I would like to address an issue that may arise with the rewards from @chaoslabs following Season 3. As they have not yet provided a distribution of rewards, it is possible that feedback from this topic could assist them in making a decision that better aligns with traders’ interests.
Problem: The program has a planned reward pool in USD, but distributes them in dydx tokens. In previous periods, a 7-day TWAP price of the last 7 days of the season was used. If we were to use this formula now, there would be a substantial discrepancy, unfavorable to traders. The TWAP price is approximately $3.03, while the actual token price at the time of writing this post is $2.12; therefore, traders will receive ~30% less in rewards. I believe this is unacceptable. So many new traders onboarded this season I think they should have butter smooth experience, especially considering that the dYdX chain experienced a 9-hour outage.
Ideally, one should strive to ensure that the token price used in distribution roughly corresponds to the token price at the conclusion of voting.
I think it would be possible to always use a 5-day TWAP with the last date being the day before the proposal’s publication date on the forum.
I endorse. It would be fair to set the TWAP price for 5 days, with the start of calculation on the day the competition ends.
Potential replace even TWAP price up to 3 days.
7 days is excessive for the modern crypto market.
the problem is not a 7day itself but that in normal situation we see a distribution proposal 7+days after season end + 2 days discussion period + 4days of voting. In two weeks price can change significantly both ways. Since I believe Chaos labs initially calculate all rewards in usd to put a reasonable up to date price of token is a matter of one click
Completely agree with our friend here, chaos labs should consider lowering the TWAP period to a more reasonable price range. hope the community actually pulls this off.
Thank you for initiating this discussion, @RealVovochka. In light of the feedback received on the previous distribution proposal and the discussions that have taken place here, we are supportive tof incorporating the community input.
Moving forward, we propose pricing the DYDX as suggested above, based on a 5-day TWAP calculated from the day before the distribution proposal was published.
The problem with an actual price is that it becomes subjective to manupulation.
If this is scripted to be always on a set time and date, then it becomes interesting to dump the prices shortly before the script runs and restore the price shortly after.
The end result is that the manipulator gets a higher $-value in rewards than intended.
To have the same situation on a 3 or 5-day period means that the price must be manipulated for a prolonged period, which is way harder to achieve. So it is good to have an average over a longer time span.
We do not support this modification. Price is a variable and TWAP (Time Weighted Average Price) is one of many ways to address its volatility in order to have a more “value” related anchor. We would eventually accept a potential switch to a VWAP (Volume Weighted Average Price) model, but in no way we would accept reducing the period of the average method used. To be fair, 7 days is actually quite short already we would even recommend to extend this duration to 14d or 30d.
I think 30d makes the most sense as well, traders should receive the average price for the duration of the season. The season is always more than thirty days, so 30d makes the most sense here
