Encouraging more TINY Lock

[TinyGovernor]

Should we reduce lock time of TINY to 60 days for MAX TINY power to encourage more people locking?

Logic is simple - nothing helps liquidity on TINY more than the governance locks.

Someone buying TINY requires adding ALGO or USDC to the TINY pool at 100% ALGO to TINY Ratio.

For example if someone simply adds ALGO Liquidity - they retain 50% ALGO and 50% TINY. So they are only really committing 50% of their position to ALGO sided liquidity.

If someone buys TINY to lock up for Governance power - 100% of the ALGO goes to liquidity for TINY, as they did a 100% Algo for TINY swap.

This means 100% of their ALGO was added as liquidity for TINY, rather than the 50/50 split that happens when adding liquidity to a pool.

Logically it is a given, that nothing gives TINY more liquidity than the lock mechanism so this should be deeply encouraged.

The way this could happen fairly for all & be encouraged is:

1/ Any Governor who currently has a lock greater than 60 days, automatically reduces to 60 days unlocking.

2/ The TINY power reduction curve becomes more aggressive as it now has to drop over a 60 day, rather than 4 year period. Meaning if a Governor is inactive for 60 days - their TINY power reduces quicker and their ability to collect similar APY from the weekly claim whilst remaining idle - it essentially forces activity & punishes inactivity.

3/ Allow TINY to be locked daily to increase TINY Power & make TINY power count immediately from the moment it’s locked - this encourages people to come back to the platform daily to retain their maximum TINY voting power of the new max lock period of 60 days - the more often they come back, the more likely they are to interact with other features of TINY such as swaps which drive fees.

4/ Having 60 day unlock could entice way more TINY buyers, and if they then lock because the risk is lower than the 4 year lock risk it would greatly increase governance participation, but also increase locking, which means the 100% one sided liquidity provision that happens when someone outright buys a token, vs simply adding liquidity to a pool which results in a 50/50 split.

5/ The 9M Airdrop TINY gets added into Governance Rewards to increase it’s APY and encourage further locking.

6/ People who have refrained thus fur from locking TINY, due to reluctance of being locked up for 4 years will get encouraged to perhaps lock for the first time ever, greatly increasing our pool of forum participants, active governors, participation and hence the flywheel. Heck, there is probably a whole pool of buyers wanting to get TINY, that have not, because they do not have utility from it, unless they are willing to lock it for 4 years, which is a big ask for 90%+ crypto participants. We might end up greatly increasing liquidity and buy pressure.

Please discuss below your thoughts.

I think this is the lowest cost way to boost trading volumes, governance participation, TINY liquidity, TINY token trading/buy pressure itself, unique daily website visits etc. in on fell, easy to do swoop for the team.

[NerdyForDesign]

Of note 9M increase to Gov rewards isn’t going to move the needle on individuals rewards any.
Example: 44.23% of that 9M would just go to the top 10 govs.
67.19% would be concentrated among the top 20 gov.
and a whopping 76.36% would be sent just to the top 30 govs.
Some 82% to the top 40.

82% of the rewards increase to only 40 accounts out of 3,712 govs.

Further locking tiny does not increase liquidity any – if anything it decreases it, that’s the point of the lock after all: It removes the ability of tiny to be liquid and keeps it locked up and unable to be sold.

We currently have a proposal up to use some of those funds to hopefully drive use of Tiny in the ecosystem: Pilot Deployment of Idle TINY into Folks Finance - #2 by NerdyForDesign

And should it prove useful, that increase in earned Tiny can be used to move assets into other areas of our ecosystem as it builds up: say increasing depth of liquidity in tiny pairings that could help stabilize price like tiny/usdc to absorb selling pressure (something that significant depth in would imo go a long way to preserve price stability) (Maybe, this would depend on of course borrower demand making the earning worthwhile in the first place, and a gov vote to determine what to do with those earnings).

And there’s no doubt plenty of govs eyeing exiting at a loss of some 95-99% after years worth of lockups already and having VCs dumping on us daily since their lock-ups expired. The goal for us should be stabilizing Tiny price as much as possible between now and the end of the original 4-year tiny lock put in at launch to encourage the price to rocket once daily VC dumping is over so tiny can .

There is not a lot we can do individually as govs to help stem sell pressure of course, but a lot of us together can imo move the needle, for me that’s part of the beauty of decentralization. Lots of folks coming together to make something greater than they otherwise could.

An example: If just each tiny Gov committed to holding roughly $1,000 worth of share in the tiny/usdc LP long-term the pool size would be over 280x the depth it is now and make it by far the largest LP on tinyman @ $3.7M

[TinyGovernor]

You are severely underestimating the amount of reluctant buyers sidelined for TINY because of the 4 year max lock.

People who sell the bottom if the 60 day max unlock would take place - good riddance, they will be replaced by new buyers who see the long term value of a shift and would just drive additional trade volume as the TINY shifts hands.

60 day max unlock would generate much more activity on TINY trading because the TINY Governance is the utility unlock for the token.

If more people can unlock the utility because their risk curve or time horizon is not as long, then the buy pressure and trading volume on TINY would drastically spike.

It would be much healthier for price long term - you would see a big spike in the total number of locked TINY power over the long term in terms of total % max supply - hence why you would need the 9M increase to sustain the rewards.

As more people buy in and start locking the top Governors % will diminish.

This is easily provable, because the experiment is already done; L1’s with the shortest staking unlock periods have the highest stake % relative to their max suppply.

Cardano, SUI and SOL have the highest % staked - and they have no lockup period for Cardano, 1 day for SUI & 2-3 day for SOL.

In addition it is an excellent way to penalise inactive Governors, because the 60 day decay would bring the TINY rewards to 0 for them within 60 days; encouraging new and active participants to buy and step up as that would make the APY more dynamic and responsive.

Putting 1 Sided $1,000 worth of TINY into a liquidity pool is no solution to increase liquidity and long term value - we do not need more TINY sided liquidity - we need USDC & ALGO liquidity, and we can acquire that two ways:

1. Encourage more swaps & visits to the TINY website and trading - this collects real ALGO or USDC fees that are used to buy and burn TINY - adding sustainable USDC and ALGO constantly to liquidity - which my proposal encourages

2.Encourage more 1 sided USDC & ALGO only liquidity being added, which is exactly what happens when someone trades USDC for TINY in full or ALGO for TINY in full - which my proposal also encourages as it aims to increase the total TINY locked for Governance.

Both points add real sustainable value to TINY and it’s entire eco.

The $1,000 of TINY 1 sided liquidity to a pool just dilutes the existing USDC/ALGO Liquidity across more TINY and is a non-sustainable income form as it’s based on subsidised rewards; not real income revenue generation.

[NerdyForDesign]

@TinyGovernor

The $1,000 of TINY 1 sided liquidity to a pool just dilutes the existing USDC/ALGO Liquidity across more TINY and is a non-sustainable income form as it’s based on subsidised rewards; not real income revenue generation.

I never said anything about rewards. I said “If just each tiny Gov committed to holding roughly $1,000 worth of share in the tiny/usdc LP long-term the pool size would be over 280x the depth it is now and make it by far the largest LP on tinyman @ $3.7M”

We desperately need more TINY-sided liquidity. A strong-deep tiny/usdc pairing can help absorb excess sell pressure (like the VC dumping spree) and put a floor under Tiny price-action, and half the tiny added is going to be swapped for USDC anyway to keep the balance in the pool.

Tiny/gobtc is a boon when BTC is on a bull run, pulling excess Tiny from the market into the LP, an influx of Tiny pulled from circulation that most individual govs can’t match. In a reverse, tiny/usdc helps absorb sell pressure.

[TinyGovernor]

I disagree that we need TINY sided liquidity. We have plenty of TINY sided liquidity.

We need to focus on ALGO & USDC sided liquidity.

You mention the price needs to perform - the way price works is it’s a combination of TINY TO ALGO or TINY to USDC ratio in a pool.

For example if you had 1 USDC : 1 TINY in a pool, the price of 1 TINY would be $1.

If someone adds TINY sided liquidity only it becomes 1 USDC : 2 TINY dumping the price to 50c.

There’s plenty of TINY because every time a whale has sold, they extract ALGO or USDC from a pool and deposit TINY into it.

This is why the price is down - there’s way too much TINY relative to USDC or ALGO in the pools.

Which goes back to my initial suggestion as it is all about building more usage, sustainable revenue, trading fees, encouraging greater TINY buys/locks, governance participation and generating further USDC and ALGO sided liquidity to the TINY pools.

[NerdyForDesign]

@TinyGovernor

There’s plenty of TINY because every time a whale has sold, they extract ALGO or USDC from a pool and deposit TINY into it.

This is why the price is down - there’s way too much TINY relative to USDC or ALGO in the pools.

Where is this liquidity you speak of?

Because I’d hardly call that plenty.
38% of the pool has cycled through it in the past week vs 28% volume in the algo/usdc.

The price is down due to two reasons: not enough tiny in the ecosystem being used relative to new tiny being dumped into the market continually (via VCs). Not enough demand relative to supply. To little tiny being productively used, vs to much being dumped.

Yes we need more Tiny locked in governance. But we also need more Tiny being put to use in our ecosystem.

If for no other reason than technically we are far under the tiny/usdc LP requirements for inclusion in Folks Finance isolated lending markets.

I don’t think they’d kick us from it, because the lending market is pretty healthy and they surely get a decent cut of interest for the platform, and I know they have a governance account with tiny locked as well. However it would imo be far better to at least maintain the preferred minimum levels in the LP as insurance.

[TinyGovernor]

There is 7.25M TINY in that pool for example, with 6,494USDC to match you sent as a screenshot.

Add 1M TINY of your own as a test and see what happens in the USDC/TINY pool.

It will be 8.25M TINY and 6,494 USDC still if it was the only pool - there might a minimal variation to those numbers since it will aggregate across all other pools - but this would be the end result, roughly speaking.

If you were to sell your entire TINY stash now for example - and let’s say you had 1M TINY - that TINY/USDC pool would go up to 8.25M TINY in the pool from 7.25M if it were the only pool (to remove the aggregator effect and keep things simple).

Basically selling TINY and adding only 1 sided TINY liquidity is much of muchness. All the VCs who continuously dump are effectively forever adding TINY sided liquidity to the pools; why would we have so much focus on adding more TINY only liquidity and join the VCs in their dumping?

TINY isn’t the liquidity friend - USDC/ALGO/tALGO etc. is the liquidity - that is my whole point - you are too focused on getting more TINY into the liquidity pools - but TINY isn’t liquidity - liquidity is the underlying asset that backs TINY whether that be USDC or ALGO.

So my whole proposal and point is to get more USDC and ALGO into the pools not TINY.

My proposal will:

1/ Unlock much more new buyers that have a lower risk curve & shorter time horizon - this adds USDC, ALGO to the pool as they swap their ALGO & USDC for TINY in order to lock up for Governance and unlock the utility features of TINY.

2/ With the 60 day decay curve, it encourages more daily website visits and active governance participation, because you would need to lock daily to keep up your TINY Power - if you interact with Tinyman more often, you are more likely to trade too - driving sustainable fees up

3/ Encourages more trading - the more TINY shifts hands and the more it is dynamic the more trades will happen with it - that gives real USDC revenue that the team used to buy TINY and burn TINY. By burning TINY they basically burn the USDC used to purchase it into the liquidity pool forever.

[NerdyForDesign]

No mate thats not how LPs work.

If I add 1M Tiny to the LP, the pool will flip half of that to USDC and add it to the pool along with (now) 500k Tiny. That’s how it maintains a roughly 1:1 ratio.

If I add say: 172,712 Tiny to the tiny/USDC LP, half of it’s total value (In this case TV is $154.80 so $77.40 worth of Tiny is swapped for $77.40 (ish) worth of USDC.

Pre-Deposit:

Confirmation:

Post-Deposit:

Note the conformation page: I added 171,712 Tiny,
the pool ‘sold’ half of that, and “flipped” it for $76.77 worth of USDC, then BOTH are added to the LP. My original $154.80 is split, half of it sold and that amount of USDC is added to the pool along with my (now) $76.40 worth of USDC (due to some slight slippage).

Both the value of the total tiny locked and the total USDC locked are added to the pool’s asset balance, as half the total original deposited amount of the single-asset.

So the balance of the LP rises by $76.40 USDC and 86,563.10 Tiny.

That is from a test I did just now to post the screenshot to explain it.

So if you added 1M Tiny to the LP, the pool will flip half of it, and the tiny portion of the LP will only rise 500,000(ish), while the USDC portion will rise by the (rough) equivalent of 500,000 Tiny worth of USDC (currently $451).

[TinyGovernor]

That is because of the aggregation of other pools, which I explained to you.

As a total sum you have added nothing but TINY - it’s taking half the TINY and sold it via ALGO & tALGO and other pools which it aggregates from to switch in the form of USDC - but the total $ value liquidity of USDC/ALGO/tALGO - the underlying assets is identical.

You have added $0 net liquidity - you just sold TINY in at 50% (via aggregation of all pools & converted a portion of the ALGO/tALGO from other TINY pools into USDC to redirect to the TINY/USDC pool) and kept the other 50% in form of TINY.

Find a coin that has only one pool on Tinyman such as ALGO or USDC pooly only - a small pointless coin that only has one pool so it takes away the aggregator effect - so you can understand more clearly what I am explaining.

MINE is a good example I found as it only really has an ALGO pool.

If you buy some MINE, check the liquidity pool. It will shift and add ALGO to the pool and remove the MINE.

So you would have added real liquidity when you buy it.

However, when you add the 1 sided MINE liquidity - the ALGO will remain unchanged from the moment you purchased.

That’s because your adding 0 real liquidity - you are just adding back MINE.

For example if there’s 1,000 MINE:1,000 ALGO & you buy 200 MINE for 300ALGO - the pool would shift to something roughly 800 MINE:1,300ALGO.

The purchase adds the 300 ALGO Liquidity.

This is what my proposal achieves for TINY.

However, if you then add back the 200 MINE 1 sided liquidity only the liquidity stays 1,300 ALGO, all you would do is increase the MINE component from 800MINE to 1,000 MINE:1,300 ALGO.

In this example you clearly see adding MINE only to the pool does not increase actual liquidity - it would stay at 1,300 ALGO.

You can test and you will see what I mean - it is hard for you to see what I am explaning because your not understanding how aggregation works - you clearly think you are adding liquidity when you add 1 sided TINY but you are not - it’s because TINY has many pools it’s rebalancing all the pools based on their % of the total liquidity and the specific pool you added to.

The NET liquidity remains completely unchanged if you add 1 sided TINY only.

The same way you will notice in that MINE example if you test what I said.

Therefore it is critical to understand; TINY is not liquidity, so adding in TINY alone cannot generate further liquidity.

TINY is just the coin that is the key that unlocks a claim on the liquidity & the liquidity is the underlying assets backing TINY - which is mainly USDC, tALGO & ALGO.

If you test the mine example you will see exactly what I am explaining, it was the point you bought MINE where you added the liquidity & increased the ALGO portion in that pool - when you add back the MINE, you achieved nothing other than lowering MINE price, the actual liquidity (i.e. ALGO) remained identical.

This is exactly what my proposal will tackle and improve - it will drive real liquidity, more buying activity, more swaps that create sustainable fees that allow the team to buy and burn more TINY via USDC adding real net liquidity to TINY.

Try what I am explaining & you will see I am 100% right.