Rebases are locked in after x period have passed before it could be withdrawn

1. General Discussion
#11

The action of “rebase-hopping” between protocols is one that was inherent and possible from the start. It certainly comes with major risks for the hopper. Realistically, when someone hops to claim a quick rebase, they’re usually paying around $1 in gas (these days), they’re getting in at an extremely volatile price point, <10 minutes before/after rebase, and they truly don’t know if when they get out, they’ll come out with the same dollar value.

This means there’s a lot of factors to come into play when someone decides if they should be rebase hopping between protocol to protocol, to protocol, and so on, and so on. Ideally, you want the size of the rebase to at least cover gas, otherwise you’re just flat out losing money. Further, you want to ensure that the rebase value is greater than the slippage of your move(s), and we’re talking about a standard 1% slippage x2 for the entry and exit. That’s just the liquidity of the transactions. An additional factor beyond that is price action, and looking at what the most competitive price on different exchanges are, and if they can support your movement.

If at any point, someone is front-run by the market while doing this, and the price goes down in a deviation greater than 0.6%, the profitability of rebase-hopping is wiped out entirely, and they lose money.

If the position they hopped in with is great enough to withstand that kind of movement, and we say they just wait it out until the price action solidifies them enough gains to leave – by that point, the protocol has already likely used their money enough to generate a sustainable yield for their departure.

Remember, the protocol owns a large stake in it’s own liquidity, and “bag-droppers” pay us a hefty fine to leave. Rebase-hopping seems like the easiest thing in the world to do and be profitable until you try to model it mathematically.

As my point stands, I don’t personally think the rebase-hopping that people do is harmful. It’s simply a by-product that generates volatility because of … well, basically, people thinking they can beat the system. One might think they’re beating the system because “number go up,” but we’re the ones profiting off of their movement in/out, using their funds to reallocate sizably and immediately generate funds from their dollars, and they start to get rekt every step of the way if they’re not treading very, very carefully.

27 Likes
#13

Use HEX if you want lockups.

1 Like
#14

  1. You shouldn’t FORCE long term commitment. Especially for something where there is no formal long term plan. The entire point of the rebase period is to be awarded those rebases for the risk we are being exposed to by holding TIME.

  2. People buying/selling around rebase really has no impact on you. We know this because a) the run up and dump in price around rebase is usually pretty small and most of the time the price recovers b) the apy doesn’t change signaling that the people doing this aren’t stealing anything out of your pocket as a long time holder. We’ve had the same rebase for months now, and you see how much the price went up

  3. There aren’t many wallets doing this because it’s simply not worth it for 0.6%. Think about the time it takes to buy TIME, stake it, rebase, unstake, and sell TIME for stable. The price of TIME could easily fall more than 0.6% from beginning to end. And then there are the fees for all those transactions.

15 Likes
#15

I personally dont like the idea. Hopping is benefiting the protocol. And i dont like the idea of money being locked in crypto. I started doing crypto because i have power of my own money

5 Likes
#16

To everybody disregarding this idea, I’ll just try to clarify what the author of the post meant with “lock-up period of rebases earned”.

I see the major complaint is about the fact that the stockholder should be able to do whatever he wants to with its funds, included withdrawing immediately after having staked them.

Well, guys, I reckon the author was talking about a lock-up period for the rewards:
If you stake 1000 TIME right before a rebase happens, then a few seconds later you would have 1006.14 TIME (at current APY). If you were able to immediately sell everything, this would basically imply an “arbitrage” opportunity, i.e. a riskless profit, given that the transactions are made quickly enough that the price remained stable in those few seconds (a whale’s bot could do this, for example).

The whole idea behind the lock-up period is for the rewards, and the REWARDS ONLY, not to be claimable for a given period of time.

This means that the rebase exploiter/arbitrageur would only be able to withdraw its initial investment during the lock-up period, i.e. 1000 TIME (rather than 1006.14 TIME).
If he were to unstake before the end of the lock-up period, he would end up losing its rewards.
Otherwise, if he keeps his fund staked, they would simply continue to compound at the spot APY.

Suppose a lock-up period of 6 days (= 18 rebases). Suppose you invest 1000 TIME.
After 5 days (I chose 5 days just for conveniency, since we’re given the 5d ROI), you would have 1096.18 TIME at the current APY.
Yet you would only be able to withdraw 1000 TIME, and if you were to do it, you would lose the remaining 96.18 TIME. However, if you keep staking 1 day more, you’ll get 1116.495866.
Now, since the lock-up period ended, you are able to withdraw all your balance of 1116.495866.

Only rewards would be locked-up. You will always be able to withdraw your initial investment in TIME, no matter the lock-up period.

However, such a mechanism would prevent exploits of the rebase system by arbitrageurs, and would discourage short-term traders, so that mostly long-term investors will jump into the project (3,3 being the most beneficial strategy for the protocol, maybe along with 4,4 i.e. minting and staking bonds proceeds).

The lock-up period does not intend to impose to investors any type of restriction on their capital, but on their eligibility to rewards, and still this would be a short-term restriction that would likely benefit every holder.

[Current APY, as of December 12th 2021, has been used for computations in the example. The lenght of the lock-up period in the example is completely fictional and chosen purely for computational conveniency]

17 Likes
#17

This seems a great solution to this issue to me!

2 Likes
#18

Yes we know. You are asking investors to lock their money up with no guarantee and no rebase to compensate for the risk they are taken.

That’s like minting without getting the discount. You completely cut out any incentive for people to get in and ask them to take on all the risk.

You are going to scare people away. I think there’s a misunderstanding of the point of rebase. It’s to award people for taking the risk of investing

Rebase trading is not an issue as I and others have mentioned

7 Likes
#20

I actually think that’s a good idea.

1 Like
#21

This is actually a good and beneficial idea, but this Progressive rewards to avoid rebase trading seems to be a more patient way of preventing rebase sales!

#22

I think an unforced option would be nice. A lower APY for those who don’t want to lock-in and a progressively higher APY depending on how long you stake. Those who don’t want to be locked in don’t have to. Those with a long term horizon could be rewarded. Incentivize the behaviors we want.

4 Likes
#23

This is a solution to a non-problem. Locking funds is never a great choice. Rebase jumpers lose typically and turn thier APY to APR. Restricting movements is not very DEFI, and sounds like desperation.

10 Likes
#24

i like it, it could be a sort of VIP system (which people absolutely love it) where higher level is linked to a higher apy and maybe some other prize like NFTs or stuffs like that.

#25

Quoting you just to make people read twice that we’re talking about a non problem.
Also happy to see you in here as well!

4 Likes
#26

This. (need 20 characters)

4 Likes
#27

Hey,

maybe a solution tothis rebase problem could be implementing a rule: that in order to receive your rebase(rewards) you HAVE to stake your capital for the 8 hours?

If you take your money out before the 8 hours, you lose your rewards.

Or, maybe another solution is to implement an internal clock for every staker, like a counter so it counts the time the capital was staked. This way the rebase time for every staker would be different. If you kept your TIME staked for 8 hours from the moment you staked, then you receive your rebase.

I can’t say I see the point of jumping in and out, but I gues a huge amounts it may be worth it.

#29

I like this idea, maybe in the form of snapshots like how Jade does it where if you unstake you’re ineligible for the next rebase. Just a thought im not sure if this is what yall were thinking.

#30

Chech out metaversepro new 6, 6 staking…very intresting concept

#31

Isn’t 6,6 selling high and buying low? (Hard for most actors to do)

#32

Totally agreed, I think that stakers should get rewards for how long they are staking but should never lock their TIME, it goes against the porpouse

1 Like
#33

I still disagree with the premise, but I appreciate the clear explanation.

1 Like