But let´s not get caught up in the philosophy of how to conduct business. I´m aware that I won´t change anyone´s mind who thinks that this is okay, and you won´t change mine.
More importantly I think that the proposal is flawed on a strategic level and can easily backfire as mentioned in my first post - which interestingly nobody addressed.
For reference, here is an excellent comment from the first tokenomics discussion that outlines that the dumping comes from private investors & surge participants much more than traders, who are used as the scapegoat here.
Not only will additional restrictions decrease volume & fees and increase risk for HLP providers, it also doesn´t solve the problem.
Instead of trying to forcefully reduce the selling side by hampering farmers who provide volume and actively balance OI, a more sustainable and productive operation is to give more options to investors & users.
There have been great suggestions in this thread that went largely undiscussed. A short summary:
@SeabassCity: increase rewards / apply penalty based on some condition
@MORE: Remove the 21-day unstake restriction (less friction = more value)
@MORE & me: Provide vesting options with an exit fee (burning or redistribution to long term aligned stakers, e.g. esHMX or DP)
@Shift in HIP3 & me in HIP5: Implement ceiling for DP based on staked es/HMX. (esHMX could even have a higher ceiling and/or DP accrual rate, giving higher long term earning potential to maximally aligned stakeholders)
The argumentation from the side that wants to prevent selling always seems to be “dumping bad, let´s freeze everyone´s assets” which is incredibly short sighted.
Treating symptoms instead of the root cause is a certain way to a malfunctioning system, so I´d urge everyone to reconsider and discuss constructive ways forward instead of increasing penalties.
Hey Dragons! Thank you all for your valuable feedback and active participation in discussing this HIP.
In order to streamline the voting process and ensure a smooth governance experience, we will split the vote into two parts since one component of this proposal is far from achieving unanimity.
We will wait one more day before submitting this HIP for a vote. Starting tomorrow, we will initiate the vote on adding DP as a requirement for vesting esHMX, while keeping the same 12-month vesting period.
If this first vote passes, we will then submit the second part regarding changing the vesting period for a vote.
Guys, sorry I just saw this proposal and discussion, but this is a very short-sighted proposal that only focuses on a very small part of the equation, and I actually think is a net negative in the long run. More concerning is the moral implications that should not be part of governance.
HMX should be focused on user acquisition for when market conditions improve. By making the exHMX token harder to realize it’s value, you are lowering it’s perceived economic value, and therefore disincentivizing the actions that a user would earn exHMX. The author’s position appears to be that making the token harder to sell will relieve sell pressure and therefore help token price, but fails to look at the demand side of the equation. Lower perceived economic value + less trading activity = lower demand. So sell pressure falls, but so does buying pressure as well as incentives for increased trading activity. I don’t think the author is presenting this
dishonestly, but I do think they are being short sighted as I know we are all in desperation mode in the current market conditions.
But I think more importantly, I cannot stress this enough, the author is proposing we make these changes to existing esHMX vesters. This poses a moral issue and should not be part of a democratic process. While I understand the frustration with mercenary capital, those folks entered an economic transaction under a certain conditions, and HMX should not change those terms after the fact. This is not a democratic vote if those farmers are not able to take back any of the economic losses they might have incurred in obtaining the exHMX tokens (trade fees, trading losses, interest paid, etc). We cannot prove that they would have entered that same transaction if terms were different, and therefore would need to compensate them for any losses occurred if we want to do the right thing, which is not even feasible at this point. There are very important reputational impacts to this proposal that are being glossed over.
One user above mentions not being able compare the esHMX vesting to a contract. But this is false. When a user enters an economic transaction with expectations of certain economic benefits and terms as outlined in HMX’s documentation, this is exactly what a contract is. I’m not saying to bring law into this, but there is precedent for these types of things in the real world we should take note of.
I am a long term staker (not a dumper), but this type of proposal is very concerning to me as someone looking at the long term health of the protocol, not just the short term token price. Take care of attracting more users, and token price will take care of itself. More friction = less users, lower token price. I wish I was a marketing guru to know what to suggest to bring in more users, but that’s where the focus needs to be.
We could change the allocation so that HMX stakers get additional esHMX and it would come from esHMX that traders earn if they do not vest all the way to the 36 months then a exponential amount would be vested as they get closer but if they cash out early most of the esHMX would then goto HMX stakers as a bonus forfeiture reward and it would need to be vested by the HMX staker that receives the bonus so that if esHMX that they now can vest and receive the forfeited rewards. That incentivizes esHMX holders to vest over 36 months and also hold HMX to avoid a large forfeiture penalty of esHMX that is vested. Having a mechenism that transfers CF to HMX stake holders if people are just trading for esHMX and dumping will incentivize holding the token to get the full rewards. Make the penalty like 50% or something so it really incentivizes people to hold HMX or give up some to the HMX stakeholders if they do not want to hold HMX themselves.
There is a partnership with FLEX perpetuals a new perp exchange that is using HMXs codebase to build a perp exchange on base and arbitrum for a revenue share to HMX. I confirmed with the team that the revenue share is not part of any revenue that goes to HMX stakers. I also asked if we were to vote that all or a portion of it be included in the revenue share could it be and am waiting on a answer. If it can be voted to be included in distributions or used for additional token buybacks it should be voted to do so as the token will become more valuable if cash flow increases as that is the main reason the token has value is the cash flow. Lately it has been lower than before which is why along with the selling pressure from esHMX vesting is causing the price decreases. If we can add a increase in cash flow to the tokens via the revenue share or a possible FLEX token drop to HMX holders which I would need to ask FLEX and see if they plan on doing any incentives like that with HMX as that would also increase the token price at least as long as the theoretical drop goes on and if there is a allocation make sure it gets distributed in a way that incentivizes keeping HMX staked and esHMX staked as well.
Could be a opportunity with FLEX perpetuals a exchange that is using HMXs codebase for a revenue share. I am assuming there will be some promotion from FLEX to HMX and as of now there is not any promotion from HMX to FLEX users. Likely since FLEX is in the seed stage raising capital right now but I asked the team about the revenue share being included in the HMX cash flow if it was voted so we can see what they say about that. I am also going to ask the FLEX team about any promotions they may be thinking about for HMX stakers maybe they will give some sort of AIRDROP to HMX stakers of the FLEX token that could be extended out a number of years to help also incentivize holding HMX.
HIP-5 part 1 has been voted and we will be implementing the DP staking requirement for esHMX vesting as suggested by the proposal.
Vote result: Snapshot
The second part of HIP-5 has just gone live. Vote HIP-5 part 2: Snapshot
Part 2 of this proposal, along with Part 1, does nothing to incentivize long term users of the platform. We need to be focused on attracting users. These changes to tokenomics are fine for those who hold liquid/staked HMX already, but this isn’t moving the needle as far as this project goes. Seeing these proposals pop up it is now clear we are choosing a vanity metric of short term token price over the long term success of the project.
Attract users. This tokenomics change, at best, does nothing for that goal. At worst, turns away short term users that had potential to become long term users. What does this proposal do to attract long term buyers of the token? Instead we are (for some reason) focused on restricting the few people who actually used the platform from selling? Doesn’t make sense.
Look at any successful project or brand (doesn’t have to be crypto). They all had short term users. But instead of stomping them out, those brands were able to successfully turn short term users into long-term, or the attract enough long term users to where the short termers leaving became irrelevant to the project.
If we pass parts 1 and 2 here, why even give out the token as a reward for trading in the first place? It’s basically worthless to any newcomer at that point.
Hey Dragons, here is a draft for part 3 of HIP-5 which concerns the retroactivity of HIP-5 that we are suggesting following the various discussions that took place after the votes on HIP-5 parts 1 and 2.
Background:
This proposal follows the community discussions on HIP-5 part 2, which introduced an extended vesting period for esHMX tokens of 36 months. This proposal aims to clarify the treatment of esHMX tokens that were already in the vesting process prior to the implementation of the new tokenomics changes.
Objective:
To determine whether esHMX tokens that were put into vesting before the HIP-5-2 vote (Jul 15, 2024, 09:00 AM UTC) should be exempted from the DP requirements and the new 36-month vesting period proposed in HIP-5 part 2.
Proposed Change:
Exemption for existing vesting esHMX: esHMX tokens that have been put into vesting before HIP-5-2 vote (Jul 15, 2024, 09:00 AM UTC) will not be subject to the new extended 36-month vesting period or the DP requirements. These tokens will maintain their original 12-month vesting period.
Summary of the proposed change:
If you vote FOR on this proposal, esHMX tokens already in vesting before the HIP-5-2 vote (Jul 15, 2024, 09:00 AM UTC) will maintain their original vesting criteria - 12 months and no DP requirements.
If you vote AGAINST on this proposal, all esHMX tokens, including those already in vesting, will be subject to the new vesting conditions - DP requirements and extended 36-month vesting period.
This draft/proposal even if it passed eventually, it helps little to save the damage caused. Why? It is about timing. This draft/proposal appeared only right after the team repeatedly announced that vesting will change to 3 years and DP burned after July 26th. So, many who have already in exiting vesting condition would have already unvested (almost 90%+ I would say). So, what is the use of this so-called “modification” unless you will allow those who already unvested due to the “misleading” announcement have their vesting schedule returned to previous condition (with same same remaining vesting days)?
Hey mei, people had several days to become aware of these votes, and we made significant efforts to highlight them. The vesting period change didn’t create much controversy initially and even passed during the vote. It was after the vote that it caused a lot of noise, which is why we proposed this Part 3. If this vote passes, it will provide relief to those who already have tokens in vesting, while maintaining the changes from HIP-5. We’re trying to address the concerns that emerged after the initial vote, while respecting the decisions made by the community through our governance process.
Damage has not yet been done, I believe you will be able to re-vest in previous terms. The only change this proposal adjusts is the backward application on already existing vesting. The original HIP5.1 in combination with HIP5.2 applying ex post would cause an unprecedented situation that would in practice just bring a lot of distrust to the platform and not affect the sell pressure much (or at the end of the day most likely just add up to it). Basically team would break a “contract/rules/promise”. That would be in direct contradiction of team’s intent and future development of platform. In industry were no one trusts no one, aka crypto, the trust is the only thing you can build on.
HMX has a very interesting underlying tech and generally the market conditions have not been very good. Team needs to focus on improving the platform and provide market condition better than competition in order to make the HMX token more appealing to investors. Rather than making investors exit harder thus dethering them from investing at all. You can check some of the ideas we provided either here in the forum or DC chat.
I agree, building trust and reliability is very important for the sustainability of a blockchain project (that and of course the tech and offering something superior than the competition).
The Forum and Discord have A LOT of suggestions and ideas that haven’t even been touched/discussed by the team yet. I think, if ignored that could be a major oversight on their part. But I’ll remain positive regarding the team’s proactiveness in incorporating community ideas and fostering constructive discussions (even fair governance decisions, if it gets that far).
I think we should just vote to see what the majority thinks. At the end of the day, the voting result will be the one that determines what the platform should do.
We’ll see if this is the case of a “loud minority” or do these comments actually represent the majority viewpoint of the protocol.
Vote HIP-5 part 2: