[OGP-Draft] OATH Tokenomics Upgrade Proposal

General Discussion
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Executive Summary:

This proposal aims to refine OATH tokenomics to maximize benefits for stakeholders, address fragmentation challenges, incorporate innovative features (oOATH), and update features of bOATH LPs. Emphasizing real yields and implementing new measures like Option Tokens will drive deeper community buy-in and enhance the OATH ecosystem’s sustainability and growth potential.

Proposal Motivation:

Reason for Submission: Given OATH’s shift to address liquidity fragmentation, a tokenomics update is paramount for the project’s success.

Potential Conflicts of Interest: None identified at this point. Continuous disclosure will be discussed with the community should any arise in the future.

Justification: The current tokenomics is faced with challenges such as inability to penetrate markets across multiple networks and lack of effective incentives for long-term community engagement.

Proposal Specifics:

Issues Observed:

  • Fragmentation from multi-chain strategy turning into a disadvantage.
  • Existing OATH economic strategy not effectively addressing the evolving needs of the community .
  • Lack of direct benefits to bOATH LPers
  • Market penetration has decreased (market has changed from OATH’s launch)

Proposed Solutions:

Team Experience:

The OATH team has shown adaptability by evolving strategies based on the needs of the hour, such as the introduction of oOATH and focus on $bOATH. Their successful collaborations and implementations in the past provide confidence in their ability to carry out the proposed tokenomics update.

Key Objectives & Success Metrics:

Objectives:

  • Increase OATH’s competitive position.
  • Enhance the OATH ecosystem’s sustainability.
  • Increase OATH trading volume.

Success Metrics:

  • Increased liquidity conditions for OATH.
  • Enhanced active user and community engagement metrics.
  • Positive feedback and increased usage of new features like oOATH.

Length of Engagement & Budget Breakdown:

No budget requested. Seeking community input.

Community Support:

Early feedback from community forums like Twitter (X) and discord has been positive, especially regarding features like real yield and bOATH. Seeking governor feedback on the proposal.

Partnerships:

N/A

Risk Assessment:

Potential confusion among existing users due to the tokenomics transition.

Technical challenges during implementation.

Market risks due to volatility in the cryptocurrency space.

Additional Details:

Further clarifications and specifics will be provided during governance forum discussions and community engagement sessions. Feedback is actively sought to ensure that the updated tokenomics aligns with the community’s needs and aspirations.

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Looking forward to community comments on this one.

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Here’s a visual based on a liquid incentive model. Hopefully this can inspire new ways to fine tune incentive models while remaining liquid

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Does digit provide any opportunity for real yield from management fees, etc or that just under Reaper? Since it’s an Oath ecosystem centerpiece and mercenaries will use for their positions with no connection to oath, pushing some of its possible revenue to bOATH would be an additional utility.

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Excellent proposal! I am in favour of the establishment of call options (oOATH). It disincentives ppl from selling their oath while incentivizing ppl buy oath at a discount. I would adhere to a 50% discount to start.

As for giving bOATH greater utility, the better. Giving bOATH stakers most of the revenue fees, real yield and airdrops from Chapters is great.

Specifically, i would like to suggest two things. Firstly, incorporate this into Digit to allow the maturity curve to take root and allow those staking longer to have a greater share of the fees, real yield and airdrops. I’m sure this one is obvious, but i wanted to point it out.

Scondly, to give bOATH stakers two options when staking into Digit. Similar to Sonne finance, either they get a relic where the fees they get is in the form of WBTC, ETH and/or ERN, OR, they get a relic where the fees and real yields are auto compounded into more bOATH.

If there is an OATH emission, either both relics would get an equal share or most of it would go to auto compounded bOATH relic. The maturity curve on both relics would be active.

The second option i really feel it gives users greater flexibility on what they want to do with their profits, as well as creating less sell pressure for the OATH token since there would be less of a need to incentivize users by emitting more OATH

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with respect to OATH liquidity fragmentation and I would even add ERN and stERN into the equation, I would suggest that so long as the bear market remains, we stick to only 1, or maximum two chains. Since Optimism is taking centre stage, OP chain should be the primary chain or incentivizing strong OATH liquidity. If there is a demand to provide liquidity elsewhere, I would suggest either BSC (Thena) or Polygon (Retro). Liquidity and the incentives on both Arbitrum and Base should be depracated as the former is another L2, while the latter is just an extension of OP (via OP stacks).

Once the bear market is over and/or there is greater demand for OATH to be on other chains, then we can expand once again.

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The proposal sounds great.
I am not very crypto savvy, but I have a concern; here it is: with creation of New Chapters, what happens if the chapters become so much more successful than Ethos and it causes Oath to gets left behind ?

To prevent the above from happening, one naïve idea would be, to Design the Code for each New Chapter to do at least a part of their inceptives in the form of OATH, like the flywheel that we hope to see on Ethos.

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Support this

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Really like this direction, thanks Desty for the graphic. The increasing discount/decreasing premium on xOATH/bOATH converters is a nice touch.
Thoughts:

  • I’d shift the premium ratio to 70/30 or 80/20 in favor of bOATH stakers. Dumpers should mostly be paying out LPs, the treasury should be getting a small cut of it. 60/40 is a bit too skewed imo
  • What was your thought process behind the max redemption being at 90% and not 100?

One the first point: The other thing we could do is let governors decide the direction of a portion of the premium revenue that goes towards the treasury. If we were to stick to 60/40 maybe half of the treasury’s 40% gets voted by governors on how it’s spent. A monthly vote where options are something like:

  1. Buyback Oath
  2. Distribute to current bOATH stakers
  3. Put towards a marketing or CEX listing fund.

Just an idea, hope it was clear for everyone.

Overall fully supportive of some version of this proposal. Can’t wait to see this unfold!

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Are the governers the bOATH stakers?

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Yes and OATH holders. bOATH stakers governance power is weighted 1.5x compared to 1x for spot holders

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The 60/40 premium distribution was just a rough number to ensure the protocol is bringing in revenue regardless of market conditions. It also allows the protocol to be more aggressive with incentives that will either end up back in the treasury, or as liquidity. I honestly don’t feel too strongly on this, so either way the numbers are skewed is fine by me.

The 90% max on xOATH creates a system that constantly grows the liquidity. No matter what, at least 10 percent of xOATH will end up as permanent bOATH liquidity!

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Ah ok. In that case, while i like your premium allocation, i dont think the monthly voting to see where the revenue will go to is a great idea, mostly because voters will want to fill in their own pockets first before ising those funds to enhance futher development and expansion of Oath.

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I agree, we want to reduce the governance burden.

I also think 60/40 is fine. bOATH will still get tons of volume.

It is important that the treasury gets a reasonable share, noting it will be used to support the ecosystem and thus bOATH in any case.

bOATH is rewarded vicariously by the treasury being funded.

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