0. Summary
In this V2 of BIP-51, following DAO feedback, the proposed changes to LP Staking VP generation and the introduction of baseline VP have been removed from the discussion.
TL;DR: BIP-51 proposes that:
- All Voting Points (VP) are allocated once per round.
- All Voting Points (VP) reset at the end of a round.
- Any staked amount after the round begins generates a prorated amount of VP for the week.
- Pipes and other VP generating collectibles do not generate VP mid-round.
- Unstaking before the round ends disqualifies the user from any undistributed rewards, removes their votes of that given round, and removes remaining VP of that given round. They will still be able to claim rewards that were previously credited to their wallet but have not yet been claimed.
- VP begins resetting at the beginning of the following period (meaning a Grace Period until end of Temporal Echoes, on June 11th 2024 at 22:00 CET).
This change reduces development and user complexity of the VP system, boosts weekly active participation and aligns directly with Botto's training needs. No changes are proposed with regards to minimum 2000 BOTTO staked to be eligible for ETH rewards.
1. Rationale
1.1. VP Reset
While the DAO’s long-standing Voting Point system is fairly robust, it carries ramifications in its current form: dormant stakers accrue significant voting power over time to be spent upon return. While this is inherent in design and within any staker’s right(!) - the DAO should better align incentives of stakers to participate on a weekly basis and drive more consistent feedback to the machine.
Metrics shared in this spreadsheet reveal an average of 53 daily active users (DAUs) and 247 round active users (RAUs) since the Paradox period, with a significant deviation suggesting wide daily and round dispersion. Our main returning user base remains consistent, hinting at solid weekly retention. So, the sporadic green bars in the data suggest that few users return after a break, indicating a potential area for improvement with the VP reset. Introducing weekly VP resets aims to foster regular participation, aligning user activity with Botto’s weekly cadence and enhancing training and output.
During the Fragmentation period, engagement spiked, with round 61 reaching 575 voters and round 62 peaking at 754 voters, likely due to specific events or market influences. The Paradox period also shows fluctuations, with an initial high of 420 voters in round 64, stabilizing around 177-198 voters in later rounds. This pattern indicates peaked interest when a new Period starts, which is expected.
These fluctuations, while part of the natural cycle, highlight irregular participation where dormant accounts with accumulated VP, as well as intentional VP savers, occasionally distort more regular voting dynamics. Implementing a weekly VP reset encourages consistent participation, ensuring more stable and equitable engagement.
Currently, VP generates linearly every second according to your $BOTTO stake. This translates to 1VP generated per $BOTTO staked each round. If you’ve staked LP shares into the Liquidity Mining contract, your VP generates per LP share, where 1 LP share is 150VP per LP share per week. VP calculations are done once per second, with 15 second intervals checking for your staked quantity. This is problematic as it places a significant load on Botto’s systems. We should move away from this.
These changes are anticipated to align participation more closely with Botto and the DAO’s weekly round cadence, encouraging users to train Botto at least once per week. This also encourages a fairer, more predictable distribution of protocol revenue as it discourages dormant accounts to return and vote dump, diluting regular participants.
1.2. Midround Generation, Unstaking Rewards Removal
This BIP further proposes that collectibles generating VP do not generate VP mid-round. Collectibles that are minted, such as new access passes, will have the totality of the VP credited to the user’s account as soon as the collectible is minted. Secondary sales of access passes and/or pipes will have their VP credited the following round. Plainly, this is to avoid scenarios where sybilling for VP could theoretically occur, and makes the system easier to design.
Unstaking before the round ends disqualifies the user from any undistributed rewards. Again, this is to ensure that no sybilling can occur for the sake of incentive. Votes (VP expenditure) within the round of the unstaking user are removed from the system, as well as any remaining VP. This ensures that users cannot sybil for financial gain.
1.3. Grace Period
A grace period lasting until the end of the Temporal Echoes Period is proposed, occurring on June 11th 2024 at 22:00 CET. This means that the actual reset of voting points per round will not take effect until the beginning of the following period. This grants users the ability to spend their VP across Temporal Echoes freely, while minimizing the ability for dormant accounts to come in and spam their VP.
Data shared in the spreadsheet shows that the proposed grace period effectively mitigates the risk of VP dumping by dormant accounts, which have accrued substantial VP over time. Several accounts hold significant available VP despite minimal engagement, with the top dormant account having 385,607,474 VP last active in April 2023. The proposed grace period reduces the likelihood of these accounts spamming active participants with sudden large-scale VP spending, ensuring a balanced transition.
Some DAO members have lobbied for a longer grace period - this is not encouraged as the weekly VP reset proposed is to ensure active voters are rewarded for consistently showing up week after week, spending their VP to train Botto on a weekly basis, which is what the art engine needs. Extending the VPs to have no expiration is not in the spirit of a VP reset, nor is a 1-year grace period (we see this as akin to delaying the inevitable).
To add, data within most periods on artworks and fragments has remained mostly consistent (from a storytelling perspective) due to minimal VP system changes and the inherent aligned incentives of the weekly rewards distribution model where sales have mostly occurred weekly. Isolating a grace period to the end of Temporal Echoes may result in more expansive VP spending in the near term, but it would not affect the next period.
The RAU and DAU data validate the need for a VP reset and underscore the importance of the grace period. Aligning voter engagement with Botto’s weekly cadence and providing a transition phase enhances the effectiveness and fairness of the voting process.
2. Proposal Specification
2.1. Weekly VP Allocation
VP is allocated once per round, at the beginning of the round.
2.2. Prorated VP Allocation
If a user acquires and stakes $BOTTO or LP shares, the amount of VP awarded in the round is prorated according to time left in the weekly round. Prorated sums are not allocated to collectibles that generate VP (Pipes and Access Passes) to prevent sybil.
2.3. Weekly VP Reset
VP is reset at the end of any given round.
2.4. Staking of $BOTTO
VP generation is directly proportional to the amount of $BOTTO staked. For every token a participant gets 1 VP for that round.
- Calculation: VP = $BOTTO staked
- Example: Staking 1,000 $BOTTO at the start of a voting round grants 1,000 VP for that weekly round. Additional staking within the round results in additional prorated VP allocation.
2.5. Staking of UNI-V2 LP ($BOTTO-ETH) Tokens
This proposal retains the existing UNI-V2 LP = VP methodology, where 1 UNI-V2 token (LP Share) staked = 150VP / round.
- Example: 1 UNI V2 = 150VP, 2 UNI-V2 = 300VP, etc.
2.6. Collectibles
Pipes, Access Passes, and other VP-generating collectibles generate their regular amounts at the beginning of each round. Access Passes acquired from new campaigns will have VP credited to the corresponding wallet from the moment they were minted. Pipes, collectibles, or Access Passes acquired on secondary only generate VP at the beginning of the following round, not mid-round.
2.7. Rewards
Rewards are calculated post-auction on Monday 16:00 CET. Unstaking before the round ends disqualifies the user from any undistributed rewards. They will still be able to claim rewards that were previously credited to their wallet but have not yet been claimed.
2.8. Unstake: Forfeiting VP Spent and Remaining VP
A user that unstakes during a round has all their votes removed from the round. All remaining VP of the user is also removed. This is an anti-sybil measure.
2.9. Implementation Time
The implementation of these steps is expected to take approximately 2-3 weeks, involving development, testing, and deployment phases, followed by community support and feedback gathering. This Voting Point system revamp will appear both in the existing app and in the new app.
2.10. Grace Period
To honor those who have intentionally saved their VP, there will be a grace period after the new VP system is implemented to use accumulated VP until the end of Temporal Echoes, on June 11th 2024 at 22:00 CET. This means that saved VP will not reset until the end of the Period, and that all other implementations would be inactive as well (i.e. VP generating at the start of the week, or the unstaking penalty).
3. Criteria of Success
Success for this proposal will be measured by:
- Increased Round Active Users (RAUs) and retention rates.
- A more equitable distribution of VP and protocol revenue share among eligible participants.
- Positive community feedback and engagement with the weekly reset
- Improved technical performance indicators, such as reduced server load and overall technical complexity in the VP system.
4. Disadvantages / Risks
1.Risk of confusion or resistance among current participants accustomed to the existing system.
- Mitigation: The voting platform's interface will be updated with simple, intuitive features to clearly explain the Vointg Point reset. This update will specifically highlight the risk of losing all remaining VP, votes spent, and undistributed rewards if a user unstakes mid-round. We will also gather user feedback to continue improving the system. Additionally, users will have a grace period until the end of the current Temporal Echoes period to use their accumulated VP.
2.Training might become less effective, and the number of stakers could decrease if occasional vote dumpers and infrequent voters are discouraged from participating in the weekly curation process. This could potentially lead to a short-term drop in the token price.
- Mitigation: Monitor defined success metrics closely, have a thorough comms plan in place for launch, and be prepared to roll back to the previous system if necessary.
3.Short-term VP dumping if the proposal passes and dormant accounts are made aware via announcements.
- Mitigation: The Grace Period is limited until the end of the current period, so any possible short-term dumping behavior will be removed when the new period starts and the reset is effectively in place.
