a7f06531f53af082707f460f8e1519c08fe50c4c
The Proposal
This proposal is for the DAO to use the current BUSD and USDC/T reserves to purchase DEC. This swap will be handled by the DAO management team in a way that minimizes fees and slippage as much as reasonably possible. The max purchase price for DEC is $0.95 per 1k DEC (95% of par value).
Video Explanation
The Benefits
This proposal has 2 main purposes: 1) help DEC reach par faster and 2) increase the value of the DAO holdings by purchasing DEC at its current discount. The DAO currently owns just under $500k worth of stable coins. If all of the funds are able to purchase DEC that will give the DAO 10-13% of the current DEC supply. Because the DAO currently has no method of spending DEC, this supply will be effectively removed from the market and be a major factor in driving DEC back towards par value.
If DEC price jumps above 95% of par value before funds are depleted, this will also act as a barrier to help prevent DEC from dropping below this 95% again in the future, as the DAO will purchase DEC again if it falls below this threshold.
The Reasoning
It has been stated many times that getting DEC to par value and activating the "flywheel" is one of the most important things for the Splinterlands economy. This is a chance for the DAO to contribute towards that goal while also increasing the value of their treasury. Activating the flywheel will create a large use case for SPS (burning SPS to mint more DEC) that can help drive more demand for the Splinterlands governance token.
The Sponsor
This proposal and the video above is sponsored by Ethlas. This proposal was written up prior to and was not influenced by Ethlas or any other sponsors.
I'm sure you all know I am a huge fan of getting DECs to peg, but I'll have to vote no on this proposal as I don't think this is the right way to do it.
Among the many reasons others have listed, my biggest concern is: this proposal does not create a permanent and sustainable supply of funds going into burning/using DECs, this simply uses the DAO's funds as exit liquidity for users who are selling now.
I also agree with many other comments people have stated before me.
Edit: As a relatively large DEC holder, I can assure you I will sell it all and buy it back later at a cheaper price when the DAO runs out of funds. This proposal will only act as exit liquidity and a quick trading opportunity for users, this doesn't do anything to help the game in the long term!
Upvoted own comment for visibility
EDIT 2 (my thoughts copy pasted from my reply in Discord):
In response to the tags I got regarding this new proposal, I just wanted to expand a bit more on my opinion. For starters, I have already told a few people why I am against this proposal and it's mainly to do with exit liquidity. I don't want to use all of the DAO's stables as exit liquidity for people selling now.
Furthermore, I believe if this passes, we will see an instant increase in DEC price to near peg, then as the DAO starts buying people will sell into the DAO's buy pressure, essentially giving users the option to front run the DAO and forcing the DAO to buy at a higher price.
Another big issue is diversification. We currently have a nice portfolio of crypto (ETH/BTC/BNB) and stables along with SPS in the DAO's treasury. This is good. I would hate for the DAO to transition more and more into holding only Splinterlands assets. If this proposal passes, we are one step closer to using all the BTC and ETH to buy SPS which might be good in the short term, but adds literally no value in the long term.
The solution: after speaking with Yaba about why I am against this proposal, he came up with an idea I do approve of. Instead of using all of the DAO's stables to buy DEC at market price, simply only start buying when the price falls below a certain zone. For example, if the price falls below $0.0008 the DAO will start buying until it is above again. This safeguard should in itself be enough for the community to buy DECs near that price since there is limited risk (until the DAO runs out of funds). This creates value in stabilizing DECs without the DAO losing out on funds from a frontrun opportunity. The number doesn't have to be $0.0008
EDIT 3 (in response to why not let the DAO buy up cheap DECs now?):
I personally like to think about it this way, if DECs reach and stay at peg we are all winners, we don't need that little bit of extra money the DAO can make from buying DEC now.
However, in the worst case scenario the bear market gets worse and Splinterlands continue to bleed players, I would far prefer us to have a safety net in this case than the missed out gains in case DEC reaches and stays at peg again.
One example is the SPS airdrop. I love SPS and wanted to hold onto all my SPS, even at $1. However, against my better judgement at the time I sold every airdrop because I thought to myself even if SPS goes higher, I'd be happy even if I sold now since my other assets will appreciate anyway, my only risk is if it went down. I think we are at a similar time now with DECs, I truly believe it is guaranteed to go up to near peg but what if I'm wrong? I'd rather have a safety net in case I'm wrong than just throw everything into it and gain like 20% if I'm right
Please rally folks so that we can stop this proposal
I agree entirely. This proposal is not only the DAO shooting itself in the foot, but dropping the gun on its foot, then in the act of picking up said gun, spraying the loyal bystanders with a volley of bullets.
It's a no from me. I won't repeat what the others who have not supported this have said in the comments, but I've upvoted their replies.
This is a terrible idea. Short term pump and then the inevidable dump. I cannot believe this is passing atm. I would sooner back the 500k to go to the DEV's to support operations than vote for this obvious attempt to force pump and dump the market and leach easy money from the Dao's actions. Can people not see this is a bad, bad idea as this is forcing a market effect that relies on market demand that just isnt here atm, I'll be readying my DEC to dump the pump on the Dao too once the Dao purchases and buy it back for 30% less when the dump finishes. Why can't we just be patient and wait for Land Staking which has the potential to remove 150K X 10k X 5 DEC from the market in card staking alone let alone future building, item and spells sinks (Go do the maths - I'll give you a hint we dont even have close to that kind of circulating supply of DEC)..............Let the team create new DEC sinks and remove DEC creation E.G Leaderboard and card burning and LP's etc. and let the playerbase ease us into the peg. Not send out an open invitation to crash the security of the Dao.
Thank you for seeing this!
If the proposal had said SPS, I would have considered it far more heavily. I really hope some big whales in here really think hard about the quick gain verses long term security. If we just stay patient we are looking at achieving something quite remarkable. We are little more than a few K close to triggering peg in a bear market without the need to really push for it even under such terrible world market conditions and a depleted playerbase post bull market. The event was a success, the expected drawback has come, but we are on the cusp of 1.5 land and staking and my goodness watch the flywheel take off without the need to throw the Dao's weight at it. At any moment someone could snap up remaining DEC and push us to peg...And once land 1.5 staking drops, there are going to be players everywhere looking to purchase DEC. And then the hype of SPS climbing as people start burning for DEC. This is as solid a no I've ever given and I'm a regular no guy.
Exactly my thoughts. Wait for the roadmap to deliver, assess, then think about making further tweaks or proposals like this.
I am so glad you are able to articulate these facts clearly.
I just hope the rest of the community can come around to our ideas. I've tried to convince as many people as possible in replies in this post's comments.
These might be viable options but that is not what this proposal speaks of. At least not what I can see in OP. No one here disagrees with the need to diversify and everyone is aware of the current risk of continually holding stable coins given the current assault on crypto by 'The powers that be' but the risk of throwing the Dao's stable coins for DEC is too great and the exploitation too easy. Why would anyone here with who identifies their contribution to SPL as a significant investment from them risk part of their future insurance policy in this game on a quick gain that will only invite bad actors to participate is beyond me. I would prefer the notion of using stablecoins to buy limited availability assets like tracts, SPS, cards or nodes etc as you mention. But that's off topic with the proposal here.
I can totally believe this is passing, because frankly DAO governance is utterly batshit crazy stupid. Governance is determined by the votes of the economically illiterate or the self interested bot farm whales. So I no longer expect anything other than complete idiocy from the DAO
I really dislike this idea. It seems incredibly short sighted and to be frank feels like a rug pull of value waiting to happen. We are basically saying, as current DEC holders, give us the $500k that the DAO has so we can dump our DEC on it.
Obviously your intent isn't malicious but that intent does exist out there.
If this does pass I'm going to dump my DEC and start dumping my SPS over time as it will ahve taken what outside value the DAO has and eradicated it removing all stability of the game. Keep in mind the dev team right now is really struggling. I doubt the SPL team can support ongoing operations at their current cash burn rate for more than a year, if that.
This is the exact danger we face if this proposal passes. I wrote a few weeks back about how the DAO keeps voting against its own interests, and I fear this proposal too, will be one of those.
Exactly, its constant short term bandaid type voting. People are not looking to stay in this game long term any more and their votes seem to prove it.
It's always trying to push the flywheel effect when it really doesn't need it. I wonder if any of the yes voters even know how much DEC is currently available for purchase? Because if they did, they would quickly realise we are one decent DEC purchase away from peg and flywheel effect...
Perhaps it should be set as a stabiliser, much like the HBD stabiliser.
Agree we should only buy DEC at favourable prices when it concerns the DAO, but using the DAO as a failsafe for DEC/PEG will give bad actors a benchmark to work with. That is in essence what the proposal is trying to do and in a bull market would be a safe bet. Your ideas are warranted but that is not what this proposal is about. We are not in a bull market and bad actors will exploit the failsafe of this proposal until it breaks. Then we go down due to the overcreation of DEC through SPS burning and buy-resell from bad actors outside of market demand. 500k is alot of money with even more SPS still to be minted and once we break it, we end up devaluaing the DAO and relying on playerbase to once again fight through natural demand to slowly creep back to peg again...This may not happen immediately and maybe land staking would delay such effects but outside of a bull market we will place a huge risk against a predicatable tumble and that is a risk anyone with meaniful investment should not entertain.
I guess, if this one fails, create another one with $0.90 because I am more inclined to $0.9 than $0.95.
Benefit:
Even tho I voted for I am more inclined to $0.9
Considering that stable coins are the next one to either fail or get attacked by SEC IMO, I personally never trusted stable coins and fear they will be the next one to fail.
So since I would rather we have 500k$ worth of DEC vs 0$ worth of a dead coin that have many reasons to fail in the near future, this could be a good argument to vote for it.
But again I'm just not sure that doing so now in order to "activate the flywheel" gives any value to the DAO since to gain value, the DAO will have to dump on us at one point to gain back this value unless we vote for the DAO to burn it completely.
I'm still on the fence and will read everyone's take on that before taking a final decision
I have 791k SPS and I'm voting no, because that is the community sentiment.
DEC dont have a peg and never will be stable coin. Sorry.
Thank for your imagination
I don't get why it seems there is only you and me that understand this obvious truth (because it isn't backed by the dollar). Nearly all the rest of the community are brainstorming all these ways to achieve the impossible. It's laughable. The thing has barely been near peg ever and never will be. It's utterly stupid.
Those funds not only give the DAO financial security and independence of the game but also protection from other wider crypto and economic events. We would lose that security and risk the DAOs future for a short term gain for a few. I'm interested in long term growth, not quick wins and think about the consequences later plays.
I'm not sure I see the value in "independence from the game." If the game fails then I see no value in the DAO. If the possibility of such an event arises the DAO should be doing everything in it's power to keep the game economy alive. Doing so is far more valuable than having half a million in stables to fall back on after a game collapse.
But if we hold those stables and the company has issues they can be a safety net, or a safety net for any other event. If it is in DEC it is unstable and low liquidity and would provide a very small, if any, safety net as people would front run the DAO selling.
To put it another way, it is a popular opinion a diversified portfolio is more resilient to market conditions.
Sorry for being blunt, but this is a terrible idea. Why would you swap something stable, for something unstable? (please no flywheel BS)
You are stating that the DAO will step in to buy DEC when it is at 95% of PEG so it does not go lower, does the DAO have unlimited funds in order to buy up every sell pressure there will be?
The DAO should be diversified when it comes to it's holdings.
Great proposal, you have my vote
I am in full agreement with @cryptoeater and @holoz0r but also...
Seems pretty reasonable, basically boils down to the community comes together and uses our DAO stables to buy and burn (temporarily for now) DEC to reduce the oversupply.
I'm somewhere in the middle of supporting this and not. This all seems to me to be a mix of a stock buyback and the formalization of the DAO as the Central Bank of DEC. Very interesting and fun stuff. However, I'm definitely more in the "no" camp due to a few reasons.
Why use all the stable coins? Perhaps only use 20% and see the impact. Based on that impact, we can make some extrapolations before using up all the stable coins in the DAO.
The effectiveness of doing something like this should be somewhat empirical. I haven't pulled all the on chain metrics and done a deep dive on the tokenomics of DEC to tell you exactly how to go about this, but based on the current DEC demand and supply, we should be able to figure out the impact and if it's meaningful enough to carry out ahead of time. At the very least, having the hypothesis and testing against it is useful. For anyone interested, I would start with using the Equation of Exchange.
If it goes through, how will the DEC be repurchased? Is it one market order on a DEX? Or two on Uniswap and Pancake? Or three if you throw Tribal Dex? Carrying out a trade that you know will move the market is a different animal that topping off your DEC holdings. Having some clarity on how the purchase will be carried out would be useful and ensure if all the DAO stable coin funds are used, they are used as effectively as possible.
@swarminvestment's comments are super insightful as well. His comments made me do a hard reset on my reading of this.
Also - why the hell aren't the stable coins earning some yield somewhere? Curve perhaps?
How about we take that 500k and give it to Splinterlands team so that they can hire more people in order to accelerate features instead of trying to manipulate market since it won't have much value if most of the great important features are not yet delivered, rendering impossible the flywheel to get in motion? Just saying
I agree. I do not think that "humans" are the problem here, but rather the technical debt being paid off through the migration to the new codebase that is occurring via tech modernisation. I don't believe that more devs would solve the problem until after tech modernisation is finished.
Stupid question: isn't this proposal introducing an easy way to speculate on DEC price? With enough liquidity someone can crash DEC price, wait for the DAO to buy them back, and repeat.
To me having a DAO voting on this is too much manipulatory.
Time to add more comments. This is a bandaid on a limb that needs a tourniquet.
All for it.
At some point we need to find an exit strategy for the DEC that doesn't again flood the market with it. Maybe the team buys it for SPS to keep their DEC stocks up. It would stop them from burning for a bit but if we hit a bull market, 500 million dec will be burned through in a hurry.
But it does make you think, at that point they'd get a lot less SPS for the DEC as they would if they just took that $500k and bought SPS now. Something to think about.
Ultimately it depends on what you want to do with the DEC down the line. If you plan to sell it, I still think it's more valuable to buy now, expedite the flywheel, and the sell higher later.
But I personally wouldn't want to exit DEC at all. At least not this quantity. I'd rather use it down the line to fund the DEC liquidity pools so we can remove the SPS LP rewards and cut SPS emissions (because we have to do that anyways at some point).
Of course that is all a separate debate that is for another time. I think it's best to just hold the DEC for now to keep it off the market and reach par faster.
For me, I'm completely against the DAO being in the LPs. Any place where the DAO competes with players and investors for rewards is a giant no. But that's not what this is about.
I still like this proposal but as I think more about it there is a potential problem. If things get tight for the DAO, its likely going to be during a time when the game isn't doing well. If they have to fund something with USDT, that's fine, but if they only have the DEC and have to dump a bunch on the market (or pay someone with it who dumps) when the game is weak, that could be bad. Just thinking out loud.
This will help really a lot to the game ecosystem! i vote for yes!
Makes perfect sense to me. Just voted 1.4M worth
The Hive.Pizza team manually curated this post.
Learn more at https://hive.pizza.
Damn, that was a long sponsor video XD
I like this idea, I see no downside.
Either the game succeds and the dao keeps its value or the game fails and the dao loses money.
But if the game fails who cares about what the dao holds, everything will crumble down regardless.
So, lets do it.
If you see no downside, perhaps you should read the other replies from the community. There's a lot of downsides that incredibly well spoken people have outlined.
I vote 100% against.
It's an extremely dangerous gamble that could spell the end of Splinterlands, should the DEC be faced with a major hack or flaw.
It's a short-term solution to an old problem.
Buying DEC with some of the stablecoins available, yes, why not, but certainly not all of them.
DEC's recovery is certainly long and difficult, but let's not forget that it didn't collapse in a short space of time either.
Ongoing efforts and long-term initiatives need to be put in place.
I see this the same way. I'm a heavy handed no for this proposal. Unfortunately, it doesn't look like anyone is engaging with each other in the comments on this matter.
How can it be in the best interest of the dao to spend its modest reserves on something that has no value to it?
In your own wors "the DAO currently has no method of spending DEC"
I think the proposel is made with good intentions and has potential but i also think it is incomplete. If you add that the dao would also sell DEC at 1.05 for stablecoin then we would have a balence here. Dao would make a small profit and it would also replenish the stablecoin in the Dao.
I would also set a $ limit equal to roughly 20% of the dao's current holding of stable coin rounded to the nearest $100k so that it retains its diversification.
As it stands i will vote against it as i think it is to one sided as proposed.
Sounds like some DEC bag holders may be trying to cash out. I can forsee this scenario. This passes the price of DEC immediately pumps to .00094 and stays there until the DAO is drained. Why would anyone sell for less with the limit price already set by the DAO. Then sayonora suckers I got 95% of peg the rest of enjoy the price fall.
This is the most dangerous element of the proposal. I'm sure some bad actors are salivating at the potential of this proposal passing.
Side note first: I didn't realize we had over 300 ETH, we need to stake that somehow...
I'm voting no. I think this is potentially a good idea but given the choice of experimenting with a smaller % (20%, heck 50%) of the stable coins versus 100% is a no brainier for me. If it's going to work we should see that function without 100% of the liquid funds but we can keep some dry powder that way.
I think Bulldog makes a good point (the DAO is tied to the game for the foreseeable future, all our eggs are in the splinterlands basket so to speak) but putting all our eggs in the DEC basket/doing so all at once isn't a good idea. Keeping some liquid funds for other projects/buybacks/whatever is critical.
Exactly, no idea why someone would downvote that.
My vote doesn't mean shit but it's a NO for me.
just because of the symbolic effect the dao should do this. most people have the feeling that we have to bleed a lot last time to bring dec to peg and the dao prefers to trust in foreign stablecoins instead of helping even though the dao would not lose any value in the process. very bad signal !!!!!
The only thing this proposal does is devalue the Dao which we need to be as healthy as possible down the road once sps stops being distributed. This is a quick gimmick in the "peg at all costs" approach. This will only serve to be exit liquidity for the ones who bought dec far below its current rate. Why are we so hell bent to get to peg at all costs? Haven't we been told over and over about how much land and other things will "soak up dec". I just don't understand the logic behind this besides a method to extract value from the Dao. It's a no from me for sure. Get dec to peg organically, not by gutting everything and anything. If you care about the future of this eco system, I hope you can see the long term detrimental effects this could potentially have.
well the dec to peg at any cost attitude will remain anyway we will not be able to change that. what we can decide now though is whether the dao will now do its part or whether it will be forced by us in some unnatural way.
i mean just look at yaba's suggestion of how much dec we should burn to be able to use our soulbound cards on land. what do you think how much more of such things the game can take. until splinterlands dies completely and the dao is worth nothing anyway?
Why is this passing? Are we dumping DEC now? As long as there is no viable reason to hold dec as it is now, this is just going to be a pump and dump scenario where the DAO will be the loser of this proposal.
Let the economy do its thing. Forcing it will have an equal negative reaction.
Time to buy some DEC for a quick buck to trade when the pump happens before the dump
Kudos to @bulldog1205 for putting out this proposal. Regardless of the outcome it has brought about a much needed discussion.
I will certainly vote for this idea. I like it very much. Good job @bulldog1205 !!!
I urge you to reconsider your vote on the basis of the other comments that myself and others have left on this post proposal now that it has progressed to the in-game governance system.
There are many comments so I don't see which one you are in agreement with. I'm happy to reconsider if I saw any that made sense to me. I'd like to hear your thoughts.
I will say that I don't agree with these stated negatives:
this will drain the DAO of funds and be the end of the DAO if DEC goes lower or we get hacked.
If that happened to any meaningful degree, then the 500k in DAO funds would mean nothing in relation to the roughly $100m in total assets across the board. In other words we are always open to this risk, the DAO funds are irrelevant.
people will sell into it, and buy back later and make a profit.
Meaningless in the overall system. If people buy and sell the same amount of the token, then it doesn't matter. In order for this to be negative, people would have to argue this will make people leave that otherwise wouldn't. With the token trading roughly 86% of par, I don't see how the DAO paying up to 95% would do anything more than give a few people leaving a few extra $s.
people that talk about SPS inflation creating and endless negative loop
I don't agree with this at all. I'm happy to explain if anyone wants me to, but I'm very confident that
On the positive side I think its good to tighten up the slack in the system by having the DAO soak up a SMALL amount of DEC. I certainly don't think its meaningful though, and really not a big deal either way. The only way our whole economy grows is by increasing demand for assets. Right now the game has determined that DEC is the priority, but in reality it doesn't matter which one they picked as they need more assets coming in than leaving.
Again I respect you @holoz0r and would be happy to consider your arguments, so feel free to either write them publicly here or you can also DM me in discord anytime.
Thank you for participating in SPS DAO Governance @bulldog1205!
You can place or monitor SPS Stake Weighted votes for and against this proposal at the link below:
Link to this Pre-Proposal
Updated At: 2023-06-27 04:55 UTC
No brainer, easy to get behind this proposal,great thinking!
I voted no mostly because this proposal was not well defined. In essence a proposal should be written similar to a contract, and leave nothing vague or up to the imagination in its implementation.
Who is going to manage the funds? How long do they have? Which markets will they buy from, and what is a reasonable amount of slippage?
These are just starting questions, once answered new questions may arise. One must have a practical understanding of how this all works instead of an idealized version left to their imagination before they can use their stake to authorize such a commitment.
vejo que desconhece a proposta de governaça, nao é por especialista e sim por qum esta com a pele em risco com ativos SplinterLands
Your comment was hidden because apparently you're muted, yet it is about the most sensible thing I have read all day