Loosen Policy

Summary: Let's adjust system parameters away from LP accumulation and back in favor of stakers.

Background: We have recently brought in over $8m through bonds. Total protocol owned liquidity now exceeds $10m. Total queued rewards are now greater than 300k OHM (nearly 4x current staking pool) - 380k if you include what the DAO-held LP will mint. This is more than 3 months runway, 50% more time than when we started nearly a month ago.

Abstract:

I believe we should: Raise the LP bond BCV from 100 to 300 (66% less capacity) Target 16% of previous demand for dai bonds.

This should decrease supply output by 50%, but increase supply production by up to 400%.

We should also raise staking reward rate to target 250,000-350,000% APY instead of 100,000-150,000% (a 10-15% boost to the epoch rebase). This will make staking deflationary which should serve to correct some of the dilution experienced thus far. The market will readjust to supply as it now is, and then we can pick up into a new leg of larger treasury accumulation.

If this passes, a new proposal will be posed in one week to reassess. We should not remain in this state for too long - think of it as a cheat day.

Motivation: To allow the market time to readjust to supply in a lower-inflation environment.

For: Make the adjustments Against: Keep the system as is