CIP006 - Splitting the reward rate between Otter Pond / Lake

Summary Lower reward rate of Otter Pond(3,3) to decrease the inflation issued by a high APY. The Idea is to move most of the rewarding distribution to a new mechanism that will be our Otter Lake. Provided by the allocated DAO funds and other planned mechanics. This would support the price as the less token will be printed every rebase, the less the market cap gets diluted on supply. Explanation: Price = Market Cap / Total Supply

Proposal We plan to lower the reward rate caused by the Otter Pond. The reward rate currently is at 0.5% of total supply and is planned to be decreased to 0.1% - This is planned to happen linearly over a period of 30 days. The motivation behind this is to decrease the inflation rate that is being output currently (500,000% APY would require a 5000x within a year to be sustainable at current price). Thus, we will introduce a mechanism called the PEARL vault that will be non-inflationary due to having pre-minted token re-distributed to you, the stakers. The tokens are provided by the DAO and more planned mechanics in the future. The idea behind this is to combat also rebase hopping (going from DAO to DAO to reap rewards and use stakers as exit liquidity). The final reward rate planned for Otter Pond as of CIP007 would be 500% APY - being 20% of the total reward rate, and a much higher yield planned for Otter Lake, aimed to be 80% of the total reward rate. Otter Lake are planned to be released at the end of this week, or we will start 2022 with an otterly amazing new mechanism. In short, APY of Otter Pond goes down to 500% and the other 80% that’s left would move to 400,000% APY on the Otter Lake.

The details of Otter Pond / Lake: https://otterclam.medium.com/introducing-pearl-chests-and-pearl-notes-70a61748963f

Vote The options will be:

• For - Incentivize to lower the APY of Otter Pond to an emission rate of 20% of total (0.1%).
• Against - Do not lower the APY and keep at current emission rate.