[GIP-5] Allocating part of UBI inflation towards G$ "savings" account

Currently G$ stakings only offers GOOD token rewards.
Giving also G$ rewards for stakers would provide both a utility for G$s for claimers and an incentive to buy G$s in order to save.

I would like to open a discussion about the mechanics and implication of such a system.
Specifically how are rewards funded and what should be the rate of rewards.

The key points of my initial suggestion for the discussion are:

  1. allocate 5-10% of the daily G$ UBI (that is created via lowering the reserve ratio) towards a rewards fund. Those rewards will be used to pay interest to G$ savers.
  2. give savers a fixed APY vs dynamic APY which is what you mostly see on DEFI today. APY should be set at 5-10%. I’m thinking dynamic APY is much simpler technicaly, simple is better for V1.
  3. G$ rewards are minted on sidechains, that means that the sidechain, for short period of time, have more G$s than can actually be bridged back to mainnet. This should not be a problem as eventually G$s should be covered.
  4. There is a need to make sure that rewards that are minted and allocated on mainnet are:
  • sent to the bridge periodically based on the APY debt
  • are enough to cover current interest rate for the staked amounts

To solve these we would need a keeper/guardian/management committee that would have limited permissions to balance the bridges and decrease/increase APY.

  1. in future versions locked G$s should not sit idle and be used for market making or lending in order to cover some of paid interest. (market making/lending could produce selling pressure of G$, that can be fine as the savings feature would produce a buy pressure)

Links the proposal work in progress specifications:
G$ Staking/Savings: Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.

Rewards allocation from reserve ratio: Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.

Update 31/07/2022
Code that passed initial audit:

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Hi Hadar,

“saving” is such an interesting feature to explore and I think this suggestion is worthy to be explored further. Since in practice this means a new distribution for our G$'s UBI, I’d like to point out some considerations from my side:

  • If we are willing to optimize on financial education and exploring on new protocol features, it will be have a lot of sense to move forward with this proposal.
  • If we are willing to optimize on UBI equality and fairer distribution of our UBI pool, I’m not sure it’s a good idea, as we’ll be reducing the UBI pool in favor to people that have developed their web3 skills and connect to goodswap.xyz in order to get the benefits from this savings oriented staking.
  • If we are willing to optimize for the growth of value of our token and network, I see that this feature creates incentives for people to buy the token, so in the mid-long term it might be beneficial for our claimers even if this means they will receive 5-10% less G$s in their claimer actions.

Looking forward to hear more thoughts from our community and move forward with a Stage IV: Snapshot Proposal before addressing the efforts to deploy the contract and propose this change on-chain.

4 Likes

Yes it is always a balance.
Nominally claimers will get less G$s, but if this creates demand for G$ and drives the price up they might end up with less G$s but worth more.

The important thing is that all params such as savings APY and the allocation percentage from UBI towards rewards can be modified and even set to zero by future governance decisions, we won’t know until we experiment :slight_smile:

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This is a very good topic.

I’ve been finding it difficult to buy and stake G$ because I was told that I would only get ‘GOOD’ which is not transferable, exchangeable nor tradable.

So, I think if G$ is given as interest of staking it would encourage more people to buy and In turn increase or boost the value of G$ and when the value goes up it would further be of interest to many people to join the UBI claimers.

I look forward to seeing good improvement and up flow value in G$.

Thanks

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I think it would be a very good option, finding the right way to distribute or give also G$ rewards to punters and gooddollar claimants, it would be a good incentive for the growth of the currency. :handshake: :muscle:

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Hi Mr Hadar, I have a question about that section. Are you referring to opening the possibility of having a reservation in Fuse?

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Not exactly. The idea here is that sidechains would not have to strictly wait for G$s from ethereum. My original thinking was to supply a fixed APY, in such a case how would the reserve on ethereum know how much is needed to mint to provide that fixed APY for the total staked which is always changing. So the thought was that the sidechain would mint it optimistically and eventually the reserve would cover it or the DAO would tell the reserve to issue G$s to cover that.

But in the long term that is definitely a feature that can enable a Reserve and other DEFI tools on sidechains.

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I think I already understood, so it would be a “borrowed” issue from the reserve where I imagine that progressively a % of the money that would be used for the issue actually stays in the vault because it represents the rewards that are being delivered in the Staking.

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I read the proposal and, from my humble position, I think I understand the new scenario is proposed here for the G$ staking. I think it would be a good incentive to strive the staking (I am not an expert but I understand that the staking makes the system more robust - please correct me if i’m not right) and in this proposal I understand that the inflation will not be affected since the rewards offered will be detracted from the daily UBI.
Everyday there is an amount of G$ that are not distributed (they are not claimed) and they go to the next distribution round divided between all the active claimers, that maybe not all of them will claim and , again a part of G$ remain not distributed. Maybe I am saying a stupid think but, what if these unclaimed G$ are used to the rewards system too?
With these things in mind I totally support the proposal .

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Hey Voro
Staking have multiple reasons

  • it reduces selling pressure
  • it gives some utility to G$ (savings)
  • idle G$s that are staked could be potentially used for investments such as loans or liquidity providing

Yes unclaimed G$s can be used for rewards, I think Pat raised it in the past, maybe it is worth exploring this idea again. @pedrosa.eth
Though I think it is less generic, for example what if we want to have G$ staking on some other blockchain that doesnt have the UBI pool, in that case the reserve split the rewards for staking between different chains.

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Again from my humble knowledge, I find the idea of the pressence of G$ in other blockchains as something important. Blockchains with affordable transactions fees where a second reserve could be issued… dreaming from the unknowed… Anyway this is a different point that the one we are discussing now.

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Interesting!! :handshake: Any well thought out and analyzed incentive can be favorable for the project, I know that it is not under discussion here today, but it seems important to me that people can complete their registration in a simpler way, I mean that 60% to say the least they didn’t make it or get discouraged in the process, I’m very excited about the new proposal and I’m sure the right ideas will come up to install it. :clap: :muscle: :handshake:

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What affect will this have on G$ staking for GOOD token? Will many people withdraw from GOOD staking and reduce it’s distribution to the extent that only a few GOOD holders have the governance voting power?

Could the G$ used in this staking be used for liquid staking?

Can you provide more about completing registration issues? are you referring to the face verification?
can you have those users contact us?

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The idea is that it will be the same contract, both GOOD+G$ rewards.

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It is not possible because I do not even know them, they are people who access the Project thanks to my daily work on the networks, the people who do contact me or have the opportunity to explain in person do not have that inconvenience, I am trained to provide support and information to the respect, but I think that direct contact with new claimants is very essential and it is not easy, thanks for your answer! :handshake:

OK, so the GOOD reward would be the same and people will also get G$ as well.

This would be good as it will encourage more people to stake and therefore aid distributing GOOD token to a wider number of people.

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Hello everyone, I will be brief and ask a question. If the staking of G$ is so important, why not include a tab for it in the app where we all claim?
The simpler, the more interesting it will be with a good promotion, especially if the rewards include G$.

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Hello everybody!
I don’t have much more to contribute, but I would like to say that the staking that rewards with GOOD and G$ seems to me to be an important element to make the currency stronger, more solid and more attractive. I think the impact on the daily UBI would be limited and that it offers more advantages than disadvantages. On the other hand, I feel that what is most lacking in the project now are investors that promote the generation of funds for the UBI and I believe that the staking of G$ that gives returns in G$ can make the project more interesting for potential investors. For all this, I think it is an important measure to implement.
Thank you very much!

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