[HIP-7] Sport Specification Proposal: Bribing

I. Introduction

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We are pleased to introduce the 'Bribing' Sport, a new category within the 'Hermes Olympics' also known as the Hermes Partnership Program.

This initiative seeks to invigorate competition, growth, and community involvement among participating protocols, all while upholding the highest standards of transparency and ethical conduct. This document delineates the key features, execution strategy, governance implications, community engagement approach, subsequent actions, and the decision-making framework for the seamless integration of the 'Bribing' Sport into the ‘Hermes Olympics’.

II. Background and Rationale

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Our initiative is deeply anchored in Ethereum's foundational tenets: decentralization and an unwavering allegiance to open-source development. We prioritize alliances with protocols that resonate with these principles, either through open-source endeavors or a steadfast commitment to decentralization.

By aligning with Ethereum's ethos, we aspire to cultivate a dynamic ecosystem of projects unified by a shared vision of transparency, inclusivity, and community-led innovation. We are convinced that decentralized protocols are pivotal in harnessing the full potential of blockchain technology, ensuring enhanced security, robustness, and scalability.

III. Considerations

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Crafting an equitable reward distribution mechanism for an event like the Hermes Olympics demands a nuanced approach that harmonizes multiple variables. The methodologies under consideration include:

1. Time-Indexed Rewards: To level the playing field, rewards could be apportioned based on participation duration, ensuring equitable distribution throughout the Olympics.

2. Merit-Based Rewards: Rewards could be allocated in line with participants' performance, gauged by metrics like EV+ actions, bHERMES accumulation, or burning $HERMES.

3. Stratified Rewards: A tiered system could be employed, where top achievers garner a more substantial reward share, but all participants benefit.

4. Stochastic Rewards: Introducing an element of serendipity, sporadic bonus rewards could be granted to random participants.

5. Community-Powered Voting: Empowering bHERMES holders to influence reward distribution based on participants' performance or community contributions.

IV. Proposal Details

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A. Determining each Protocol’s Rewards

In the 'Bribing' Sport, prizes for protocols are determined in accordance to the liquid dollar value of their deposited assets. These assets are valued using the Time-Weighted Average Price (TWAP) of the following week. Notably, assets added during the 12-hour grace period at the end of each epoch won't count. This ensures fairness and promotes meaningful asset contributions.

• Bribes based on ETH

At the end of the season, a submission with detailed information on amount and value of bribes needs to be submitted by or on behalf of protocols to a joint governance proposal for reward allocation and distribution.

B. Olympic bHermes Sustainability

The ‘Hermes Olympics’ Grant Program is to be funded an allocation of 30,000,000 bHERMES tokens as approved by governance in [HIP-5] Hermes Olympics: Ecosystem Retroactive Grant Program .

As we approach the launch of V2, we are closing in on a total locked supply of about 120,000,000 veHERMES and 1,000,000 in rebases per week for veHERMES distribution.

Based on 30,000,000 bHERMES minting for the Hermes Partner program, the weekly reward pool would consist of 200,000 $HERMES. Thus, a 12-week season would amount to approximately 2,400,000 $HERMES in distribution.

The chart below gives a historical overview of emissions to liquidity providers and distributions to veHERMES voters. While this data is insightful, it's essential to understand its limitations as the past cannot accurately predict future behavior.

The chart above gives a historical overview of emissions to liquidity providers and distributions to veHERMES voters. While this data is insightful, it's essential to understand its limitations as the past cannot accurately predict future behavior.

What we can infer from this data is how the market and protocol react in situations with fewer locks and gradually increasing emissions. In simpler terms, this refers to a scenario where emissions in each successive week are greater than those from the previous week.

The chart presented above delineates the anticipated growth trajectory for 30 million $bHermes, based on an assumed 43.3% Annual Percentage Yield (APY) while allotting a constant weekly rewards of about 20% of distributions through the Hermes Olympics.

By week 52, the allocation of 138,952 bHERMES corresponds to 200,000 $HERMES. This relationship yields a bHERMES to HERMES ratio of 1.42 It is imperative to note that this ratio is predicated on the maintenance of a constant 43.3% APY.

In a hypothetical worst-case scenario where the locking ratio in V2 mirrors that of the current V1, the Hermes Olympics contract would distribute a total of 27,208,249 $HERMES over a period of 52 weeks. This would be equivalent to 19,198,685 bHERMES, with over 11,000,000 bHERMES still left in the Hermes Olympics contract.

On the other hand, in a best-case scenario with increasing locks and decreasing emissions and distribution, the following chart summarizes what we may potentially see.

| Week | Initial Circulating Supply | Weekly Decrease | New Circulating Supply | Minimum Weekly Increase | Weekly Rebase | New APY (%) |

| --- | --- | --- | --- | --- | --- | --- |

| 1 | 80,000,000 | 800,000 | 81,200,000 | 1,600,000 | 1,000,000 | 43.3 |

| 2 | 81,200,000 | 812,000 | 80,388,000 | 1,607,760 | 987,760 | 6.99 |

| 3 | 80,388,000 | 803,880 | 79,584,120 | 1,591,682 | 975,841 | 6.88 |

| 4 | 79,584,120 | 795,841 | 78,788,279 | 1,575,766 | 963,765 | 6.77 |

| 5 | 78,788,279 | 787,883 | 78,000,396 | 1,560,008 | 951,765 | 6.67 |

| 6 | 78,000,396 | 780,004 | 77,220,392 | 1,544,408 | 939,808 | 6.57 |

| 7 | 77,220,392 | 772,204 | 76,448,188 | 1,528,964 | 927,964 | 6.47 |

| 8 | 76,448,188 | 764,482 | 75,683,706 | 1,513,674 | 916,374 | 6.38 |

| 9 | 75,683,706 | 756,837 | 74,926,869 | 1,498,538 | 904,837 | 6.29 |

| 10 | 74,926,869 | 749,269 | 74,177,600 | 1,483,552 | 893,552 | 6.20 |

| ... | ... | ... | ... | ... | ... | ... |

| 52 | 56,896,122 | 568,961 | 56,327,161 | 1,126,543 | 536,543 | 4.88 |

Legend:

• Initial Circulating Supply: The circulating supply at the beginning of the week.

• Weekly Decrease: The amount by which the circulating supply decreases due to locking or other factors.

• New Circulating Supply: The circulating supply at the end of the week.

• Minimum Weekly Increase: The minimum amount by which the supply must increase (at least 2% of the new circulating supply).

• Weekly Rebase: The amount by which the circulating supply increases due to rebases, calculated as a percentage of the new circulating supply.

• New APY (%): The new Annual Percentage Yield calculated based on the minimum weekly increase and the locked supply.

Note: The APY values after Week 1 are illustrative and calculated based on the minimum weekly increase and a locked supply of 120,000,000. The actual APY would depend on various factors.

| Week | Weekly Rebase | 20% of Weekly Rebase | Cumulative Sum of 20% Rebase |

| --- | --- | --- | --- |

| 1 | 1,000,000 | 200,000 | 200,000 |

| 2 | 987,760 | | |

| 3 | 975,841 | | |

| 4 | 963,765 | | |

| 5 | 951,765 | | |

| 6 | 939,808 | | |

| 7 | 927,964 | | |

| 8 | 916,374 | | |

| 9 | 904,837 | | |

| 10 | 893,552 | | |

| ... | ... | ... | ... |

| 52 | 536,543 | 134,136 | (Cumulative sum up to Week 52) |

Approximate Cumulative Sum up to Week 52 =2(250,000+134,136)×52=2384,136×52 =9,987,536

In this scenario, even after 1 year, the Hermes Olympics would have spent approximately 10,000,000 worth of bHERMES

💡 It's important to note that these allocated bHERMES for the Hermes Olympics are not transferable — they cannot be converted to either $HERMES nor regular $bHERMES. Partners may only claim its unique bHERMES child tokens to use for Voting (v-bHERMES), Boosting (b-bHERMES), and Governance (g-bHERMES).

C. Determining Rewards Allocations

The concept of "seasons" within the Hermes Olympics serves as a strategic framework for periodically reassessing and realigning resource allocations. Each season offers an opportunity to re-calibrate the percentage allocations for various activities and initiatives, such as 'Bribing,' 'Accumulating,' 'Tooling,' and 'Integrations.'

For the inaugural season, we suggest allocating 40% of the available bHERMES distribution to the sport of 'Bribing.' The remaining distribution is proposed as follows:

• Accumulating: 50%

• Tooling: 5%

• Integrations: 5%

This structured timeline also provides us with time to evaluate the effectiveness of current allocations and making data-driven decisions for future distributions. This ensures that resources are being utilized in a manner that aligns with the evolving goals and priorities of the Maia DAO ecosystem.

💡 The seasonal approach allows Maia DAO Ecosystem and Hermes Protocol to adapt to changing conditions, market dynamics, and community needs.

V. Implementation Plan

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A. Proposal Refinement

The 'Bribing' Sport proposal will be subject to community discourse and feedback, with all pertinent insights integrated into the final version.

B. Hermes Olympics Integration

The 'Bribing' Sport will be seamlessly incorporated into the Hermes Olympics platform, complemented by a user-friendly interface for community exploration and voting.

VI. Governance Considerations

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A. Transparent Voting Framework

All governance decisions pertinent to the 'Bribing' Sport will adhere to our decentralized decision-making paradigm, ensuring unwavering transparency and security. This mechanism will facilitate community-driven amendments, allowing the sport to evolve in response to emerging needs and dynamics.

VII. Community Engagement and Support

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A. Educational Endeavors

We will spearhead educational campaigns to enlighten the community about the 'Bribing' Sport. Regular updates, leader-boards, and data on emerging contenders will be disseminated, equipping community members with the insights needed for informed voting.

VIII. Next Steps and Decision-making Process

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A. Proposal Endorsement

Upon securing community consensus, the proposal will be ratified, confirming the bHERMES token allocation for the 'Bribing' Sport for Hermes Olympics.

IX. Conclusion

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We are confident that the 'Bribing' Sport will be a transformative addition to the Hermes Olympics, fostering collaboration, innovation, and integrity. As a Decentralized Autonomous Organization (DAO), we solicit the community's active engagement to ensure this initiative's success.

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