Or, more accurately: we’re getting $450k from PL, $250k of which is going to back Grain as it currently stands and $200k of which is unallocated. This post comes out of conversations from yesterday’s Town Hall.
We’ve all been feeling the pressure of the continual drop of the Grain-to-USDC peg. Let’s figure out how to use this $200k to relieve that pressure. I believe we will be best off if we focus on the period of time between mid-December (the start of winter break) and mid-February. I’m aiming for short-term solutions here that can be implemented before break and only last 2-3 months, especially since we’re aiming to get Grain on-chain around February/March.
Here are the options I’ve found people proposing on the Discord. Let me know if I’ve misattributed, misunderstood, or just fully missed something.
From what I understand, this would mean fully cloning existing Cred scores (so no one’s Cred score would change, even inactive users) but not carrying over earned Grain. Thena also proposed paying out directly in USDC, which I understand to mean pegging Grain in the new instance back to USDC 1:1. The old instance would still exist; it would simply be frozen, so neither Cred nor Grain would increase there. Currently we give out 25,000 Grain every week; this amount would be different in the new instance, and we’d need to decide how much we’d pay out weekly.
Fictional Contributor Frodo currently has an over-all Cred score of 2,000 and has accumulated 10,000 Grain. Frodo was receiving 100 Cred per week and 700 Grain per week (aka 2.8% of Grain paid out from a pool of 25,000 Grain every week), for the past month.
When we clone the instance, Frodo’s cred score in the new instance (let’s call the score Cred2) will be 2,000 and their grain in the new instance (let’s call it Grain2) will be 0. Frodo will accumulate Grain2 according to their Cred2 score. Since Cred = Cred2 at the start, they will still be receiving 100 Cred2 per week. The amount of Grain2 we distribute weekly will be different from the original instance, but people will still receive the same percentage of the pool according to their Cred2 score. Since the Cred2 = Cred at the start, Frodo is still getting 2.8% of all Grain2 payouts each week. If that pool is 20,000 Grain2 total paid out weekly, Frodo gets 560 Grain2 (and thus 560 USDC) every week.
Frodo will still have their old Cred and Grain, and they will still be able to take out their old Grain, but Grain2 will be pegged to USDC 1:1 and the old Grain won’t be. (Will old Grain keep dropping, or will we keep it where it is now?)
- Inactive contributors can still redeem their old Grain and will still be making some amount of new Grain (EDIT: if they opt in)
- If an inactive grain whale wants to take out a bunch of old Grain, that won’t screw over active contributors who depend on SourceCred for their livelihoods. Old grain will be backed by the $250k mentioned above.
- Active contributors will get a big bump in what they’re being paid thanks to the re-peg.
- Old Grain will continue to depreciate (or stay low in price)
- Creates a new system to deal with, which could create complications. We’ll need to have an exit strategy in place so we don’t have to juggle a bunch of different systems in perpetuity. @blueridger has suggested that we might do a 2 month redemption window for old Grain, at the end of which we reabsorb the remaining backing funds and say any Grain left is only redeemable for on-chain $GRAIN.
We re-peg Grain to USDC at a ratio of our choosing. @Jolie_Ze has proposed this previously. At least for the short-term, I propose existing Grain will be worth the new price, but we won’t be retroactively paying people back for when Grain was pegged lower. (I’m open to doing that in the future, but that’s contentious and we need to make a decision quickly.)
- Simple, easy to implement and change
- Active and inactive contributors alike will get a bump to our pay
- Inactive grain whales might be able to empty us out unless we set a redemption cap.
- Easy calculations for allocation, once we decide who makes how much.
- Deciding who makes how much could be contentious and complicated, especially since we haven’t done it manually before
- Would mean we aren’t dogfooding anymore, at least for a time
What would you like to see in a short-term allocation plan? What do you like and dislike about these options? What other possibilities can you think of?