speaking of stable index, i think it will remain attractive even with a 0.25 (maybe 0.3) reward, but we should not forget that rewards on stables tends to attract pirat capitals just here for yield and immediate dump of tokens !
  • However, i think stopping rewards for ASSY index is a mistake, as people could get frustrated and leave, probably dumping their CVP (IMO, Assy should be rewarded as long as staking is not available for AAVE as it is a major loss, AAVE being the main part of the index). We could decrease them to 0.1 or 0.08 something like that !
  • For PIPT-ETH, i agree with your opinion on the utility of this pool, but we could go for a big drop of rewards instead of stopping them (something like 0.1/block) in order to avoid frustrating some users.

If we go for something like that, CVP inflation would be cut from a good third but i think less people would feel spoiled (which means less people leaving the protocol with dumping of CVPs)

Thanks for reading me !

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