BIP-22: Third Period

choobie

Summary

With themes having just launched for the third period, it is time the DAO decides and confirms the upcoming format of the third period. This proposal is predominantly based on the existing format of the Second Period, documented under BIP-14.

Here is a bullet-point summary of the proposed format:

0.1 The Art:

Art Engine:

Continues to use Stable Diffusion version 1.5 and VQGAN + CLIP
SD competes vs VQGAN + CLIP, with the pool balanced according to SD’s % dominance from last period (currently 69.53% SD, 30.47% VQGAN+CLIP)
Botto creates artworks of varying aspect ratios (artwork format)
Voting pool rebalances based on voters’ model preference
Voting pool artworks rebalance based on voters’ preference on artwork format
An art engine model is discontinued if less than 10% VP is spent on the model artworks in any given round
350 Artworks each round are culled by least-earned VP
Uses one theme curated by the DAO: 'Paradox - A collision of opposites, a beautiful chaos and a fearless exploration of the unknown'

Period Format:

12 Week Period
1050 Artworks in Voting Pool
Manifold contracts used
Artworks auctioned on SuperRare
Rounds follow the same weekly format as seen in Genesis and Fragmentation periods.
There will be no extended first round as in the 1st and 2nd periods. The first round will be a typical 1 week in length

Period Key Dates:

February 21st 22:00CET / 16:00ET / 13:00PT: 3rd Period Starts
February 28th 22:00CET / 16:00ET / 13:00PT: First round ends
March 1st 22:00CEST / 16:00ET / 13:00PT: 1st Mint & Auction
May 17th 22:00CEST / 16:00ET / 13:00PT: 12th Mint (last artwork of 3rd Period)

0.2 Economy:

Voters can earn through:

Spending VP every week (Active Rewards Contract)**
Emissions (Governance & Liquidity Mining Contract)
Retroactive Rewards (Determined by the DAO after the period finishes)**

* Requires an Access Pass or staked $BOTTO in the governance contract.
** Requires a minimum of 2,000 $BOTTO staked in the governance contract.

Protocol ETH revenue is distributed each round:

25% to Active Rewards Contract
25% reserved for Retroactive Rewards
50% to DAO treasury, with equivalent of ~~20%~~ 50% of revenue in $BOTTO burned

Subsidized Active Rewards
25% of revenue generated from the four sold Genesis Period artworks (not including the 4x OTC to Moderats) (37.94485ETH) are equally distributed across each round of Botto’s Third Period through the Active Rewards contract. This amounts to 9.486ETH distributed across 12 rounds, alternatively understood as a subsidized boost of 0.790517ETH per round.

Subsidized Retroactive Rewards
Similarly, 25% of revenue generated from the four sold Genesis Period artworks (37.94485ETH) are equally distributed across each round of Botto’s Third Period through the Retroactive Rewards. This amounts to 9.486ETH starting in the retroactive rewards pool at the beginning of the period.

Incentivized Onboarding is discontinued

The DAO has discontinued onboarding rewards. An alternative should be discussed by the DAO after this BIP on what types of rewards new entrants may receive.
The DAO should discuss how to reallocate the 800,000 $BOTTO that was returned to the treasury from incentivized onboarding.

Intermediary Period Rewards
Voters that spend VP between periods 2 and 3 on alternative voting pools receive 25% of revenue received during that time as active rewards

Voting Points:

No significant changes to VP earning as the team continues to determine how to implement veBOTTO.

The DAO may elect to change parameters of the economy throughout the period if it finds more optimal methods.

1. Rationale

Botto has completed its 2nd period, Fragmentation, which incorporated both art engine and economy evolutions. Botto’s Third Period looks to continue this evolution, being Botto’s first ever full period dictated by an overarching theme. This theme is currently being curated in a voting pool available on Botto’s app. Most major changes to the economy were opted against, with the primary revision being an omission of onboarding bounties paid out in $BOTTO. The team believes this version can go forward to ensure smooth continuation, while most of the major changes put forward (e.g. burn mechanic and liquidity management) require their own isolated discussion and decision making. As with all governance decisions, proposals from the community are welcomed!

2. Economy Proposal Specification

50% of all protocol revenue within any given round is directly redistributed to Botto participants:

25% to those who spent VP in a round (relative to others), in ETH
25% to a pool for retroactive rewards, in ETH or $BOTTO

This third period proposal also documents how rewards are handled in the intermediary period in section 2.5.

The remaining 50% of revenue is held in the treasury, with $BOTTO equal to ~~20%~~ 50% of revenue burned from the treasury as outlined in BIP-06.

Onboarding rewards that distribute 1000 $BOTTO upon completion have been removed from this Period’s economy due to the sybil that happened in mid-January.

2.1 Active Rewards Contract

25% of protocol revenue in any given round will continue to be distributed in ETH. This includes any revenue generated from derivatives, secondary sales, and any other revenue stream Botto as a protocol has. Distribution is based on how many Voting Points (VP) are spent by a user, relative to other voters in that voting round. ETH is deposited from the treasury into the Active Rewards contract after the round ends.

To qualify for rewards from this contract, a user must have at least 2,000 $BOTTO staked in the Governance contract before the end of the round and when they claim.

The DAO treasury held onto auction proceeds received from treasury-owned Genesis Period artworks after four artworks were OTC’d to Moderats early in January. In light of this, 25% of revenue generated from Genesis Period artworks (37.94485ETH) are equally distributed across each round of Botto’s Third Period through the Active Rewards contract. This amounts to 9.486ETH distributed across 12 rounds, alternatively understood as a subsidized boost of 0.790517ETH per round.

2.2 Retroactive Rewards

The DAO is currently in the process of deciding how to distribute its retroactive rewards pool to project participants in Botto’s Fragmentation period. A snapshot deciding on distribution is to be set up in the coming week.

For Botto’s Third Period, no significant changes are proposed to Botto’s retroactive rewards. It is suggested that the DAO complete going through the retroactive rewards process of the Second Period prior to deciding upon any changes that affect future periods. A parallel BIP is currently available for perusal. This means that 25% of protocol revenue generated in the third period would be reserved for retroactive distribution. This includes any revenue generated from derivatives, secondary sales, and any other revenue stream Botto as a protocol has.

The DAO treasury held onto auction proceeds received from treasury-owned Genesis Period artworks that occurred after the initial OTC deal with Moderats early in January: the four auctions that took place at the end of the second period. 25% of these auction proceeds are reserved as an initial subsidy to retroactive rewards distribution (9.486ETH).

To qualify for Third Period retroactive rewards, a user must have at least 2,000 $BOTTO staked by the end of the final voting round of the period.

2.3 Incentivized Onboarding Contract

This contract was set up by the DAO to facilitate ‘immersive airdrops’. Currently, onboarding rewards are discontinued for the third period. The team recalled the remaining 800,000 $BOTTO from this contract in January during the sybil. This contract is discontinued.

The DAO are seeking alternatives to continue rewarding new project participants - the bounties section will be reenabled, but rewards will not be specified for the time being. $BOTTO will not be distributed for completing any bounty from this point forward.

2.4 Treasury $BOTTO Burned

Following BIP-06, the DAO will continue to burn an equivalent of $BOTTO from the treasury equal to 20% of round revenue.

2.5 Intermediary Period

There is a gap between periods with Botto generating protocol revenue through ongoing sales from its DAO derivative collection, “Ceci n’est pas un Botto”. Pipes were an initiative to raise revenue for the treasury, at a time where the DAO was actively using its auction proceeds to burn $BOTTO.

25% of generated revenue is to be distributed to voters in any voting pool between the periods from 31-01-2023 2100 UTC until 21-02-2023 21:00UTC. This follows the standard active rewards distribution process, with active rewards being distributed prior to or on 24-02-2023.

Due to the length and nature of this intermediary period, no retroactive rewards will be distributed in this period. Instead, the team believes that it is prudent that 75% of protocol revenue in this intermediary period will be allocated for future protocol development endeavors (treasury hires, smart contract development, auditing [veBOTTO], etc). Any transactions taking place outside of the specified timeframe specific to the Pipes derivative collection would be treated standardly as active and retroactive rewards (as was done in the Second Period).

An equivalent of 20% of total generated revenue will be burned from treasury for this intermediary period.

3. Art Engine Proposal Specifications

Botto’s art engine will be adapted to include a theme selected by the DAO as specified in Botto’s 2nd Period BIP-14. The selected theme will be added to each of the prompts Botto creates. The taste model will also rank how well a fragment matches the theme see here for Quasimondo’s short explanation.

Ss decided by BIP-20 the theme will be 'Paradox - A collision of opposites, a beautiful chaos and a fearless exploration of the unknown'.

The pool will continue to rebalance according to received votes for either of its art engine models, thus continuing the self-competing nature of the art engine.

3.1 Stable Diffusion and VQGAN + CLIP Competing in the Art Engine

Other than adding themes, the prompt generator will continue to run as usual, and the same prompts will be run through both core image gen models VQGAN + CLIP and Stable Diffusion.

Currently, Stable Diffusion dominates the voting pool, accounting for 69.53% of all outputs each week. VQGAN + CLIP accounts for 30.47% of the voting pool fragments. These numbers are to be inherited in the first week of Botto’s Third Period. The taste model will continue to filter down to 350 weekly fragments based on the training it has developed.

If a model’s ratio in the taste model’s selection drops below 10% in a round and does not go back above 10% in voting, it will be discontinued. The community can decide to re-add the model if it wishes, as well as reconsider the automatic threshold in future periods.

3.2 The Voting Pool

The third period voting pool will be populated with 1050 fresh fragments in the new output format.

3.3 Round Format

Round formats will stay the same:

New voting rounds begin every Tuesday, 21:00 UTC / 16:00 EDT / 13:00 PDT
Leaderboard boosting opens up for final 24hrs every Monday, 21:00 UTC / 16:00 EDT / 13:00 PDT
Voting rounds end every Tuesday, 21:00 UTC / 16:00 EDT / 13:00 PDT
New art fragments are added to the voting pool every Tuesday, 21:00 UTC / 16:00 EDT / 13:00 PDT
Auctions are scheduled on SuperRare to begin every Wednesday, 21:00 UTC / 16:00 EDT / 13:00 PDT
Auctions are scheduled to end every Friday, 21:00 UTC / 16:00 EDT / 13:00 PDT

3.4 Raw scoring:

Raw score will continue to be recorded for each artwork but is not used to determine whether a fragment is culled or remains in the voting pool.

3.5 Artwork Format and Output Aspect Ratio

The final title, description, metadata, and URL to the bitmap on IPFS are all on-chain.

Botto will freely choose between varying aspect ratio artworks as seen in the Fragmentation Period, and will adjust its selection of format based on voting.

3.6 Artwork Titles

The way in which Botto titles its artworks will not change in the Third Period.

They will be produced for each fragment selected by the taste model by asking GPT-3 to generate a title from the key features of each fragment.

3.7 Manifold Contract

The third period will use a contract set up through Manifold.xyz.

3.8 Budget

Software and hardware costs of running both engines will be approximately $6,000 per month

3.9 Disadvantages

Stable Diffusion is without filters and can produce explicit content. Despite expected sporadic use, the team are exploring a manual report feature for Botto’s art engine.

4.0 Key Dates

The third period will last 12 weeks (3 months):

February 21st 22:00CET / 16:00ET / 13:00PT: 3rd Period Starts
February 28th 22:00CEST / 16:00ET / 13:00PT: First round ends
March 1st 22:00CEST / 16:00ET / 13:00PT: 1st Mint & Auction
May 17th 22:00CEST / 16:00ET / 13:00PT: 12th Mint (last artwork of 3rd Period)

4.1 Criteria of Success

Continued growth in engagement (project entrants)
Continued addition to Botto’s protocol narrative (earnings, rewarding Botto stewards)
Successful artworks minted by Botto
Continued growth in token price

justinn

choobie 3.8 Budget
Software and hardware costs of running both engines will be approximately $6,000 per month

just curious, who is currently paying for this and what is the process?

Ben

Looking good. A couple changes I'd propose:

Distribute active rewards solely, no retroactive. Would simplify things and make it easier to model out BOTTO token value. Already a lot of complexity with Botto, so all else equal, I like simplifying things.
100% burn rather than 20%. The 20% seems arbitrary, not sure why we don't just burn the equivalent of 100% if we feel that a burn is constructive to begin with.
may have missed this but should probably specify how proceeds from any secondary sales that may occur prior to the third period (or during the period) are to be distributed.

I'm unclear on which revenue from Genesis Period treasury sales is being distributed in the third period? Is it from the Mods sales (I thought those were already distributed?) and/or from the four other sales?

Lastly, in regards to onboarding rewards - I think that immersive airdrops can be super effective but only if they are hyper-targeted and guarded against sybil. So for example, targeting recent SuperRare collectors who didn't receive OG airdrop. Probably something to look into a bit down the road.

FireHat

Ben I like simplyfing things for sure. Would you still burn treasury BOTTO or find a solution to sandwiching/front-running and market buy?

choobie

Ben Distribute active rewards solely, no retroactive. Would simplify things and make it easier to model out BOTTO token value. Already a lot of complexity with Botto, so all else equal, I like simplifying things.

I lean towards this too, but please see my other point below. I'm a big advocate of simplifying what we have: I dislike the extra level of effort required to flesh out retroactive rewards - but at the same time, this is the first time we've ever been through this process so I'm not sure whether outright discarding it is the best thing.

justinn i agree with ben about dropping retroactive rewards - there is a lot of contention around how they should be awarded. rolling those into active rewards feels like it will increase weekly excitement around auctions, and will provide more instant gratification to those who are actively participating.

Devil's advocate on two points: Would it provide more instant gratification and at what cost? From some discussion on Discord, 'smaller' players like the idea of retroactive rewards and may feel disincentivized to vote if they feel there's no reward and/or less reward.

Second, the contentiousness of retroactive rewards was always meant to be a discussion. The weighted vote for retroactive rewards allows people to distribute their vote across categories that include topping up the active rewards in Period 2, performing a burn, or sending to treasury. So this deals with that contention in a democratic way and gives us information of where opinions actually lie that we can then incorporate into a future proposal on the economy.

FireHat In addition to eliminating retroactive rewards, I would strongly encourage using some funds to boost Protocol Owned Liquidity

Totally agree, but IMO that's a separate discussion for outside of this BIP. We can follow up with another BIP where we religiously allocate a % of auction proceeds to reinforcing PoL.

Taking one look at the leaderboard each week displays behavior that might not necessarily have proper alignment with Botto(!) i.e. those with greater vote power generally spend far less time curating. The big question we have to ask is - to what degree are we sacrificing training and curating the best artworks each week for Botto just for the sake of 'simplicity'. Maybe I've missed it, but I have not come across a good counterargument to this pop up on Discord.

One counterargument I could make is that those spending more but curating less artworks may just be showing conviction in what's on the leaderboard and they're not just vote dumping (in which case, there actually is alignment). Even then, we've got to ask ourselves how these artworks get onto the leaderboard to begin with.

Should we shift only to active rewards, we should do so not under the pretense that it's simplifying the economy for new participants(advantageous but not core reasoning IMO), rather we should do so because voting behavior is aligned with desired actions that benefit Botto the artist - i.e. people are still voting to curate the best artwork, rather than just earn their reward. This is a large assumption to make.

Also, yes, those with greater vested interest (staked tokens) should likely receive a larger portion of rewards. I think that line of argumentation is merited. But those putting in labor should either 1) earn fairly as well for doing the hard work to some degree and/or 2) at least be exposed to a mechanism that lets them build up their own stake in Botto.

If we do feel retroactive rewards are still important for encouraging curation earlier in the week / getting us through the 1050 fragments to result in a good leaderboard, perhaps retroactive rewards should not reward ETH, rather they should reward $BOTTO proportionate to a person's stake. Perhaps there's a different implementation we could consider which can be retroactively added during the period to fairly reward those who train Botto well, while simultaneously getting rid of the current iteration of retroactive rewards.

And say we got rid of retroactive rewards - what % would we like to see active rewards being distributed? Would think that at least some of that 25% should go to initiatives to encourage robust voting behavior, developing Botto, or growing the protocol overall. If the DAO is adamant on removing retroactive rewards for this period, we should seek clarification re. numbers.

Ben 100% burn rather than 20%. The 20% seems arbitrary, not sure why we don't just burn the equivalent of 100% if we feel that a burn is constructive to begin with.

20% was a conservative way to maintain the burn narrative. We'd be burning a lot of treasury funds in the future if we commit to 100% while simultaneously distributing half of its equivalent in ETH: between the lines this means the treasury is net negative after every auction. If we want a number that might make more sense, we could always increase the burn to 50%, which is the equivalent of what is currently distributed to voters (25% active 25% retroactive). Bear in mind that in Fragmentation, we burned over 470,000 $BOTTO. Ceteris paribus, at 100% burn rate we'd end up with 0 $BOTTO in treasury after 2 years, or 8 periods.

It might also be worth considering raising treasury funds through OTC deals in the future. We're ETH poor and have real costs to cover. I don't contest that the treasury has too much $BOTTO currently - but we don't have enough ETH in the treasury to provide sizable runway into future DAO ops for more than a few years (probably less). I've no doubt the ETH in the treasury will continue to grow - but we should probably pace ourselves accordingly.

Ben I'm unclear on which revenue from Genesis Period treasury sales is being distributed in the third period? Is it from the Mods sales (I thought those were already distributed?) and/or from the four other sales?

The other four - Happy to adjust phrasing to clarify maybe I've phrased it awkwardly

Ben may have missed this but should probably specify how proceeds from any secondary sales that may occur prior to the third period (or during the period) are to be distributed.

Good point. For the intermediary period, 25% of any revenue would be distributed as active rewards. I should clarify that in this BIP. For the third period, any revenue would be distributed according to active rewards and retroactive rewards (25/25). The intermediary period wasn't planned to have a burn, but that's something we can bake in easily if the DAO chooses.

Ben Lastly, in regards to onboarding rewards - I think that immersive airdrops can be super effective but only if they are hyper-targeted and guarded against sybil. So for example, targeting recent SuperRare collectors who didn't receive OG airdrop. Probably something to look into a bit down the road.

Agree with this to a large extent. I like the idea of immersive airdrops and I don't think access passes are the same thing at the end of the day (no access to economy rewards through AP, just voting exposure). Perhaps they could work in tandem with one another, say by creating a special pass with onboarding rewards linked to it and being hyper targeted about who we give it to. That requires less build time and makes use of existing mechanisms we have in Botto.

If you made it this far in my braindump, I'd like to clarify that:

I don't think retroactive rewards are ultimately the way to go - and I still believe users will curate irrespective of whether retroactive rewards are there or not. I think there might be an under/overlooked mechanism to reward the biggest trainers some more $BOTTO to reward as fairly as possible. Is the timing right to remove retroactive rewards outright? I'm not so sure.
The burn set at 20% is conservative but with some basic reasoning (don't burn too much but retain narrative). TL;DR the $BOTTO will be useful in the future and gives us more flexibility, but burning only 20-50% is not being non-committal. I think this should be its own debate, much like how we changed the BB&B mechanism mid Genesis.
We can change economy numbers also during the third period if we have a clear proposal pop up. I advise the DAO not to see proposed numbers or economy format as blockers to just getting on with the third period.

justinn

i agree with ben about dropping retroactive rewards - there is a lot of contention around how they should be awarded. rolling those into active rewards feels like it will increase weekly excitement around auctions, and will provide more instant gratification to those who are actively participating.

Ben

FireHat Would still burn BOTTO from treasury. not so much to avoid front-running (that's just a nice bonus) but to accrue ETH to the treasury.

FireHat

In addition to eliminating retroactive rewards, I would strongly encourage using some funds to boost Protocol Owned Liquidity to both earn some yield and guarantee the long term stability/liquidity of BOTTO.

FireHat

Ben Def would keep accruing ETH. Was thinking more along the lines of discontinuing retroactive rewards and using those funds for BB&B

Ben

FireHat Got it. I think those funds are still more constructive in the treasury. e.g. directing them toward POL can effectively achieve the same thing (lowering BOTTO circulating supply) while preserving funds for future use

Ben

juanje I specially love the idea of rewarding voting behavior with $botto rather than with Eth, if that makes sense & simplifies things.

I think real yield as in ETH from organic revenue rather than native token inflation is a powerful narrative and incentive. Few crypto protocols offer this. And unless a time lock is added, I think further BOTTO inflation should be avoided.

choobie Taking one look at the leaderboard each week displays behavior that might not necessarily have proper alignment with Botto(!) i.e. those with greater vote power generally spend far less time curating.

I think the low-hanging fruit for improving voting engagement and mint quality and increasing (constructive!) voting activity among large holders is at the UI rather than incentive level. Offering a UI that lets voters surface promising fragments more efficiently, even if the side-by-side UI is still used in some cases. Shared some ideas on this on Discord.

As long as ETH is distributed based on VP, I like the simplicity of just active rewards cause it’s easier for newcomers to understand (Botto is already complex), makes it easier to model out BOTTO token value, and less overhead for team (team can decide importance of this one).

But I feel less strongly on this after reading the above views, and you make a good point about misincentives @choobie. I think that as long as we distribute ETH based on VP expenditure, there’s a misincentive to vote even if you don’t have any genuine views on the art or feel that you have good “taste” that will help train Botto and surface the most promising fragments. At worst, to just max vote on the first fragment that pops up in order to collect ETH.

So I think for future Periods, yield should be distributed to stakers (with time lock!). That way, only token holders who feel that they can truly help Botto will vote. Voting delegation could be an alternative path to solve this. I know this is beyond the scope of Period 3 but may inform the direction we take here.

Bear in mind that in Fragmentation, we burned over 470,000 $BOTTO.

Does that include the works sold from Genesis period? With the recent price increase in BOTTO it would take significantly higher sales to burn the same level as Fragmentation. I think a good option and more in accordance with BIP-06 would be 50% burn with a specified max limit per burn e.g., 100k BOTTO.

In terms of conserving BOTTO for treasury, I think the ~ 10.5m reserved for LM subsidies is a good place to look as well, which would also address inflation. But that's for a future BIP.

juanje

I often have comments but in this case I can´t but adhere to every single point that Choobie makes here. I specially agree with his last three key points.

I encourage everyone to take a look to the voting behavior of every single leaderboard (and that´s just the top 10): Botto needs the larger holders going through more fragments too (it has an impact, in one way or another). We also want smaller holders to feel their time is appreciated and rewarded fairly. There must be "something", otherwise, with all rewards only tied to vps, the incentive to dump-vote will be strong (from another point of view: the incentive to vote more and spend time with Botto will be much lower!), and will end up having an unknown negative impact.

I do think retroactive rewards are necessary and fair in this period: they were approved, announced, are expected, and we can still modulate them. It´s not surprising that it´s generating conflicting views, partially due to the fact that we have not agreed and communicated what good voting patterns are in advance. A good use of our time in the next weeks could be working and agreeing on this, and not on whoever is going to receive the last penny of Eth. If we could just agree on a way of scoring fairly what good voting is...the rest would be done...

I specially love the idea of rewarding voting behavior with $botto rather than with Eth, if that makes sense & simplifies things. One way to go (haven´t thought it thoroughly) could be giving $botto as a reward, but another could be offering $botto at a discount.

choobie

Ben I think real yield as in ETH from organic revenue rather than native token inflation is a powerful narrative and incentive. Few crypto protocols offer this. And unless a time lock is added, I think further BOTTO inflation should be avoided.

Yep, I generally agree with this too. Just wanted to float an idea by to show that there are a wealth of options for us to consider.

Ben I think the low-hanging fruit for improving voting engagement and mint quality and increasing (constructive!) voting activity among large holders is at the UI rather than incentive level. Offering a UI that lets voters surface promising fragments more efficiently, even if the side-by-side UI is still used in some cases. Shared some ideas on this on Discord.

I totally agree with this too. @merttol on Discord made a comment about voting UI a few days back. This is pencilled in on the roadmap, with the other half being the (lack of) UX of the gallery. A different conversation to have, but I definitely feel voting engagement improves as our UX does. We are going to pilot a standalone voting app with a different voting experience in less than 2 weeks at an event.

Ben As long as ETH is distributed based on VP, I like the simplicity of just active rewards cause it’s easier for newcomers to understand (Botto is already complex), makes it easier to model out BOTTO token value, and less overhead for team (team can decide importance of this one).

This is again, something I agree with. And you are right, ETH based on VP expenditure will always pose a risk of misincentives. Time staked is a well agreed upon variable from previous discussions, which is something we are going to bake into with veBOTTO. Timelocks will make rewards and our economy system way more straightforward IMHO.

Ben Does that include the works sold from Genesis period? With the recent price increase in BOTTO it would take significantly higher sales to burn the same level as Fragmentation. I think a good option and more in accordance with BIP-06 would be 50% burn with a specified max limit per burn e.g., 100k BOTTO.

Yes, the burn amount included any revenue that was distributed in the weeks of Fragmentation. This revenue included some of the Genesis works (the first four OTC'd, Moderats). I think increasing our burn rate to a 50% equivalent burn on earned revenue is measured. I am editing this into the current BIP.

Ben In terms of conserving BOTTO for treasury, I think the ~ 10.5m reserved for LM subsidies is a good place to look as well, which would also address inflation. But that's for a future BIP.

Again, aligned with you here.

FireHat

Catching up on the posts. I think we are mostly in agreement about simplifying the process and maybe possibly just staying with active rewards and scrapping retroactive for next period. I think UI improvements and other ideas can get us a better result wrt people engaging more often and with better quality votes. Longer term veBOTTO kicking in might do away with these issues.

How to encourage voting should always be at the forefront of decisions, but I think rewards should go to token holders that show long-term financial alignment with BOTTO and not who votes and how much. veBOTTO might be a great starting point

I would propose then using the amount for retroactive rewards to be allocated fully towards POL for next period (pending a new BIP that also makes an initial larger addition).

A more debated issue is with the burn. After the discord discussions with @strassa over the last week I'm now of the idea that burns should come from buybacks and not from treasury. The main attraction I see for BB&B is that it is a way to increase ownership % without doing anything. This is not achieved with burning from treasury as all token holders experience no change. Yes, there is fewer $botto around and price increases, but that is completely offset because it is the token holders own treasury $botto that is being burnt. I would keep current treasury burn over nothing, but I would rather buy from the person that values $botto the least.

The issue then is solving the sandwiching/front-running. I believe that with a stronger POL this can be mitigated via less slippage and the fact higher fees earned from LPing eat at the lower sandwich gains.

Ben

FireHat The main attraction I see for BB&B is that it is a way to increase ownership % without doing anything. This is not achieved with burning from treasury as all token holders experience no change. Yes, there is fewer $botto around and price increases, but that is completely offset because it is the token holders own treasury $botto that is being burnt.

True, but token holders also own treasury ETH and with BB&B they are spending some of this ETH. So that's the tradeoff. At this early stage in Botto's evolution, I like the idea of accruing ETH (and other liquid assets) to the treasury and investing it toward growth.