Hi everyone,
I´m the founder of Possum Labs and we have built a protocol for upfront yield on top of the HLP called “Portals” in Nov/Dez last year. As an early ecosystem partner, I want to speak for Possum Labs on this matter.
For context, our system is accumulating esHMX and stakes it forever. USDC yield from the staked esHMX is used to pay even more upfront yield on staked HLP by our users, so we´re re-investing by default, helping the HMX platform to retain value.
Our contract is immutable, so this policy will never change. We are a permanent HMX sink and long term aligned with the HMX project.
The suggested changes would not affect us or our users directly since we never vest esHMX anyways. From a short-term and self-serving point of view, we would be indifferent to the proposal.
That being said, I would also like to give my personal opinion since I´m a holder/staker of HMX myself and since our HLP Portal is an important building block of our protocol, I´m naturally interested in the long term success of HMX.
I agree with the point of previous posts that changing fundamental mechanisms related to the token at this point is premature and can easily backfire because it shakes up trust in the economic relationship between protocol, users and investors.
However, I welcome the proposed re-allocation of esHMX rewards. These adjustments don´t disturb the trust basis unlike a mechanism change and already improve the financial dynamics significantly.
Cutting TLC and open position rewards in half has a direct, alleviating impact on sell pressure (perhaps delayed but still). Increasing the esHMX rewards for HMX/esHMX stakers directly increases the economic prospects of staking versus vesting which further reduces sell pressure and can even lead to net buy pressure.
It´s also important to consider in which phase of the market cycle the industry is. There is pretty much no perp DEX token out there that performs well at the moment. This is not an issue exclusive to HMX.
DeFi is heavily oversold because monkey brains ape into memes and celebrity rugpulls instead of looking for quality investments. This will change as more money flows into the market, like it always does.
If HMX stays secure and alive, the current challenges will sort out themselves with some patience. In the meantime, aligned investors can acquire more HMX by compounding the significant protocol yield, meaning that tokens change from weak hands to strong hands. This is much healthier than delaying the dump by weak hands.
HMX is one of the, if not the single best real yield token on Arbitrum. There is no need for rash actions.
Analysing the metrics from your very own Dune Dashboard also underpins this conclusion.
https://dune.com/hmxintern/hmx-tokenomics
Specifically, the charts of historical HMX staking as % of circulating supply speak a clear message: Stakers are sticking around and increase their bags.
The absolute number of staked HMX is also increasing faster than HMX in wallets or LP, indicating attractiveness of HMX staking.
Lastly, the percentage chart of esHMX locations shows that the share of staked esHMX is quite stable in the range of 40% to 60% since September last year. That´s 8 months’ worth of data that indicates a healthy balance - and no concerning trend to see.
Imo the HMX tokenomics are rock solid and healthy.
The sluggish price is a product of the current market environment and is an opportunity if nothing else.
Experimenting with different esHMX allocations is certainly a good idea and doesn’t impact trust from users and investors - unlike a mechanism change that impacts the very fundament of financial considerations.
I recommend to reconsider and not implement a mechanism change but I support esHMX reward allocation experimentation as proposed.
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