IIP-73: FLI Economic Model Upgrade - Past Gas Costs

Hi @allan.g,

This is a fantastic idea. :slight_smile:

Cycling COMP into the product is forward looking right. I’ve left the door open for future rewards.

What we do know is we have no efficient way to distribute COMP rewards retrospectively to compensate past users who have since sold there FLI tokens.

We therefore can look at the accumulate COMP rewards differently to future COMP rewards.

The FLI product offering has a heavy lift during the early stages of its life. The LM rewards on COMP are for 3 years. That’s a run way to cover the front loading burden of the product range. This means we can recover costs via the LM rewards whilst we improve the product.

Do we roughly know the % of vol decay?
What this will tell us is how much of the future LM rewards we can extract to support on going developer costs.

Note:
Most of Index Coops contributor rewards are for DPI, not FLI products. So FLI’s contributor costs are less than simple Index products. When we start doing contributor rewards per product offered, we will have data to confirm my suspicions. This excludes developer costs of course. There a completely different kettle of fish.

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@Matthew_Graham Fully in favor of retroactive reimbursement of gas costs to Index Coop and Set Labs using idle COMP rewards.

@allan.g Offsetting the negative effects of volatility decay for tokenholders is a great idea for future changes to the product. Would be keen to see a detailed proposal and IIP. Regardless of the merit of the idea, I don’t think that should prevent us from acting quickly to retroactively reimburse past gas costs from FLI products to Index Coop and Set Labs.

Thank you @Matthew_Graham for your creativity and bias for action!

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Fair point - seems like my comment belongs within the Future Gas Costs proposal!

We don’t have an exact % yet for vol decay but we are trying to get there. Will include updated intel in the Future Gas Costs post.

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Hi @gregdocter, @Pepperoni_Joe

May I please have an IIP Number assigned, a discord discussion channel created and a Snapshot vote scheduled for Monday 16th August 2021.

Thank you in advance.

Totally makes sense!

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Hi @Matthew_Graham - before this progresses to IIP I would like to get input from the Product and Engineering teams cc @puniaviision, @overanalyser, @afromac and @dylan.

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Will discuss with team and reply asap.

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Thanks for this post @Matthew_Graham. This is definitely a step in the right direction for the Coop.

I’d like to provide some clarity on the engineering work required to implement this feature. I will only be describing the work required to claim the accrued COMP and distribute 100% of it to the community treasury. Splitting it between DFP, the treasury, and FLI holders is a much more complicated task and a discussion for the future.

This feature requires writing one new extension contract for the FLI manager contracts. Fortunately Set has built two modules that can help out, ClaimModule and AirdropModule. The ClaimModule would be used to call the claim function on Compound’s Comptroller and send the proceeds to the FLI token. AirdropModule's original intent was to be used to add an airdropped token to become a valid component of a set token but introduces an optional manager fee which we can set to 100% which will allow us to sweep all of the COMP to our treasury.

The above may sound a bit complicated, but it’s actually not that bad. I am fully confident that we can build this feature mostly in-house.

EDIT: looks like anyone can call claimComp for any address so we don’t even need to use the ClaimModule. This makes it a bit easier.

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@ncitron thank you for providing the technical insight here. It is very welcomed and appreciated.

To clarify - can we recover a portion of the COMP rewards or does it need to be 100% ?
Kind of sounds like 100% needs to be distributed and can only be distributed to a single entity, ie:Treasury in this instance.

100% would be easiest, but the design space is actually pretty open here. For example, we can have the fee recipient be a splitter contract which then splits the revenue between any number of entities. Additionally, we can have it only charge a X% fee to the treasury and then reinvest the remaining COMP back into the FLI product.

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Nice :slight_smile: I seen this functionality in the way it was written but wanted to clarify.

@afromac - what are your thoughts on claiming a % of the COMP rewards? I think we can proceed to vote to recover a % of the COMP rewards recovering sunk gas costs. Let me know a number and I’ll amend the post. :slight_smile:

Hi @Pepperoni_Joe,
May we progress to snapshot starting Monday 23rd August ?

Hi Matt

We have been considering this proposal for several days now so thanks for your patience. The suggestion from the PWG is to put a hold on this idea for now and revisit it at a later date.

Currently, there are a number of important ongoing discussions relating to both these products and wider strategy within the Coop. All of these conversations are both time sensitive and extremely high stakes. In this context, we see this proposal as neither time sensitive nor high stakes. Moreso, it is unclear if this is even the best use of these rewards. Further investigation and discussion of this idea is merited - at the very least.

We would be happy to return to this discussion later, when the community has had adequate time to consider the more options, and when greater consensus has been reached on this and a number of other issues.

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Great idea. Thank you for the feedback and sharing it on the forum.

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Hi @afromac,

A month has past since this IIP was placed on hold. Any chance you can share the results of the further investigation mentioned in the previous comment?

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Hi @sixtykeys and @mel.eth,

Can we please move IIP-73 to snapshot with voting starting later today 27th September.

Thanks in advance.

Hey @Matthew_Graham, this proposal is still in the ‘draft’ stage, and can only go live 48 hours after the status has been changed to ‘proposed’ as per IIP-26.

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@Matthew_Graham noting that I’ve changed the status to ‘Proposed’ per your recent request that this go to vote; the soonest this can go to snapshot would be September 29, but I would recommend that it be queued for Monday October 4 so that it runs during weekdays. Please reply with your preference. Flagging @overanalyser, @afromac, @dylan, and @puniaviision per @Pepperoni_Joe’s request above for PWG and EWG input. cc: @sixtykeys

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We want to be an organization that makes the best decisions possible. With product and technical decision making, there tends to be complexity that is abstracted away from contributors. As a result, those with the most context should be the ones pushing these decisions. In the alternative world, if anyone could push a product + engineering IIP forward and it passed, but it was impossible to implement, that would reduce the legitimacy of the IIP process. Additionally, EWG and PWG need to be able to prioritize their work which can’t happen in this alternative world. Because of this, I think only PWG and EWG members should be the ones able to push IIPs related to our work through the IIP process.

These considerations aren’t baked into the IIP process. That is work that needs to be done. Though it seems like it is something that is sensibly being enforced by the IIP editors.

I actually don’t think most of what I described above is relevant to this IIP. Though I think the process those considerations point to should still be respected. The product and engineering considerations are not that complex and all the work [to my understanding] on the technical side has been done. The main complexity here is the sensitivity of the existing conversation with DFP and the product strategy. I don’t know why @Matthew_Graham you are making this a big priority given the base-level work that is happening. There may be something I am missing so please feel free to correct me. Form my POV, that money will always be there and always claimable if it is something we want to do with DFP.

That said, this is just my opinion, and the final decision-makers here are @Cavalier_Eth as the Product Leader and @afromac as the Pod Lead. I will strive to protect their time when relevant because I know the ginormous amount of threads they are tackling right now.

Any decisions about the economic model of the FLI products are going to be contingent the outcomes of this discussion - The New Path Forward of Index Coop’s External Relationships.

Thanks for your reminder that we have this option @Matthew_Graham, but PWG recommends pausing this IIP @mel.eth and @sixtykeys until a holistic solution has been agreed by all stakeholders.

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