Turning off the GHST Bonding Curve

[aaron555]

Would another option, that might meet people halfway, be to change the curve function to have, say, strong support at the $1 and below mark and start to dissipate above $1 ? (I know there’s a name for that type of curve… I just can’t find it)

Personally, I’m much less concerned about the “efficient use of capital” part. As we are seeing, there are many who really like the Curve, so if that tied up capital has brought in interest and holders into the project, then that capital does have a good use. All that is to say, is that these things are “complicated”… sometimes it’s really not clear what drives long term demand and there are complexities, etc. I think Crypto people tend to look at APYs and think things are much more black and white, but it’s really not the case… at the end of the day, all of this stuff made up and value is subjective. But I digress…

I’m more interested in the argument for : “Big green candles bring attention to projects”, which can bring in people (again… yes, many short term speculators but also a good amount of holders/players/builders, etc).

[MichaelF]

Thank you for opening the discussion and for all the pros and cons mentioned. This is interesting to read and follow up.

My 2 cents:
My first Gotchis were born 511 days ago, and I did invest because I liked the idea of a stable $GHST token bonded to the curve, the team and the community.

Now, we are 57 % down from the $GHST ath 9 months ago, land prices are about 1/3 of the price, wearables are hard to sell with a volume of 2500 $GHST in the last 24 hrs, and a 478 BRS, 704 Kin, 955 XP Gotchi for 750 $GHST retires in the Baazar (not mine).

As much as I love the BC, I have to admit that it probably would not look a lot worse without it.
Everyone is aware that the idea is not about turning off the curve now, but in a future scenario.

What do we expect after decoupling from the BC:
a $GHST token that can appreciate in price more than without. I am sure it will, given gameplay is improving. I am bullish on Aavegotchi, the PC team and the DAO.

The success of Aavegotchi is measured in KPIs like the number of total players, asset holders, unique addresses, value locked…and the price appreciation and MC of $GHST.

Addressing the Elephant in the room: the ecosystem needs revenue income. Sponsorships, Dao services, token and voucher drop services, node setups, Hackathons, etc.

I want to keep this short and don’t spam this thread with other topics that are related to this decision as well.

[kripp]

This.

Most people here do not understand the amount of money exiting the ecosystem via arbitrage – the curve is essentially a type of Protocol-owned-liquidity and can be replaced by mechanism designs that don’t leak value. This should be the core of the proposition. Let’s calculate this value if need to first and educate people. Ignore the silly poll in the middle that says should curve be replaced… because some actors will certainly act against the best interests of the group if they’re making money from that play. Once we calculate/educate, then next step is to decide if it will be worth replacing.

If it’s replaced by an adjustable POL design, you can have the same effect of dampened volatility while NOT paying millions of dollars (guesstimate?) of profits out to arbitrage profiteurs who took zero risk and just suck value out from the system.

[jarrod]

How are you calculating this millions of dollars of profit figure made by curve arbers?

Why would the price of GHST differ by so much and so frequently between the curve and CEXes/DEXes that would allow millions in profit to be made?

[Moon]

There are a few arbers from what I’ve seen (obviously I don’t know their identities), but this is one of the largest curve arb <> binance wallets: Address 0x897ea9abcf6ec0e27194b69f007305952f96c7aa | Etherscan

If you’ve monitored his behavior for a while, you know that he becomes active as soon as there’s a 2% spread between nance and the curve. During wicks (of which we’ve had plenty) these spreads can increase rapidly - partly driven by momentum algos that are running on binance. But anyways, let’s assume he only makes a very conservative 1.5% profit on every single arb. In the last 30d alone he’s roughly done $2M in curve volume, which equates to $30k in profit. Now that’s just half a page of his Etherscan ERC20 transfers, of which there are 50 in total (with much more jawdropping transfers in there). Here is is just casually transfering in 2.5 million GHST from binance, no biggie:

Oh and have I mentioned that he’s probably the single largest holder of GHST? No? Well here he’s sending more GHST to binance in a single tx than the public PC multisig had before the DAO token swap:

Better hope he never transfers it over to Polygon to sway a vote in his favor

[JG1]

@coderdan

I will also work to dispel any myths or mis-represented points

Please review the information shared by Moon above ser.

I don’t think we’re dealing with myths or bogeymen fantasies here, this arber and his growing 6mm+ GHST position are a real systemic risk growing by the day- born from our reliance on the curve and lack of competition. Double or triple the time this arber continues to operate, and his position becomes 12 million GHST, 18 million GHST, etc.

The fact is the curve is an arber’s dream. It greatly reduces risk while providing predictability and backstop liquidity. I disagree with the notion previously shared by @coderdan that this guy is simply receiving fair due for taking risks. It has been clear from reviewing market and price action for many months- that him and perhaps other arbers have a pretty consistent and predictable workflow to maximize profits and reduce risks. When there is a spike, this arber isn’t rushing to transfer from L2 to a CEX, they already have swathes of inventory at all the endpoints, simply ensuring they capture the benefits of any move near 2 percent and above- they just get faded/filled from their existing inventory, and can reconcile balances EoD.

If this guy dumps his GHST, or uses it to vote, we would see this is much more than a myth or mis-representation of facts.

[Maxicrouton]

Concerning the arb problem, anyone who is KYCed can arb, and it’s true that during peaks it’s profitable. But for example here in 2 months, it would have been better to farm on the gotchivault/stake its ghst to have a higher return than curve arbitrage. He (0x4ec…) is all alone to arb on binance because the opportunity cost (we can’t stake on eth/binance) of staking is huge (especially with over 1M ghst) but anyone is free to compete with him and much less money will be “extracted” from the arbitration of the curve.

(I’m one of the curve arbers, my address has already been spotted on discord, and you can see that every money I earn on arb is used to buy GHST )

Moreover, if the price of GHST becomes “floating”, we can really expect huge swings in the future. GHST-USDC LP will be dried up (now the IL’s are really low so it’s one of the best yield on aavegotchi ecosystem right now) this will lead to very low liquidity. And then arb between quickswap/binance will continue to extract (even more) value I think.

I don’t think the arb is a real problem, if this guy didn’t have the monopoly on arbitrage on binance it would already be better, so go create bots frens.

(Tips: binance wallet is drying up ghst on the ether side since they allow polygon deposit/withdrawal)

(BTW : 0xea5915C08a9b1bEc9bD0C9b50817221457803E64, stop using limit order on 1inch, you’re giving so much money to MEV extractor)

[JG1]

@Maxicrouton

(I’m one of the curve arber)

Thank you kindly for sharing your perspective fren! It definitely helps to learn the perspective from those arbing as we explore this topic and the broader topic of the curve.

I have actually not taken a final position yet on whether I want to see the curve turned off or not. I share the concern of many that NFTs/assets could be worse off and the singular benefit would be a higher GHST ticker price.
On the other hand, we’ve seen clear evidence that lack of altcoin-y momentum for GHST can go a great way in isolating us from the broader ecosystem (still by far composed of degens and apes), exacerbated by the fact we live in polygon vs. mainnet. I didn’t have this mentality a year ago, but it has grown from seeing people come and then sell at a loss… literally hundreds of times…
So maybe we are smol niche community and will forever remain so? If this was our philosophy, we could just make-do with what we have, keep the curve on, and enjoy the game and what we can make of it with the runway we have. I could live with that!
Pixelcraft has expressed their main goal is to grow users however, and has shown a willingness to dilute our investments/the NFTs in order to bring those new users. I don’t think the DAO would succeed postponing sales forever, before Pixelcraft would flex its veto power or threaten with leaving the project for the DAO to figure out on its own.

So, if based on the points above, we are in danger of repeating 2021 where we double the gotchi count, quintuple the wearable count, all for an extra 300 users and a week-long 2X on GHST that is faded by curve… yeah… I rather turn off the curve than witness this scenario play out (again).

@Maxicrouton

so go create bots frens.

Now this is the kind of forward conversation I think we should be having

In exploring how much the DAO is indirectly paying arbers for curve services, couldnt the DAO and/or other segments of the community look into establishing an arb operation/presence? Definitely looking forward to comments and ideas on this from others!

[kill_er]

This is an anti-panzi project. This is a project where OG will also lose money. All in all fair, I’m already poor anyway. If you want to make quick money please stay away as soon as possible. ；）

[Honeymoon]

Eh, so basically, the game isn’t attracting new investors or players organically so let’s decouple our ecosystem currency from fundamentals and let speculators with no interest in the actual game add (i.e. extract) value while we devise demonstrably vampiric strategies like buybacks and 4 way liquidity pools to run Aavegotchi into the ground before the game is even in Beta, because we all think we’re smart enough to ignore economic fundamentals and still make a profit during the next bull run that may never happen.

…or am I missing something?

Maybe we should be grateful that we have a stable ecosystem and finish building a complete fun game before making drastic changes in the name of profit.

Like, it works, and it’s self sustaining. I personally think more gameplay and rich features are more important to focus on now than hoping someone wants to buy a currency that will suddenly track all other crypto into what appears to be a 2-4 year bear market.

[Honeymoon]

Dude, most game tokens are down 90% from highs, which requires a 1065% increase for full recovery, much worse than a 50% drawdown requiring only 100% price increase for recovery. I think you’re taking BC for granted as it has effectively saved you from a 900% drawdown, assuming you ever wanted your original investment to appreciate.

I think that all the things you think the ecosystem needs is true, but taking away the resident stablecoin and hoping magical angel investors decide to pump it in a bear market while 99.99% of all other tokens are being absolutely murdered is blind faith in the free market at best.

[CryptoGotchi]

I’m calling it. Honeymoon = coderdan’s alt for venting

Jokes aside, I vaguely remember @coderdan saying that the BC can be turned off, but not back on again. Which sounds to me, like the contract can’t be upgraded, only stopped. Did I get that right?
Otherwise, @GhostyFever 's suggestion seems like the perfect compromise to me. From what I understand, he suggests capping the total supply of GHST. One would probably just need to put one require() somewhere in the GHST minting function that enforces “current supply” + “requested amount” < “total supply cap”. Where we’d cap it would be up for debate of course. At 53 million GHST (would be at ~1 GHST = 1.5 DAI), 60 million GHST (would be at ~1 GHST = 2 DAI), or even 74 million GHST (would be at ~1 GHST = 3 DAI) like he suggested. Other than that, just let the curve run. So below the threshold price, we get the protection, while above the threshold price, we might get the super pump that some people here are hoping for.

[Moon]

Thank you for protecting me Mr. Gensler Bonding Curve

(Don’t take this too seriously lol, but you ignored most of the points I made so I’m returning the favor )

[MichaelF]

I am aware of the calculation behind a 50% and a 90% drawdown. Guess you misunderstood, Ser.
I do love the bc but I would have thought that it would provide more stability. It slows down the effects and protects against big red daily candles.
That the project is not -90% is due to a small community of investors that love the project they invested in and did not rush into selling out.
Re angel investors, this is the last thing that we should introduce. My point was to think about generating a healthy old-school revenue, even with web 2 companies as clients/sponsors.

[Honeymoon]

I actually don’t want to ignore them, I just think you’re not saying anything new, and neither am I. Both are the exact same argument made from the beginning, and it appears to me people are just growing impatient with a bear market, since there is nothing else making money (aside from shorting, which most people don’t do), now we’re looking at last strongholds of value to extract out of things we were very certain we would hold fast to throughout thick and thin because it seemed like an incredibly good idea at the time, and regardless of the fact that it has actually done pretty well, for this market, we want more.

And unfortunately, the structure of a DAO is such that this question can continue to come up over and over again until the side that wants to change for better or worse gets their way, because it can be voted down and then brought up again for all eternity until the side that wants to fiddle with something that works well gets their way and we all get to go down the waterfall together in an alpha version of a barrel to see what floats.

Yeehaw.

[Honeymoon]

LOL I get your point, though, but I also know that the vast majority of investors pour liquidity in during high volatility spikes to the upside (pico tops) so the BC absolutely saved them insane amounts of money.

[aaron555]

@Honeymoon

I actually don’t want to ignore them, I just think you’re not saying anything new, and neither am I. Both are the exact same argument made from the beginning, and it appears to me people are just growing impatient with a bear market, since there is nothing else making money (aside from shorting, which most people don’t do), now we’re looking at last strongholds of value to extract out of things we were very certain we would hold fast to throughout thick and thin because it seemed like an incredibly good idea at the time, and regardless of the fact that it has actually done pretty well, for this market, we want more.

I really don’t think it’s about that. It’s about preparing for the next bull market as Moon has said, it’s about having some foresight and preparing. Most of the people advocating are large holders (not me) with a fair amount of patience. No-one would argue or hope that turn off GHST bonding curve means insta-pump during this bear market.

Again… it’s been said by several people many times big green candles attract attention, speculators, and yes, some people will get hurt by fomo-ing in at tops on leverage… but that happens regardless. It’s about getting attention to the project and you can attract a large cohort more that will still stick around. We know that Aavegotchi is one of the most interesting and innovative projects out there, people just need an excuse to look into it more - “oh this is trending on Coingecko…better take a look.”

[kill_er]

@Honeymoon

more gameplay and rich features are more important

As the gameplay improves, people will come to play. This is a false proposition, games written on smart contracts will never be as much and fun as games on steam. Then steam games are much cheaper. If aavegotchi wants to expand its users, it has to achieve financial integration and move closer to gambling.
The current playability of aavegotchi is the thrill of opening a portal, or the thrill of a lottery draw.That’s the most adrenaline-pumping part.
Block games are another dimension entirely. If you still want to improve the playability like traditional games. Then you are completely on the wrong path. Due to contract and blockchain limitations. You can never compete with traditional big games.

[Egor]

@coderdan

Curve arbers take risk in running cross-chain arb, and are rewarded for it, just like any other AMM. To date they’ve also paid us 2.5M worth of DAI, which (since you asked) would be enough to fund one season of rarity farming (at current levels).

This is misleading. You count only fees paid to The Curve. In reality, it works a different way.

• Someone buys GHST on Polygon
• Price becomes divergent on Polygon and The Curve
• Arbitrageur buys GHST in The Curve and sells on Polygon, netting profit to their pocket.

Initial buyer pays to arbitrageur for delivery service. Instead of being added to the gotchi ecosystem in the entire portion, we spent to arbitrageur.

@coderdan

The term “exploiting” makes it sound like the arb is unintentional, or a hack. When actually it’s a perfectly normal process that happens on every single DEX on every single chain. The arbers are actually providing a valuable service, keeping the spread low on all major exchanges.

No one said arbitrage is unethical. We are talking about making the system more efficient and cutting costs. Isn’t this essential for any business and financial organization? We are discussing an option to lower costs. But you are saying, “guys, all good, arb is ok,” even before making any calculations of how much it will save for us and what is the price of these changes.

@coderdan

I don’t think that’s true. We (the ones informed) all knew the benefits and drawbacks of the bonding curve, but we made the decision to implement it because of the desire to use GHST as a unit of account throughout the ecosystem.

The decision was made to have The Curve on the same chain as the whole ecosystem. Even having a KYC wall was ok, and I like the bonding curve idea in a vacuum.

[Egor]

@JG1

Many speak as if the curve is free and flawless- the reality is that MILLIONS flow to a single or handful of curve arbers every single time that our economy and valuations could grow instead. We missed the best parts of the past bull run, for some “stability and safety” that has evaporated either way, as GHST is not far from $1, and NFTs have and keep dumping.

How many RF seasons could we hold with what curve arbers have earned so far? Why does nobody look into who these parties are, how many of them , how much do they extract, and how worth it is it to retain their services?

Last time I checked (one year ago) it was Wintermute or Jump Trading.