WIP-4: Reallocation of Bribes to Promote vWINR Token Utilization

Proposals (WIP)
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Motivation

The motivation behind this proposal is to refine the incentive system of the WINR Protocol, to further encourage the use of vWINR tokens within the ecosystem. This proposal aims to incentivize users to convert their WINR tokens to vWINR tokens, thereby deepening their commitment to the platform and enhancing the value proposition of the vWINR token.

Proposed Actions

We propose a revision to the current Bribes mechanism within the WINR Protocol as follows:

Allocation Adjustment: All staking bribes will be exclusively allocated to addresses that are staking or vesting vWINR tokens.

Exclusion of WINR Stakers: Addresses staking WINR tokens will no longer receive a share from the bribes.

Transition Plan: Current WINR stakers will be entitled to claim any accumulated rewards up until the implementation of this proposal but will not accrue further bribes post-implementation.

Expected Effects

The expected outcomes of this proposal are manifold:

Increased Conversion to vWINR: By exclusively rewarding vWINR stakers and vesters, we anticipate a surge in the conversion from WINR to vWINR tokens.

Enhanced Token Value: Concentrating rewards among vWINR stakers and vesters is expected to increase the perceived and actual value of vWINR tokens.

Platform Commitment: As users convert to vWINR to benefit from the bribes, their long-term commitment to the WINR ecosystem is likely to increase.

Conclusion

In conclusion, this proposal is intended to catalyze a strategic shift in the WINR Protocol’s incentive structure. By reallocating bribes to only vWINR stakers and vesters, we are poised to create a more robust and committed user base, enhance the value of vWINR tokens, and foster a sustainable and thriving ecosystem. The WINR DAO’s governance will be essential in implementing this change, reflecting our community’s agility and responsiveness to evolving platform dynamics.

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Thank you for the proposal, Jack.

A few clarifying questions:

  1. Clarification of parlance used for “bribe” fees. Just bet staking generates “bribe” fees" and “swap” fees. Degens bet generates PnL fees and funding fees. Since bribe fees are only part of the staking formula, what does this mean for other fees–? Or are we using bribe fees as a catch-all phrase that encompasses all fees earned by stakers?

In short, are ALL fees being redirected to vWINR, or are some fees remaining for WINR staking?

  1. If no staking value will remain for WINR (at all), will the burn/unstaking fee be waived for folks currently staking WINR?

Depending on those answers, it would appear we are moving more to a GRAIL-like function for stakers, which makes sense.

Thanks in advance.

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I think it’s a good proposal for several reasons:

  • it would increase vwinr apr further pushing the “real yield” aspect of the protocol.
  • more vwinr means more long-term commitment.
  • it simplifies the current staking system which can be a bit confusing (no real point in having that winr/vwinr distinction imo).

It’s important to get clarifications on @Grandma’s questions above.

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  1. The only source of rewards for WINR stakers is the bribes. So, when that’s removed, there will be no accumulation of rewards for WINR stakers.
  2. Burn and unstaking fees will be zeroed during the migration.
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5

Yes, we urgently need to simplify the staking system,
then automate the distribution of bribe rewards.

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Hi, Jack.

Thanks for the answers.

I do find your answer related to bribes being the sole rewards confusing, given what is written in the docs here:

Could be I am misunderstanding something, but… what happens to these fees?

If all fees (as well as bribes) are being exclusively offered to vWINR holders, might need to clarify that in the proposal. Both JB and DB protocol papers describe fee structures that do not all fall under the category of “bribes.”

Cheers.

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My understanding is that revenue shared to stakers comes from (i) bribes (different types for JB and DB) and (ii) two types of fees from WLP and (iii) losses and liquidations from DB.

Would appreciate clarifications on this.

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8

I think creating a zero burn fee option for people wanting to migrate from WINR > vWINR
Is a must.

But i also think that the staked WINR that dont want to migrate would need to pay the 0.5% burn fee as per the rules today, so that all «short term» WINR dont get a free unlock on the expense of vWINR holders.

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I think need to give more incentives for vWinR holder who staked like jackpot so at least they holding and bet for the luck.

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I have mixed feelings about this proposal.

From one side, I agree with the direction the team is trying to take here. Stakers need to lockup their tokens for a predetermined period in order to get rewarded. So, offering rewards for stakers when there’s zero obligation by holders to hold their tokens for a minimum period of time doesn’t help the protocol.

But, I also have to point out that the current system of 6m lockup for vwinr holders is not attractive for anyone to convert. I believe there should be a smaller, but reasonable vesting period in which vwinr holders should be rewarded. My idea would be the following:

  • Reduce lockup period from 15 days - 6 months to 7 days - 30 days. We can even maintain the same burn ratios depending on the vesting period selected by the holder.

  • Remove reward during vesting period.

  • This would still be a reasonable time for holders to have their tokens locked, aligned with the industry as a whole. And the most important thing, I believe this is needed in order to attract more holders to stake and lockup their tokens. The higher apr would also incentivize people to stake their tokens. The problem is that it’s difficult to offer such an apr that can convince someone to lockup their tokens for 6 months.

  • Also, I understand the team wants to rewards investors who has a long term strategy regarding winr. But, in my humble opinion, we should actually try to convince even short term investors to have their tokens staked. Those are the ones who we should be trying to convince to convert.

  • I understand such a change might seem too drastic. For this reason, I believe it could be done following a 6 months schedule in which, after each month, 1 month is reduced from the max vesting period for vwinr holders. So, this change would be concluded only after 6 months of transition. The way I think, during this period we would actually start to see a big increase in the number of tokens being staked.

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I think the team should consider the proposal of “rib”. The vesting period award is not necessary. (Although I have a lot of VWINR in staking). We need to simplify the staking system and distribute the pledge reward automatically. Make WINR’s token economics simple and straightforward.

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Could not disagree more.

Vesting yield is the reason we can get away with A ) the gamified vest options, and B ) the 180 day full redemption period.

The proposal essentially brings us in line with the GRAIL tokenomics model, from which WINR was partially based.

Reducing the vest period AND removing vesting yield essentially invalidates the whole reason for making this switch in the first place, as it just incentivizes mid-/short-term capital to harvest the yield on shorter time frames.

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A 7-30 day vest is not long enough and only benefits short term actors. No one would burn half of their tokens to quick vest in 7 days versus 30, effectively crippling one of the major deflationary elements we have.

I think @Grandma is correct here that it kind of defeats the purpose here. No yield during vesting will mean less conversions overall.

I don’t agree with this argument.
Grail for example, in real yield, is at 19.14% today and the average is around 18-22% for the past month or so. They have the same 6 months vesting (since winr was somewhat modeled after grail) with 1/2 rewards while vesting. With real yield apr can be lower because we’re not fighting eachother to sell the yield first. No one needs triple digit apr outside of sketchy farm tokens to lock in. The landscape has changed and people will follow.
Radiant is another good example with a 6 month lock coming in at 14% apr yet is still growing with new locks every day, and thats not even single staking, thats an LP with IL.

I think with the v2 changes on the horizon and increased volume 14% is easily attainable. That’s before we even add in the value of products we don’t have yet.

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I think we should also look in how other projects do, not only on Arbitrum ecosystem. The majority of tokens with some mechanism of staking implemented has a shorter unlocking period than the 30 days I’ve proposed. And a lot of those has over 50%, even 70% of the supply staked. So, I don’t believe this would only go in favour of short term investors.

I believe what we actually should go for, is trying to convince even short term investors to stake their tokens. As things stands atm, I believe even majority of long term investors are not converting and staking, because the risk is too high to do it. Actually, the bigger portion of the VWINR supply is already under vesting. Only 20% of the total circulating supply (winr + vwinr) is staked currently. I don’t see this changing by much with this proposal.

My idea about removing rewards during vesting period is exactly because we would have a shorter vesting period. So, there’s absolutely no reason to keep the tokens in vesting instead of just leaving them staked.

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The point here is to discuss the above proposal, not the reduction of the staking period.

The major impact of the proposed change would be to increase VWINR APR. This would lead to more tokens staked even we don’t know how many. If you think additional measures are required to increase staking %, make another WIP.

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16

Hey guys, let me first clarify some points about bribes. Bribes are fees WLP pays to token holders and core developers. Token holders and developers help with the protocol’s governance, marketing, and expansion, and the primary beneficiary of this growth is WLP holders, who pay an upfront bribe (or revenue sharing) to ecosystem participants. This list will later have frontend operators and gaming providers as additional participants in the ecosystem in the coming months.

Currently, the bribe fluctuates between 0.75% and 1.25% of the bet volume for casino games with a clear mathematical edge. This is roughly half of the median edge of the available games.

On Monday, the 4th of December, Degens V2 will launch with many new shiny pairs and a smoother experience. Half of all the losses and liquidations will go to ecosystem partners in the form of bribes, which will be included in the daily distribution.

Apart from token holders and core developers, which take 65% of the bribes, 35% of the bribes are distributed as 10% of the distribution going to Jackpot and 15% of the distribution going to buyback and burn.

On top of the bribes, ecosystem participants have another source of income: the swap fees charged when buying, selling, or swapping through WLP.

Our proposal includes having half of the rewards for vWINR put into vesting, as this may be an option for some to have access to liquid WINR at any time and still receive half of the original rewards. However, changing timeframes is an idea we can all entertain.

Migrating from the old contract to the new one would charge no burn fees, as this variable in the smart contract was set at 0.5% and could be set at 0% when the migration is ready.

Check out our post at WIP-5, which we believe should be merged into a single vote alongside this proposal: WIP-5: Token minting improvement - #2 by WINRProtocol-Jack

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