New mechanism proposal

Mechanism Changes: RealYield and bond dividends generated by the national treasury will be allocated 100% to Staked ACID instead of 100% to Locked ACID. Cancel the esACID rewards for Staked ACID; only Locked ACID can receive esACID rewards. Unlocking esACID requires doubling the amount of ACID staked or locked, changed to requiring double the amount of ACID locked. The esACID vesting period changed from 30 days to 60 days.

Summary: Essentially, the treasury's rights are split into two parts: returns and principal, changing the game mode. Locked ACID: Similar to forced holding of ETH and continuously gaining ETH-denominated growth (Bonds will inject more ETH into the national treasury) and will be rewarded when ETH reaches 10k USD (the treasury's target liquidation price). The cost is that it cannot obtain the income generated by the treasury's assets before the treasury is liquidated. Staked ACID: All of the treasury's ETH (LSD) assets provide high ETH returns for Staked ACID continuously. 100% of the protocol's revenue and bond sales dividend part are allocated to Staked ACID. Staked ACID has no lock-up restrictions and can be staked or withdrawn at any time. FAQ: Q: Will the income of Locked ACID decrease? A: No, the protocol's goal is to maximize the growth of treasury assets, and this change can better achieve this purpose. In the end, Locked ACID can get more ETH when the treasury is liquidated. Q: Do all Locked ACID users only benefit from treasury liquidation? A: No, users who lock ACID can get esACID rewards, and asusual, they can be converted into real returns by vesting into ACID. If they sell ACID, they can cash in their current earnings, but this will have a dilutive effect on their share of the treasury. Assuming that most Locked ACID users want to maintain their share in the treasury, they need to keep compounding, avoiding more immediate cashing out of earnings (ACID). When someone chooses to cash out their earnings immediately, it means that the share of other Locked ACID users in the treasury who did not cash out their earnings will increase. Q: Why choose to give all Real Yield to Staked ACID? A: This provides a new utility for Staked ACID while also preventing the possibility of excessive earnings realization for Staked ACID. This further reduces the circulating ACID market value. Since we have a bond system, a lower circulating market value means more stable market performance, which ultimately benefits bond sales and the overall growth of the treasury. Staked ACID is essentially the most critical part of the protocol's growth. Q: Will canceling the esACID rewards for Staked ACID break the balance of the protocol's returns? A: No. Staked ACID currently accounts for about 20.6% of the total market value. If all Locked ACID's wstETH rewards are transferred to the Staked portion, they can receive at least 60% of the Real Yield rewards, assuming the future treasury growth revenue (Bond sales share) is not yet calculated. We are highly likely to provide an extremely high Real Yield APR for Staked ACID users. Q: What if Staked ACID gets diluted too much? A: The dilution of Staked ACID is the dilution of Real Yield returns, not the price. We can break this down into several situations: Locked ACID receives esACID which vests into ACID. By not performing a new Lock operation on the vested ACID, and choosing to Stake instead, this action then causes the real dilution to the circulating ACID (affecting the price). If users choose to compound their Locked ACID position, there will be no real dilution. When ACID is issued through bond sales, and users choose to stake, there will be no real dilution. Currently, 10% of bond sales revenue is shared with Staked ACID as Yield distribution, which to some extent compensates for the dilution. When Staked ACID earnings are used to buy ACID and continue staking, real dilution may occur. However, if it is purchased through the bond system, the situation described in the second point actually occurs. In summary, the proposed changes aim to optimize the allocation of rewards and resources between Locked ACID and Staked ACID, ultimately promoting the growth of the protocol and providing users with a more balanced and sustainable system.

Notes: 1: The proposal voting period is 24 hours. 2: All unlocking of esACIDs will stop immediately after the proposal has been voted on and passed. All users are encouraged to remove any esACIDs in the unlock process as soon as possible and wait for the new unlock pool to come online. 3: All new mechanisms will go live on the 3rd of April.