Some comments from my personal DeFi perspective and company validator perspective:
- Simplicity in tokenomics is key, dYdX has this currently but it won’t under the proposed changes. Telling a story of 100% of rewards go to stakers and the only inflation is community pool spends and trading rewards is easy to understand and navigate. I therefore propose the incentive for the MegaVault doesnt come from the Fees, it should come from the community pool/Token itself. Incentivizing the Megavault with dYdX will enhance liquity and trading will still paying out stakers sufficiently with fees. Now a simple discount can be put on the staking-apr based on the total emmissions to incentivize liquidity and training. Additionally, a flywheel is created for liquidity incentives based on dYdX price, something that doesnt exist if the pool is fueled just with USDC from trading rewards.
- We have seen many “set reduction” conversations over the past year and in our opinion they only make sense in the following cases:
- Potential staked marketcap or future upside is simply too low to support a set of validators
- Set is insanely large with the longtail not contributing or not even being noteworthy stakeweight wise
- Coordination needs to increase for a pivot in direction or scaleability, reducing management costs of a larger set
I don’t think any of the above apply to dYdX atm. 60 validators isn’t all too cumbersome to manage and although some of the set is likely unprofitable, many of them stick around as the potential for increase in stakeweight is still there (bridge inflows + valuation increase). Although dYdX set is somewhat imbalanced, the longtail isn’t crazy enough to warrant a cut, >15% of voting power would still vanish over night. There might be a scaleability argument here but i haven’t heard from a desire of faster blocks, nor do i think reducing the current p2p connections would be the problem here - some testing could be done to figure out a faster benchmark all validators can run if need be. Some of the cost problems for operating dYdX also come from the fact that its highly encouraged to operate out of Japan, a costly place for machines and bandwith - if truly cost is a problem here then changing that, too should be on the table.
- fueling a treasury subDao with rewards seems good, overtime all expenses should be covered by trading rewards so starting something here is key. However, if the subdao gets an allocation of revenue, then it might make sense to not also provide them with a direct dYdX allocation to stake as well, this comes back to the above simplicity point. Such a dual mandate significantly complicates how people view the tokenomics and holder directed fees, a key metric for DeFi coins.
- I agree with @Kam that these should be separate proposals
- as for the bridge, i think this is an aggregious idea that takes nothing from the past mistakes of other ecosystems. closing the bridge will burn a significant non-attentive part of the holder base which will come back to bite dYdX 10x harder in the coming years. I propose everyone to read on the Story of Enigma → Secret, ask their community members and learn about how closing that migration has been a thorn in the side of growth and adoption for years after it happened. I think closing this bridge would be a horrible mistake, it is an infrastructure burden i believe dYdX will have to burden into perpetuity - a form of technical debt. Instead of closing the bridge, efforts should be made to delist ethdYdX trading and other token support, this should keep people bridging slowly but steady.
I hope this is some help to the proposers and community, looking forward to a final proposal.
Best,
Ertemann
Lavender.Five Nodes