By delegating A Z funds you are actually touching/changing network emissions , since A Z funds are not supposed to yield, but on the surface it’s just “delegating”. So it’s better to be more transparent about it and actually change the emission instead of “delegating” if that’s your idea.
Why are AZ funds not supposed to earn yield? In fact, I beg to differ. Delegating AZ funds is a clear avenue to redirect rewards from passive participants to active ones. It’s a win-win for the network.
I also don’t think the emissions set aside for the Orbital Program should always be paid as yield. I think a percentage should be owned as liquidity by pillars. The advantage is compounding and growing the liquidity overtime and being able to redirect it to whatever place we deem more beneficial i.e moving the liquidity from Uniswap in ETH to any other dex somewhere else.
Not sure about this, do you mean the pillars would take custody of the funds in a liquidity pool and the rewards would just go back to the pool?
Orbital rewards are the incentive to grow liquidity over time and can be tied to any number of pools. Why would we dilute the weighted yield of the lps with this pot of funds? The reward is already there. If we finally get the orbital program going and the rewards are not enough then might be the time to rethink it.
Same goes with putting AZ into delegating or staking, since its a weighted reward its just diluting it for everyone with little net gain.
Yes, the idea is for a percentage of the LPs to be owned by the network. The goal is to slowly grow that position to become less dependent on the liquidity provided by yield farmers. I’m not suggesting a black/white approach of no yield/all yield, but a gradual reduction in the percentage of the Orbital Program emissions being used to reward LPs as the liquidity of our network improves.
LPs rewards will probably never go to 0, but it would allow us to redirect some of the Orbital funds towards A-Z or anything else we deem beneficial, while simultaneously becoming one of the biggest liquidity providers ourselves, owning our own liquidity.
I think it’s imperative we find a way to make the AZ fund a sustainable longterm mechanism. We’ve already achieved that with orbital, which pipes rewards direct from the protocol emissions to LPs
This kind of longterm design is extremely attractive. Shows we are serious and here to stay. The longterm value-add this will bring to Zenon will far outweigh any short-term decrease in APY a delegator/staker/LP may experience. You may have less coins, but their price will be higher in the longrun.
Furthermore, if we do it now we only risk upsetting the 1k or so members of our existing small community. Any newcomers will just assume that’s the way it’s always been.
And yes, I’m aware that the 1k holders of ZNN is just 10 people with 100 alts each.
While I agree that delegators should foot an overproportional share of the bill, dont forget that they represent the largest share of the community in terms of # of members.
Reducing delegator rewards will increase our dependence on fewer, higher capitalized or invested network participants. This may lead to more stable pricing due to lockup periods for sentinels/pillars/stakers, but will slow down holder base growth.