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id Title Status Author Description Discussions to Created
TIP-145 Ungating Overtime and Thales AMM Draft fhd Changing AMM usage rules and PnL distribution discordlink 2023-05-29

Simple Summary

Allow anyone to deposit to the Overtime and Thales AMM.

Motivation

More LP's will be marketing in itself, and Thales Stakers' LP's will be able to profit from regular users' LP's by earning a static percentage of the overall AMM's PnL. Also, Thales Stakers' LP's will not take any losses from the AMM, and will earn the SafeBox Fee from each round.

Specification

Instead of complicating things with bringing revenue to stakers, which rewards those who don’t even care to LP on Overtime and Thales AMM, I propose to keep all revenue generation within the LP’s. As follows:

Thales Stakers can LP on Overtime and Thales AMM at 5:1 Ratio

  • LP’s earn 50% of profit on all profitable rounds
  • LP’s earn the SafeBox Fee
  • LP’s take 0% of the AMM losses

All Users can LP on Overtime and Thales AMM without staking

  • LP’s earn 50% of profit on all profitable rounds
  • LP’s take on 100% of the AMM losses

Rationale

The point is that by gating a certain amount of USD per Thales, the earning power of each Thales increases as the AMM scales. This keeps the power to the Thales Stakers while also allowing users to dip their toes into Overtime. This also means that as the AMM TVL increases, so does the value of each Thales token, and the market will price this accordingly.

Additionally, this method rewards those who stake longer. Compounding APR to those who remain instead of static rewards directly to stakers.

Most user’s will be happy to take anything over 30% APY, non-inflationary. We can take advantage of this, and should do so sooner rather than later.

Test Cases

$1,000,000 USD AMM balance from Thales Stakers

$1,000,000 USD AMM balance from regular users

  • Profitable Round, $10,000 profit
    • Thales Stakers LP’s earn $5,000, or 0.5%, as well as SafeBox Fee
    • Regular users earn $5,000, or 0.5%
  • Losing Round, $5,000 loss
    • Thales Stakers LP’s stay even, and earn SafeBox fee
    • Regular users lose $5,000, or 0.5%

$1,000,000 USD AMM balance from Thales Stakers

$10,000,000 USD AMM balance from regular users

  • Profitable Round, $200,000 profit
    • Thales Stakers LP’s earn $100,000, or 10%, as well as SafeBox Fee
    • Regular users earn $100,000, or 1%
  • Losing Round, $100,000 profit
    • Thales Staker LP’s stay even, and earn SafeBox fee
    • Regular user’s lose $100,000, or 1%

Implementation

Copyright

Copyright and related rights waived via CC0.