Hello! DIP20 has ended, and the voting result is now announced as follows:
As a mining DeFi protocol, BOX price is the core element of the system. It has a vital positive correlation effect on the data performance of the three major protocols, Swap, USN stable coin and decentralized lending. At the same time, the data performance in the three major protocols directly determines the protocol revenue (0.1% of the transaction volume of Swap + USN stable coin generation interest and liquidation penalty, fees and interest difference of lending protocol), which affects the BOX price in turn and forms effective cycle.
In the above cycle, there is a link that needs to be re-examined, that is, whether the distribution rule of protocol revenue is reasonable, whether it provides effective support for the BOX price, whether there are better distribution rules to use the protocol revenue more efficiently, and ensure the protocol revenue can better promote the positive cycle of the BOX system.
Throughout the site, both EOS+BOX liquidity pool and BOX staking system can promote BOX price, so the protocol revenue should be used to motivate the liquidity depth of EOS+BOX liquidity pool or the BOX staking amount.
According to statistics, the liquidity comprehensive APY of EOS+BOX liquidity pool is about 45%, and the APY of BOX staking is about 40%. When the profit is not much different, the willingness of BOX holders to participate in adding liquidity in EOS+BOX liquidity pool is generally not high (participating in adding liquidity requires not only the cost of capital but also the risk of impermanence loss). As a result, the unilateral liquidity depth of EOS+BOX liquidity pool is only about 80,000 BOX, and the BOX amount in staking pool is about 700,000 BOX. The BOX amount on both sides is seriously out of balance.
The liquidity depth of EOS+BOX liquidity pool is too shallow. The direct problem is that the BOX price is very fragile. It can neither accept large selling orders nor buy large amount. It is difficult to give the participants enough confidence, which is not conducive to the long-term development of BOX system. Therefore, the distribution method of distributing all protocol revenue to the BOX staking pool does not help the stability or increase of the BOX price. The protocol revenue distribution rules need to be adjusted urgently.
- Together with BOX stakers, the BOX in EOS+BOX market-making liquidity pool will also participate in the hourly protocol income distribution. That means: protocol income will be distributed to EOS+BOX market-maker and BOX stakers according to their BOX proportion.
- The BOX in EOS+BOX market-making liquidity pool will also enjoy governance voting right, participating BOX DAO autonomy.
Explanation: (1) It will increase the returns of EOS+BOX market-making in liquidity pool and possibly improve the depth of EOS+BOX market-making liquidity pool. But the effect is limited, and it is not enough to stabilize or boost BOX price.
- Giving BOX market-maker the same voting right is compliant with "Same right with same token", expanding BOX DAO autonomy community.
- Cancel the staking reward. (1) 75% of the protocol income will be allocated to the EOS+BOX liquidity providers, encouraging more BOX to participate EOS+BOX market-making; (2) 25% of the protocol income will be allocated to a nominated account as a risk reserve for paying losses caused by contract safety issue or extreme incidents.
- The BOX in EOS+BOX market-making liquidity pool and the BOX in staking will enjoy governance voting right, participating BOX DAO autonomy.
Explanation: (1) It is a revolution aiming to solve the current problem. Only the EOS+BOX liquidity providers will get the protocol income. In this way, the depth of liquidity pool will be greatly improved, and based on "High income with high risks" principle, it is reasonable to increase to the return of market-makers. (2) Building a risk reserve fund will gradually increase the capability against risk and confidence of the community.
- 50% of the protocol income will be allocated to the EOS+BOX liquidity providers, encouraging more BOX to participate EOS+BOX market-making.
- Creating a fixed deposit system with 30 days, 90 days, 180 days and 360 days locking term. 50% of the protocol income will be distributed to this fixed deposit system using a reasonable algorithm.
- The BOX in EOS+BOX market-making liquidity pool and the box locked in fixed deposit system will enjoy governance voting right, the exact voting weight will be announced later.
Explanation: (1) Comparing to Proposal 1, this proposal gives a bigger incentive to EOS+BOX market-maker, will largely improve the depth of liquidity pool, but not as effective as it will be in Proposal 2. (2) at the same time, it gives incentives to long-term BOX holders who have confidence in Defibox. (3) Different locking terms face different risks. The longer term it is, the more objective a holder tends to be. Thus a heavier voting weight should be given.
Proposal 4: Status quo
- 100% of the protocol income will be distributed to BOX stakers
- Only the BOX in staking has governance voting right
Explanation: (1) The facts tell us that this proposal is not able to support BOX price, nor can it provide a good support to BOX system; (2) The distribution of governance voting right is too limited, adverse to community autonomy.
The foundation calls on every BOX staker to consider the proposals in the long run and boost BOX development in a longer term, achieving a positive cycle.
- The proportion of the total votes of the proposal to the total BOX staking amount (abbreviation: proposal participation): 58.06%;
- The received votes of Option B (Proposal 2) accounted for 67.46% of the total votes of the proposal;
The DIP20 has met the execution conditions. The Defibox Foundation will adjust the distribution of BOX reward according to Option B (Proposal 2). The development of related features involved in the proposal will begin today. For the specific launch time and more information, please follow the official announcement.
Note: Since the product development takes time, the BOX staking reward will continue to be released before DIP20 is officially executed.
Thank you for your support and attention to Defibox!
December 7, 2020