Loyal Votes & Loyal Rewards

[Crypto_Chemist]

Pangolin: Loyalty Equation I

Foreword:

We are in a new era of decentralised governance and equitable distribution of governance tokens. With this new era evolving, we need innovation to overcome the challenges. Equitable distribution and voting rights can be something of a challenge, but is something we can overcome with the right equations. Let’s suggest a simple equation, which could help address some issues, in order to promote by reward Pangolins most loyal supporters. In code we trust!

Aim:

1. To help prevent entities from abusing voting power, by methods such as buying PNG only to direct a single voting decision, for personal gain, or without the long-term community goals in mind.

2. To increase the share of rewards to those who are invested in the Pangolin eco-system over longer periods, as bullish or as bearish the times may be.

Specific Objectives:

• Get more PNG to those who are loyal to Pangolin.
• Increase the voting weight to that of longer-term PNG investors.
• Reward long term PNG and PGL holding over short-term pump and dumps.
• Don’t punish people who remove or move their liquidity for a short period (Use Average).

Mechanism:

For voting rights: Take the wallets current PNG balance and multiply it by the wallets average PNG balance over a certain period, so that voting rights of current holders is amplified by consistently being invested in PNG. It makes sense to take the square root of this value, as we have multiplied two values together, in order to get a figure that is easier to interpret in relation to circulating supply:

Votes = Sqrt(current PNG wallet holdings * 30 day average wallet PNG holdings)

Simplified as: Votes = Sqrt(PNG*PNG30AVG)

For liquidity rewards: Take the wallets current PNG balance and multiply it by the wallets average PNG balance over a certain period, so that your share of rewards from the pool is increased, if you are a regular contributor to liquidity.

Your share of rewards from the liquidity pool =

Sqrt(current PGL wallet holdings * 30 day average wallet PGL holdings)

Simplified as: % Rewards = Sqrt(PGL*PGL30AVG)

NB1. Quadratic voting or similar could be implemented on top of this, this is not a single, or an alternative solution to equitably distributed voting; but one that can be used in addition to any other.

NB2. The same amount of rewards is distributed, but a proportionally higher share, is obtained by those who consistently provide liquidity.

NB3. 30 days is an example, this could initially be a 7 day average, or could be extended to their 12 month average after Pangolins 1st Birthday!

Example:

1. Voting

If you hold 10 PNG consistently for a month, your votes would be:

Sqrt(10*10)= 10

If you hold 10 PNG for half a month, your votes would be:

Sqrt(10*5)= 7

If you acquire 10PNG and you didn’t hold before, your votes would be:

Sqrt(10*0)= 0

2. Rewards

If you hold 1% of PGL rewards pool, consistently for a month; your share of the reward would be:

Sqrt(1*1)= 1%

If you hold 1% of PGL rewards pool, for half a month; your share of the reward would be:

Sqrt(1*0.5)= 0.7%

If you acquire 1% of the PGL reward pool, and you didn’t hold PGL before; your share of the reward would be:

Sqrt(1*0)= 0%

Results:

Long term commitment to the community increases your voting rights and your rewards.

[ZoRoMX]

Yeah definetly there should be someway that if whales start to look PNG they dont control PNG gobernance just by buying a tons of tokens, it is important the ones are here from the begining and are loyal to this project keep an important role in the gobernance/votes.

Not sure if this is the right formula, since I am not that good in maths haha, but your idea definitely is good.

[Hasim]

great idea. I agree with you. Long term Loyalty needs to be rewarded in such ways.

[orutag]

I totally agree on these objectives. One concern I have is using the average. That might give malicious whales unwanted weight.

The average mentioned above seems like the mean average. Simply the sum is divided by the total number of days. This might be open to manipulations.

Let’s assume a malicious whale who had a large amount PNGs in the beginning of the period for a day and then dumped all and then before voting added another large amount. This would effect the mean average more than desired.

What I mean is:

A whale has 1,000,000 PNGs in the beginning for a day. It dumps all. The last day it buys again 1,000,000 PNGs.

If we use 7 day mean average, it is 2,000,000 ÷ 7 = 285.714,29.

This is a pretty huge amount for holding PNGs for only two days.

You have made an excellent point with using average as a fair calculation for those who consistently provide liquidity. I have integrated it into my proposal by adding FIFO into the calculations. I would be glad if you could take a look and share your ideas.

Thank you very much for investing time to make Pangolin better. Together we will make it happen. For sure.

Dynamic Time-Weighted Quadratic Voting

I have shared my views on voting a while ago. After getting positive responses and suggestions I am turning it into a proposal. A similar one trying to address the same issues is suggested by Crypto_Chemist, which includes rewarding as well. I believe we will soon have a satisfactory voting mechanism that will bring us closer to be the best dex on the market. I have copied the original post for newcomers and added FIFO at the end. We are all disturbed by the behaviour of some huge PNG holders…

[Crypto_Chemist]

Thank for the contructive feedback and taking the time to contribute too
You are right, I used the mean, and it doesn’t do anything to protect against whales.
This formula can be used in combination with others to help address other issues.
It is just a way of promoting loyal holders.

I have another idea that I will post regarding whales, not getting rid of them, but changing the system so that we channel whales to be more constructive for the Pangolin community as a whole.

[Friedrengi]

I am fully in support of this.

[Dante]

This is good. @orutag’s point of a whale that has 1,000,000 PNG for just 1 or 2 days of a period is well taken. Here are some comparisons using your voting/rewards function with different average holding periods used for a whale that buys 1,000,000 PNG just before a vote:

7 day average holding: Sqrt(1,000,000 * 1,000,000/7) = 377,964 votes
30 day average holding: Sqrt(1,000,000 * 1,000,000/30) = 182,574 votes
180 day average holding: Sqrt(1,000,000 * 1,000,000/180) = 74,536 votes
1 year average holding: Sqrt(1,000,000 * 1,000,000/365) = 52,342 votes
2 year average holding: Sqrt(1,000,000 * 1,000,000/730) = 37,011 votes

Comparing to an account that holds 1,000 PNG for 365 days:

1 year average holding: Sqrt(1000 * 365,000/365) = 1,000 votes

So the malicious whale has 1000x the PNG, but only 52x the voting power. That seems pretty decent.

For these reasons, I think using the 365 day average holding period achieves good protection. The lower holding period calculations still give too much voting power to a malicious whale. Also, It’s a stronger incentive for everyone to hodl.

Also, I don’t think we need to ramp into the 365 day average holding period for the vote calculation. We could start using it from the get go even though Pangolin has only been live for about 2 months, since all accounts are affected in exactly the same way. It preserves the relative voting power across all accounts, even if the absolute maximum voting power is not achieved until after 365 days.

However, for rewards, I’m thinking we will need to use something like MIN(365, # days since Pangolin live) for the average holding period used in calculations, in order to get the full rewards.

Anyway, I like this proposal.

[orutag]

1 year average holding is a good balance. I agree.

[Pablo]

Good ideas here - there has been a lot of discussion regarding quadratic voting already (which I remember you were a part of) and I’d love to see that incorporated into the idea of rewarding long-term LPs and also creating better equity between whales and smaller LP providers.

I noticed that the current governance is now set at 1PNG-1VOTE. I don’t support that for a platform that requires community engagement. Giving people meaningful voting rights is a better approach.

The alternative will be disengagement by the community and 1 or 2 big voting blocks taking over every proposal. You can already see this happening on other AMMs. They have very low voter turn-out.