Note that part I of the proposal has been scrapped based on community votes in light of MiaoShi's Conca-ve(USP) article https://concave.lol/blog/conca-ve-usp/. Going forward, the growth schedule set up in Community Proposal - 2 will merely be a rough guidance through time, Policy team has the discretion to meaningfully deviate from the growth or the APY curve when market conditions warrant.
- @Coud for his patient education and initial foundational work
- @Franklin for his motivation which helps me develop
- @Sert for his inspiration on the Treasury Distribution model
- Maximize long term returns and utility for gConcave holders, especially early investors
- Achieve rapid, healthy, and sustained growth of Concave’s treasury
- Target stable and steady appreciation of gConcave price, for Concave’s long-term success
Part I - Concave APY/Supply Growth Framework (scrapped)
Part II - Treasury Excess Earning Distribution Framework
- Part II talks about USP, which means this is the BIG POTATO.
- What is Concave’s USP? The PCC version is that we have a world-class money-making treasury which constantly grows, generates excess earning and distributes the earning efficiently to the stakers. More specifically, with the goal of promoting treasury utilization and circulation of gOHM and being at the front and center of a thriving “Dual Circulation” ecosystem for Olympus (MiaoShi will explain more on Twitter someday). Concave has been and will continue developing value-add products, innovative tools, and simple yet effective policy strategies and frameworks aiming to generate meaningful excess earnings outside of bonding revenues. We do not want to leak too much alpha as competitors are constantly watching us, but the flow chat below (credit to @Yass) shows examples of various type of revenue streams you can expect from us.
- Unlike most other protocols who distribute earnings via native token emissions which are intrinsically inflationary, Concave plans to distribute excess earnings (i.e. non-bonding revenue) through a Master Chef style distribution mechanism, which will distribute assets in our treasury (such as reserve currencies gOHM and stablecoins) to gConcave holders.
Proposal: See chart below. I want to draw your attention to Footnote , as there is some Alpha there.
- The high level rationale here is that we want to focus on treasury growth at an early stage of the project and then gradually shift the emphasis to paying back investors. Per my simulation, this should maximize the utility of stakers for in the long run.
- To illustrate, below are your theoretical total returns under various excess return scenarios. Realistically, MiaoShi personally aims at 100% for the Policy Team to start. A few things to note: i. The Concave with USP plots are very conservative in the sense that we are NOT assuming a higher token premium on Concave at all which is actually warranted and should lead to a faster treasury growth reality (this is a big force). ii. On the other hand this Concave with USP plots are optimistic in the sense that it doesn’t account for market volatility, so essentially what is shown in the chart below represent the theoretical arithmetical mean version of the returns vs. the geometric mean version in reality. I gauge the difference here (estimated by my numerical estimation model below) to be a small force.
iii. Thus in summary, the Concave with USP plots below are just conservative representations of total returns.
- Are these the returns for WL/auction participants? No, these are the total returns for someone who buys gConcave day 1 in the secondary market. One should imagine the respective long term total returns for WL/auction participants to be meaningfully higher.
- Why not start with a higher distribution %, like 5%, 10%, 20% vs. 0%? MiaoShi actually performed sensitivity analysis and concluded that the total returns (especially in the long term) in all those cases are pretty much the same as the proposed model which starts with 0%. In addition, MiaoShi personally prefers to start at a lower base as it gives the policy team more time and room to establish its PoC (“Proof of Concept”).