Hey @Togenkyo , I appreciate the well-reasoned perspective. Directionally, I do very much agree with you.
I almost left the PALM allocation for a separate proposal, because I conceptually separate this deployment from a geyser deployment. A geyser reward can be viewed as an expenditure for the DAO. This expenditure provides immediate short term value of course, and hopefully leads to long term growth. The assets deployed into PALM, however, continue to be held within the DAO’s ownership and are in service of DAO-owned forever liquidity (for any asset the DAO choose – AMPL, SPOT, FORTH, …).
On the geyser front, I think you’re right. The potential long term impacts of a geyser investment could be larger now than any previous point in the project lifecycle. So I would be in favor of increasing the SPOT geyser by upwards of 40%.
Other points to be mindful of–I already expect some growth due to non-incentivized sources:
- At the current DR, SPOT would be enriching at nearly 20% /yr in the beginning. We’ve seen the power of 20% yearly returns in previous cycles, and we shouldn’t take this too lightly.
- The introduction of swaps should remove a lot of friction in SPOT creation as a result of normal market price fluctuations of AMPL. Because of the DR bounds on swaps, SPOT supply would only be able to increase through swaps until we enter the upper part of the DR band [proposed @1.25].
We would be relying on the per-tranche mint caps to smooth this out over a few weeks, and could see some market choppiness until that settles. I think that’s ok, though.
Would there be community support for increasing the SPOT geyser 40% from 25,000 to 35,000 for this cycle?