During 2 weeks from 16.08.2021 to 30.08.2021 there were released 3.5 mil of LDO tokens as referral rewards. LDO circulating supply = 55 mil tokens. Releasing unlocked 6% of total circ supply in just 2 weeks = bad. On the next referral payout there were released 1.3 mil tokens. The referral programm is ongoing.
Proposing adding vesting to referral rewards 3-6 months.
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I support this. 3-6 months vesting period would be reasonable.
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GRO has an interesting approach that could serve as inspiration
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It turns out that no one cares about the LDO token itself, except the reward or the reward, there is a good return anyway, who cares about the market price?
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So, that’s how proposals work? You propose something and later it gets completely ignored by the devs?Nice.
3-6 months seems like a long time imo. There is already up to a 2 week waiting period for referral rewards to be paid depending on timing. All the referee is doing is helping someone else learn about Lido and maybe using the protocol. It is unlikely the referee is the one who should be punished from doing the work of advocacy with a 3-6 month lock up.
Selling pressure is always a risk but, there are also ~5M LDO rewards / month in incentives for liquidity and the referral program is helping deepen the defensible moat around Lido. This is important to hold the peg between stETH/ETH until the merge is completed and increase TVL/AUM of Lido against its competitors.
Some questions:
- How would you propose this be tracked?
- Are all referrals time bound by this lock up equally?
- Will this diminish the efficacy of the referral program? If so, how do we sustain the growth rate?
- Are there other options besides a lock up?
The devs are currently mitigating a vulnerability that was discovered earlier this month and are prioritizing the safety of the user experience and funds plus, there are a number of key conferences that are happening in Lisbon at the moment. It isn’t about them simply ignoring these proposals but more needing to prioritize due to capacity limitations.
The LDO economic model is a very bad design, release and release. A large number of releases began after December. It’s time to think about how to boost your confidence.
Would love to hear some thoughts on this if you have any. You are correct that circulating supply will be increasing significantly over the next year.
Lido devs already have experience in distributing vested tokens, when they sold LDO to Paradigm etc. They can use the same system as Sushi used. Vested for 3-6 months and then claimable once a week. The referral rewards are ULTRA generous. 5 mln tokens a week. That’s 15 mln $. Even with vesting there would be a huge incentive to referrals to bring new stakers.
You are talking about defensible moat around Lido, but I don’t really see it, since you can just unstake at any time without lock-up. For example I can bring a couple of stakers, get my referral rewards and all those stakers can later unstake using stEth/Eth pool and leave Lido afaik.
Huge unlocks are already happening. And much more unlocks are coming, while there is simply not enough liquidity for LDO to absorb all that dumping. All values investors already bought 4x lower than current prices during LDO fire sale “treasury diversification”. Either list LDO at big exchanges, announce LDO/ETH liquidity mining to absorb all incoming selling or introduce vesting at least to referral rewards, until there are more liquidity on exchanges.
I agree with your sentiment. I don’t see the value is arbitrary locking of LDO and rewarding users with more LDO. This would either get dumped again or compound staking of LDO which results in treasury expenditure increasing.
I think exploring a program with Tokemak where there are some rewards to increase LDO availability is a more productive starting point and am working to put together a proposal for forum in the coming days. This will incentivize LDO in a more productive way imo.
Happy to have more discussions as I do wholly agree Lido needs to consider sinks for LDO so it is more than a farm token or simple governance.