✖️ [RFC] Disable or remove Votium Dial

Summary

Attention needs to be put on the Votium Dial in the Emissions Controller. As it stands, it does no longer make much sense to allocate a portion of the emissions for little or even no impact. Additionally, there is the chance that MTA gets wasted whenever the threshold is not reached.

Abstract

Currently around 13k MTA gets sent weekly by the Emissions Controller to the contract that disperses the MTA to Votium. This MTA is allocated to be used for bribes. The current bribes have exploded in value and therefore the MTA share is becoming increasingly inefficient. I would therefore suggest rethinking the Votium Dial and using the funds instead to better support our current set of products and focus on the upcoming products of mStable instead.

Motivation

The Curve game has become very competitive and as a result, the allocated MTA is only having a very small impact. A major issue is also that if we were to send the MTA for every Votium cycle, the MTA could potentially be just wasted for missing the 0.5% mark:

Pools with less than 0.5% of the total votes on the Convex Snapshot will not get any veCRV allocation

This is increasingly harder to achieve and requires additional MTA allocations that are only possible with allocations outside the Emissions Controller, mostly by individuals.

Pros

  • Save MTA for better use cases
  • No chance to effectively burn the MTA due to missing the threshold
  • Better focus on the upcoming products rather than fighting the curve wars
  • Focus on building a better product rather than paying for a product that only appears better on the surface

Cons

  • mUSD in circulation outside of Save will start to bleed
  • Interest for Save will probably decrease
3 Likes

Thanks Dimsome. Given the challenges outlined, I am supportive of disabling the Votium dial.

If a dial is disabled, are the votes currently placed on that dial automatically redistributed to the other dials voted on by the user?

I support disabling the Votium dial. We got in relatively early on the bribes which meant we got plenty of bang for buck. The market has matured as you would expect and we can no longer compete.

Any remaining votes to the Votium dial once it has been disabled will be ignored. This means the MTA that was destined for Votium will be proportionally redistributed to the other dials based on their voting power.

The Votium dial can be re-enabled in the future if the economics change again.

Nick

Great proposal and thanks for bringing this up!

I agree that this dial is no longer economically viable in the current market conditions.

According to what many Metanauts have previously mentioned in the Discord and here on the forum, perhaps we could repurpose this dial and accumulate MTA to be used for purchasing CVX and/or CRV tokens instead for the Treasury?

With the newly released Turbo product from Tribe, this could potentially be done without needing to sell MTA on the market as well, which seems very bullish to me.

This would leave it in the hands of Meta Governors to decide if we wanted to continue to play the Curve Wars game, and remove accountability from the core contributors to decide if these games should be played or not in the first place.

It would also secure a long-term stake in both protocols and give the DAO a way to influence the mUSD/3crv pool with a perpetual on-chain vote, which will further benefit the ecosystem and save users in particular and is arguably a much better long-term bet than trying to win the war on the bribes with Frax and the other behemoths.

Thanks for the writing @dimsome
Considering the $ value of this 0.5% threshold and the fact the smallest bribe after ours is RAI with a $155.36k bribe, it’s clearly getting very expensive for the DAO
I’m therefore in favour of disabling momentarily the Votium dial given MTA low price and the over-competitive environment. Contributors could then redirect their votes towards whatever dial they see fit

Something I’ve never quite understood about the bribes, is this notion of ‘waste.’ The way people talk about it, if the quorum isn’t met for a round, the bribe amount just…disappears? Goes into a black hole? Is gone? I don’t know, but that seems strange. Does Votium not return the bribe if the gauge isn’t met?

If it is truly burned, technically doesn’t that improve token price because the tokens are removed from circulation? I must be too smooth-brained to understand this 'cause I’m coming to a different conclusion.

This will decrease mUSD supply by $30 million and cut mSave revenues in half. Votium is currently the best return on investment. There is a fair amount of information provided in this dashboard ==> Dune Analytics
I’m actually quite surprised that there is so little weight on the Votium dial.

If the bribe gauge cannot achieve 0.1% of the necessary CVX votes then the dial should be turned off. But, not before then.

I for the first time started a dash to evaluate mAsset swaps. It reveals that about 1/4th of all time revenue. Dune Analytics. So the including of swap fees increases the value of investments by 33% over base yield. The convex mUSD introduces a multiplier on top. So while the base earnings would be x. The swaps empirically generate (1.33 * x) and the convex boost currently gets provides a multiplier on that 2 * (1.33 * x). Essentially, it is more cost effective to remove all trading fees than is to stop votium bribes.

If the votium bribes disappear the swap fees and the feederpools are the only elements competing with the protocol take of 10%. Without using clever approaches to boosting yield, the mSave will require MTA subsidies which is not sustainabl.

All of those reasons do not even include the fact that mStable owns mUSD/Curv3 and is generating CRV and cvxCRV which will generate CVX for future voting weight.

1 Like

This is extremely important. Because this is incorrect:

The current value is: “Each gauge must receive at least 0.10% of the votes before weight is assigned.” [CVX] And the plan is for this percent to continually go down.

Currently, we will generate ~28K MTA for the bribes every two weeks. That is about $20.44K at current prices. Last round $40.16k recieved 0.24% so we should still clear the minimum threshold. MTA price needs will need to either track with or outperform other Governance tokens used in bribes in order to stay relevant in the bribes.

2 Likes

I think this is a very fair point, thanks for helping out here @Jeshli to get the correct information.

I think in light of this, we might leave it as is. We should be careful though to calculate before depositing in Votium that we get at least 0.1%.

@trustindistrust It does not get burned but is effectively wasted. The MTA gets distributed but we just don’t get any veCRV allocation. So it’s even worse than just burning :slight_smile:

So as the workflow, collect the MTA in the BribeForwarder contract and disperse to the Votium Contract once we can be fairly certain to have the minimum, otherwise keep and accumulate for next round.

3 Likes

Thanks for the additional info here
Extremely helpful

1 Like

Thank you @dimsome

When this was posted I completely agreed with this approach. However, since then two things have happened:

  1. the threshold was thought to be 0.5% but now is 0.1%
  2. one of our investors has said they may be able to vote with around 167k CVX. Back of the envelope calculations make that 167k CVX would represent 0.469% ( 2x from our previous round)

In the context of building v2, which we aim to launch in the next 3-4 months and launch in some way, I think a priority should be to retain mUSD Save APY for our reputation and for our current partners and users. Once v2 is launched this becomes less important as we can ask v1 users to migrate.

Within this new context, I would suggest that we try and decrease the amount of MTA going to pools with very low protocol value (BUSD pool for example gets 8% of emission). If the investors votes don’t work out for whatever reason or the threshold changes, we should definitely revisit this.

What are your thoughts?

3 Likes

Oof, you’re not kidding!

2 Likes

Completely agree, let’s focus some attention on the MTA allocation and how much value we get for the bucks. That would give Stakers a better Idea on how to allocate smarter.

1 Like

Agree on this one. We need to be as economical with our resources as possible and Votium is no longer worth it.

After briefly discussing this with @dimsome, and in line with the recent findings in this RFC, we will no longer pursue this RFC for the moment, and I’ll close this for now.

Thanks everyone for your fantastic feedback, and have a great start into the week!

2 Likes