SIMP-3: Change Short-Farm Maximum Reward Allocation from 40% to 100%

Not for this proposal, no. It’s quite straightforward.

Glad to hear that the community can fix this alone. It seems to me TFL is trying to distance themselves from Mirror after the whole mess with the SEC.

About the contract code change, both the 40% hard cap (line 45) and the result division (line 68) should be updated.

If you change only line 45, the short rewards will jump instantly from ~40% to 100% when the premium passes 7%.

In addition, the contract test file should be updated.

I would be happy to make the necessary pull request when the time comes.

Oh yeah should be divide by 5.

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What if this proposal doesn’t reach quorum (although the vast majority voted yes)?

Let’s please all vote to pass this !

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Help spread the word, post on youtube and on twitter

Hi,
Very happy this has passed quorum, does anyone know when it will be effective?

It might take some time

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More generally, I think it’s pretty clear that the tethering mechanism pioneered by perpetual swaps does a much better job of keeping the price of derivatives in line with the price of the underlying security.

Would it be possible at this point to complement the printing incentive mechanism with some sort of funding exchange every day or so?

This would require a vast overhaul that isn’t even being considered by the MSC. But I’d encourage you to work on other efforts for potential changes instead of just hoping someone else fixes it. We’re all innit together.

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I would probably implement it broadly along these lines:

  1. At midnight UTC every day, look at the spread between the pool price and the oracle price for mXYZ.
  2. long counterparties’ collateral gets decreased in the following way:
    Percent amount paid by longs to shorts = Max { Min { (poolPrice - oraclePrice) / oraclePrice * 0.025, 0.50% }, 0% } * size of position

What this does:

  • if poolPrice < oraclePrice : no exchange
  • if 120%*oraclePrice > poolPrice >= oraclePrice : longs pay (poolPrice - oraclePrice) / oraclePrice * 0.025 of their position to shorts
  • if poolPrice >= 120%*oraclePrice : longs pay 0.50% of their position to shorts

A few things to note:

  • the above means that the longs would pay at most 0.50% of their position every 24h. This is 3x less than what they stand to pay on centralized exchanges on perp positions but most mAssets are tied to equities which for the most part are less volatile than crypto
  • the Mirror protocol wouldn’t take any commission on this
  • I’d be happy to help implementing this

Long positions are not required to stake any collateral to go long an instrument. There is nothing that Mirror has any capability to decrease in the way described.

Broadly speaking, I think that this would help, but there is nothing in the current design that this can even be bolted into; it would require a complete protocol redesign. Quite frankly, for a change of that magnitude it would be easier (and more potentially lucrative) to build a competing protocol than make the changes to Mirror.

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You’re right of course @josephsavage, currently there isn’t any money tied into any of Mirror’s smart contracts by a counterparty who buys mAssets.

Then I would have to agree with some of the other suggestions, the minting fee needs to be a function of the premium.

Anchoring arbitragers (and traders) expectations of premium levels can be achieved this way and, although it reduces the total revenue for the protocol, printing more MIR tokens is not the way to go long term.

The minting fee would have to be negative, even a zero fee won’t help with the current high premiums. I support increasing short farm rewards and/or decreasing long farm rewards.

:slight_smile: you can already vote about it for another 8 hours

Where would a negative minting fee be funded from?
If it’s from MIR emissions that’s not economically different than simp3, except more easily gamed by DN farmers.

That’s why I’m for this proposal and not a variable minting fee.

In addition to increase the potential maximum reward for minting, we should act quickly by creating polls to reducing MCR for the mAssets derived from non-volatile large-cap stocks and cryptos. Reducing MCR would be quick and can immediately help resolve the high-premium issues. There are multiple assets having crazily high premium around 30%.

Why was this rejected? we had more than quorum a little while ago and now it appears to be below quorum. What happened?

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The UI has a bug and calculates the quorum as if the gov. stake was ~33m when it is in fact ~47m. So the UI displays the poll as if it has met quorum when in fact it did not.