It seems like we need a spreadsheet that outlines the various lock durations from 0 to 1 year, and then the amount of DUST they would receive at each duration from early unlock up to full vesting. The amount of DUST received should make sense such that the longer a user vests, the more DUST they receive across all lock types/durations.
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Yes, and potentially one more differentiation of how early exit penalty is calculated rather than the current approach, or flat.
The thing that is throwing everything off is the 75% penalty. If the penalty was 50% just like the early claim, the linear reward would make sense across all durations and exit intervals. But by creating a mismatched penalty multiplier, the realized penalty becomes mismatched as well.
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Correct, but if we match the penalty, we pretty much create a system where: a. commitment doesn’t matter, as you can break it anytime for the same penalty as if you were never committed, and b. you’re always better off making the greatest commitment of the year only to exit early after a month. Why lock for any other duration? Locking for the maximum and exiting after a month is better than locking for a month. Locking for the maximum and exiting after 2 months is better than locking for 2 months. The maximum lock will always benefit you with more revenue and voting power.
Well this gets back to the point a couple of people have made that ultimately having intermediate duration locks shorter than 1 year only complicates things. Getting rid of everything shorter than 1 year and allowing early exits doesn’t create any disparities since there’s only 1 lock and decay is linear.
Right. I was one of the people making that point since it indeed simplify things.
Now, looking at it from a person wanting to only lock for 3 months, I suspect it could be a giant pain to remember to come back and instant claim in 3 months vs simply indicating that at lock creation time.
If we allow shorter locks, I also see @Catalyst 's point of wanting to make sure people don’t game the system. In this model, breaking a lock should indeed incur a penalty (lock for 3 months and collect after 3 months should get you more DUST than lock for 1 year and break after 3 months)
Early exit penalties for breaking a commitment are the norm for nearly every financial product. I think we should absolutely penalize a user for breaking a lock early — maintaining the commitment is the point. We don’t need to disclose every permutation of an early exit penalty. The UI should just make it abundantly clear what the penalty is when the user is about to break the lock with an “are you sure about this” style warning. The formula can be in the docs, but a user at the time of lock creation just needs to know an early exit penalty exists and should primarily understand the mechanics of how much DUST they receive for each lock duration.
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I agree with this philosophy. The longer locks are getting veDUST revenue for the entire time their DUST is locked.
I personally am fine with the parameters set in your original RFC amendment. It captures everything I was concerned about and it will result in far more instant claims and far more 6-12 month locks.
The simplest solution is for the early exit penalty not to decay to zero. With a minimum penalty on every early exit, all of the design problems appear to disappear.
The claim clamp starts at 40% for a 28 day commitment and decreases linearly to 0% at the maximum lock duration. An infinite lock can claim 100%. The early exit penalty starts at 75% when the entire lock remains and decreases to a minimum of 25% just before maturity. It applies to the amount remaining after the claim clamp. The penalty never falls below 25% before maturity, and only reaches 0% once the lock has fully matured.
The key invariant is that a user who chooses a longer lock and exits after X days must always receive less DUST than a user who committed to exactly X days and completed that commitment. For periods shorter than 28 days, the comparison is against the instant claim, which returns 50%.
I modeled every whole day commitment from 28 to 364 days against every possible whole day early exit, covering 66,052 scenarios in total. There were zero invariant violations. Even the tightest case maintained a 5.01% margin in gross DUST. Voting power and revenue sharing are not included in this comparison, which further strengthens the case for keeping a nonzero minimum early exit penalty.
Make a copy and play.
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Nice !!! I think we have a winner. I am ready to vote on this.
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Winner lets vote whenever its feasible.
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