BadgerDAO x UMA: Rebase Mining & KPI Options Phase II+
In partnership with UMA, BadgerDAO will be extending the Rebase Mining event in perpetuity beginning on July 1st, with adapted drop criteria to incentivize buyers and holders over time. The following article details the specifics of the ongoing rebase event and how to participate and earn more DIGG.
What Happened During Phase I??
The initial event was a one-time event launched on May 13th and failed to unlock any rewards during the 30 days for a few reasons. Despite >2 weeks of positive rebases leading up to the event, it failed to overcome the market down-turn kicked off in May. Our hypothesis is that a lack of incentives to buyers & HODLrs during the rebase mining event contributed to it being unable to overcome this market pressure.
So What Next?
BadgerDAO remains committed to the initial strategy and belief that KPI options harness the power of out-of-protocol incentives to align interests and incentivize behaviour. That said, there were some takeaways that we quickly realized could be implemented during a re-launch to ensure a successful outcome regardless of market conditions.
By adapting 2 areas of the current rebase mining event, without altering the fundamentals of how to unlock rewards, incentives can be aligned to drive sustained momentum each month through continued buying and holding by participants.
Our hypothesis was further strengthened when reviewing buy/sell behavior through the event as >85% of wallets held 100% of their position bDIGG and in many increased positions.
Phase II+ Changes
As mentioned, the fundamentals of rebase mining have not changed. To unlock funds within the 30 day mining event, more than 5 positive rebases must have occurred, and each rebase that occurs afterwards increases the percentage of the pool to be paid out more than the last one.
For more information on how out-of-protocol incentives like rebase mining work, please refer to this excellent article that details specifics of each 30-day event and how users can unlock DIGG rewards through KPI options.
Rebase Mining Phase II+ will launch on July 1st in perpetuity and will include the below changes to ensure sustained momentum month over month.
- Continue to roll over redemption pool funds month over month.
Going forward any unused funds would immediately carryover into the subsequent 30 day period and start a new mining event, where the same 5 positive rebases are required to unlock funds. This will continue in perpetuity until all funds are exhausted.
Restarting rebase mining every 30 days mitigates 1-time market disruptions as options holders have the ability to roll-over options to the subsequent event, and even increase their options to earn more DIGG rewards once unlocked.
Furthermore, by running the event in perpetuity it allowed the distribution of options to be adapted to focus on holding and buying behaviour during the event.
2. Split out KPI options distribution into 2 snapshots to align incentives during the event.
Snapshot #1: Re-allocate 60% of options at the start of each event based on behaviours in the preceding event; incentivizing holding by increasing options of holders through use of a multiple. This re-allocation has no bearing on preceding events options distribution, but will inform options received at the start of each new event as follows:
- Wallets that HODL, increase and/or sell <25% of their bDIGG position in the preceding event will carry over 100% of options with multiple applied
- Wallets that sell <100% & >25% of their bDIGG position in the preceding event will carry over options weighted accordingly, with no multiple applied
- Wallets that sell 100% of their bDIGG position receive no options in new event
Snapshot #2: Allocate 35% of options to buying behaviour DURING the event; these options will be based on a snapshot that occurs during the event and based on increase in bDIGG balance. To level the playing field, we are applying a root calculation to new purchases of bDIGG that normalizes options distribution.
Examples
Re-allocating options every 30 days to wallets continually buying and holding bDIGG aligns behaviours with DIGG rewards and increases the chances of unlocking rewards. Since rebase mining is no longer a 1-time event, users are given an opportunity to accumulate options event to event and increase their % of DIGG rewards.
The below illustrations show how different buying behaviour can impact current events and subsequent event through use of a multiple (example 1.3)
Example #1: Alex-the-Accumulator. Alex loves DIGG. At the end of KPI Options Round 1, he owned 1 bDIGG and decides to add another 0.5 bDIGG during Round 2.
Result: The initial 1 bDIGG held in Alex’s wallet receives the multiplier and increases his options from 400 to 520. This is added to the additional 0.5 bDIGG’s worth of options from the Root Calc method (200 options). This brings Alex’s total to 720 options in current event, and eligible for multiple on entire position in subsequent round.
Example #2: Barry the Buyer. Barry just heard about DIGG and decided to ape in during Round 2. He buys 1 bDIGG and stakes in the sett.
Result: Barry receives 1 bDIGG worth of options from the Root Calc method and receives 400 options in current event, and eligible for multiple on entire position in subsequent round.
Example #3: Don the Dumper. Don owned 1 bDIGG but got cold feet when the market nuked in June. A few days into Round 1 he sells all his bDIGG.
Result: Don’s options are re-allocated to Alex and Barry in subsequent rounds through use of multiple; but retains options allocated to him in Round 1.
Example #4: Harry the HODLr. Harry bought 0.5 bDIGG in Round 1 and received 200 options, which he forgot about; allowing his options to increase each event through the use of the multiple.
Result: Harry’s 200 options from the first event have the multiple applied 4 times and grown to 760 options.
Drop Details
60% of options will be distributed to holders from preceding event with snapshots taken on May 13th through July 1st, which is the start of the next 30-day mining event.
- Going forward this comparison snapshot will be every 30 days and taken at the start of each rebase event. Effectively re-allocating KPI options to holders through the use of a multiple that is subject to change based on holding behaviour of preceding event.
35% of options will be distributed to buyers of bDIGG during the event and based on a snapshot taken on at the mid-way point of each 30 day event.
- A root will be applied to new purchases of bDIGG to ensure smaller purchases receive worthwhile benefits as well.
5% of options will be deployed at the teams discretion leading up to and during the campaign to drive and reward behaviour supportive of DIGG
Similar to the last event the following bDIGG holders are still eligible for KPI options:
· bDIGG holders (on Ethereum and BSC)
· DIGG/wBTC uni and sushi stakers
· bDIGG/wBTC stakers (on BSC)
For more information join the DIGG Dojo at noon EST (4pm UTC) every Tuesday and/or check out https://digg.finance/ to follow DIGG rebases and events updates.
How Do I Learn More?
There are many ways to engage the Badger DAO community and educate yourself on the use of our protocol.
