COMP Distribution Speeds

Governance Process
11

@rleshner I do not quite understand how you got the numbers in Supply and borrow, can’t be COMP per day, as if speed is same than it couldn’t be more than current about 2300 total COMP. But regardless, i’m a huge proponent of simplicity, predictability and ease for understanding, so take a look at my suggestion and below i’ll explain how i arrived to that numbers and some reasoning behind.

I group all existing markets into 3 Categories:

  1. Important Collateral Markets
  2. Important Stablecoin markets
  3. Minor markets

First i took 10% of distribution (0.0176) and distribute it in equal portions to each active market. Which makes 0.00195 per market. That portion just goes there regardless of current utilization of that market.
Next 10% of distribution goes to ETH market
Another 10% goes to WBTC market.
Both of theese markets are important Collateral markets.
Remaining portion is split equally between 2 stable coin markets. USDC and DAI. USDT market is positioned in Minor market because it’s not usable as collateral and thus can’t possibly compete with USDC and DAI at Compound. It’s not going to be big regardless of demand for that token as long as it’s in that state.

There might be arguments that Collateral markets might need bigger share, but we should keep in mind that we already taking away some distribution from stablecoins, we should observe impact and don’t introduce fast radical changes.

As for 50/50 and 75/25 distribution reasoning is. I believe it makes no sense to micromanage exact numbers, as liquidity will always be faster than governance, 50/50 split existed for quite a time, people used to it, liquidity will be easy to adopt and adjust. Could be changed later if needed, but i think it’s a good basis point. At introduction there might be some earning opportunities in minor markets, but i expect money quickly to adjust and profitability will balance itself.
I believe we should start with 75/25 for collateral markets, as borrow side of that markets was always on the low side. There might be some arguments that 25% might be too big for borrow side, but that’s for a reason. Here we not just follow market, we creating some initiative to bring more utilisation to that side. Not too much, that’s why it’s not 50/50, but big enough that we could see some interest there. I believe in long run, it beneficial to have somewhat more on borrow side of ETH and WBTC markets.

I believe it’s good simple starting point. Can be easily adjusted from there if need arise.

         Current            New            Supply         Borrow

ETH       0.0016        0.01955           75%            25%
WBTC      0.0011        0.01955           75%            25%
BAT       0.0000        0.00195           50%            50%
ZRX       0.0013        0.00195           50%            50%
UNI       0.0006        0.00195           50%            50%
USDC      0.0675        0.063575          50%            50%
USDT      0.0057        0.00195           50%            50%
DAI       0.0977        0.063575          50%            50%
COMP      0.0004        0.00195           50%            50%

Total     0.1760        0.176`
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