[RFC] Change Weekly Pickle Emission

I and others have noticed that it appears basic supply and demand is keeping Pickle price down. I have tracked weekly price versus emissions and there is a strong correlation I see using my assumptions. The main assumption is buy volume which is somewhat difficult to extrapolate for a week. We can look at trading volume but that is not a good indicator of demand. Based on the current weekly emission (starting 10/23) we emit(ed) 41,850 Pickles. Assuming $600,000 of buy side pressure, we can calculate a fair market price of $14.33/ Pickle; which is roughly where we are now. This approximation has been on point for the last month. Now, this doesn’t factor in external buy and sell pressure. I have a spreadsheet with this calculations if anyone would like to see. But my main point is that at the current rate, Pickle will probably not be above $50 until sometime next year (barring any significant buy side pressure). Some may say the cap and reward PIP will be the buy side pressure. I highly doubt it, but we will see. I suggest a 20% reduction in emissions per week instead of 10%. Using that model and assuming at least $500,000 of buy side pressure each week, we should be above $50 before the end of the year. Assuming nothing catastrophic happens. What are your thoughts? Below is a plot of the data.


Ooh a chart, you got my attention! I like your thinking but the whole point of Pickle and the advantage it has over YFI is that it is a reward token. There needs to be a balance between emission/rewards, pickle price and demand for the platform. I’d argue that there are many other things that will affect the token price more than emission, in particular successful strategies - that will likely rely on a Pickle based reward boost.

I personally think the emission is something we can let be. It has no significant flaws and is way better than most.

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Thanks! I think a 20% emission reduction still allows Pickle to be a reward token. I am not proposing an end to emissions. Just a faster approach to get to the endpoint of ~300 Pickles per week. Currently we risk losing investors who are tired of waiting for Pickle to move as it languishes in this range for another X number months. If there is too much supply in weekly emissions and nobody wants Pickle then the price stays the same or drops which makes strats useless and APY less. My estimates are based on volume that may be more or less depending on circumstances.

Ironically we have copied most of Yearn’s project except for the thing that made Yearn, which is the low supply.

I’d argue that there are many other things that will affect the token price more than emission, in particular successful strategies - that will likely rely on a Pickle based reward boost.

I’m not so sure about this. We have/had multiple strats introduced. The most price action was seen from having a lower initial total supply. Now that we have reached close to the full supply (>75%), the price will probably stay in a tighter range barring significant news. PIP15 doesn’t appear to have done much so far.

Also, the points on the graph represent 1 week. So it is only up March where the 20% emission reduction would end with ~386 Pickle per week.

I hate to say it but even though your chart is well-thought and your explanation is well-intentioned, it is missing the point of PICKLE as a non-commodity. We need rewards to keep liquidity in the system. Once we strongly connect the fees collected from the system with all the holders of the governance token ( right now we have staking vs farming as ways to earn from holding the token ) then we can buy-side pressure to come for reasons other than demand vs. supply like the P/E and the DCF of the token.

There’s no point to PICKLE as a commodity, BTC is immensely more liquid and accessible.

If by investors we mean buyers of PICKLE in the secondary market, we can attract them as fundamentals improve. For that, we need is customers i.e. people using the protocol, and producers i.e. people injecting liquidity while we bootstrap our revenue model.

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Although I very much wish for PICKLE to appreciate in value and @pipickle proposal might get us there sooner I don’t think is a good idea to make changes in protocol parameters(especially for the emision schedule) just with the sole purpose to increase PICKLE price. By doing this often we are transmitting a message of uncertainty which is both bad for current and future investors. We will get to the same emission rate eventually, we just need a little bit more patience and to not focus so much on the short term price increase.

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I don’t think people understand that rewards increase when price increases. Additionally PIP5 changed the monetary policy a week into the protocol. A 10% reduction was chosen but fundamentally it does not make sense. If the argument is Pickle is not a commodity but simply a reward token then why would anyone choose it over YFI, FARM, or 10000 other tokens? Again at this rate we run the risk of attracting less capital with price stagnation.

I’ve been with Pickle since the beginning and actually traded BTC for it (bad move apparently) so I don’t think this is correct. Pickle is just as accessible. The pros I saw with Pickle was the higher return and lower supply. However, PIP5 has seen the Pickle enter a down trend because demand does not exceed weekly supply.

I think the last month has been a test for this model and it has failed. FARM was destroying us prior to the hack. Their tokenomics worked to drive price because their circulating supply currently is ~200k while their fully supply will be distributed over 4 years and cap at 600k. Lastly they are already at 20k per week emissions and they have a buyback policy. I am not saying their model is the best but it shows exactly what I am talking about. It all comes down to supply and demand.

I disagree. That is the purpose of PIPs, no? To make changes to improve Pickle but also drive price.

Are you saying PICKLE is a commodity? Otherwise, it is hard to understand what you are getting at. You’re kind of dancing on the edges of something but not quite saying much except we should reduce the emissions. When challenged, you are not engaging in any other defense of your point, just dismissing things out of hand and repeating your proposal.

Please don’t take things personal. That you traded BTC for PICKLE doesn’t mean it suddenly acquires the commodity properties of BTC. Farmers exchange potatoes for cash, put that in the stock market. Doesn’t mean potatoes are stocks.

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I am not saying Pickle is a commodity. BTC is not a commodity either. I am not saying anything is a commodity. Pickle is a token, much like BTC, that gets rewards. I don’t see what Pickle or BTC being a commodity has to do with anything really which is probably why I am “dancing around” your point. Please elaborate.

If your point is that supply and demand only applies to commodities then you are incorrect.

Also, I am not saying a 20% reduction is perfect, but do people not see that going from an emission halving to a 10% reduction per block was drastic?

Happily. A governance token, much like a stock, derives intrinsic value from its equity-like properties: granting economic rights to holders, which we exercise by voting. When a protocol makes fees, like FARM, and redirects those fees back to tokenholders (like with the FARM staking contract, albeit we are proposing an even better mechanism – see Smart Treasury discussion), the value cycle is realized. Many rational actors will consider this value cycle when making a decision on the price of the token. This is the road, IMHO, we can steer the protocol to go.

Since BTC generates no cash, we are limited to estimating its demand, comparing it with supply, and trying to predict the price. Like a lot of gold buyers, we buy it not to use it but to sell it down the road to someone who’ll pay more for it. Some call this utility store of value. Commodity traders do this. The whole Crypto market up to the point of DeFi was dominated by this commodity trading mindset.

Nowhere did I say this. Kind of a strawman.

I am not sure what people think. But, the PIP wasn’t really to change a halving for 10%. The halving was due to stop on Week 4. We would have had 1 PICKLE per block emissions until Week 52. Personally, as a farmer (also since Week 1 for those curious), I am paid in PICKLE, I wasn’t concerned at all. I’d made a killing already, and by the time the PIP was passed was playing with house money. But, there’s a lot of holders out there who think these things have profound effects. In fact, the price has gone down steadily. All I see is my APY slashing instead of being on a smooth ride down. You pointed yEarn but the YFI token is –73.1% since ATH and has yet to bottom-out.

If I had to speculate on a reason it’s because holding YFI itself gives you pretty poor returns (cash-on-cash). FARM was wrecking them too. FARM actually charged a decent fee, performance-based, and people paid it because they thought they’d be better off in the long-run. And, if it wasn’t for the hack, they’d probably be.

If I take your proposal ad extremis then we freeze all emissions. We’d then expect the price to go up substantially, no? But, what about our collapsing liquidity? What about our rewards? Will our devs be happier? We’d lose the ‘emissions’ mechanism too.

I would be more likely to believe we have a sort of perpetual motion machine that needs constant high emissions than better-off without these dynamics.

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Stocks are also subject to supply and demand. There are stocks that do not reward holders in dividends but rather see growth (AMZN, FB, GOOGL etc.) I actually like the smart treasury idea and think that should be done way sooner than PIP15 but it is what it is.

Yes I know PIP5 established the monetary policy. The point is, based on the last month, 10% appears to be too low. Whether you have made a “killing” really depends on your entry point and time so just because you are doing well doesn’t mean others are. I pointed out Yearn because we are copying things from them except the tokenomics. It’s a bit disingenuous to point at YFI being down 73.1 from ATH when Pickle is ~79% down from ATH

NO! A freeze would not work. You still need to emit Pickle! It’s like mining BTC. If mining stops, that destroys the supply. Be serious here, decreasing by 20% instead of 10% is not the same as suggesting a freeze of emissions.

I am so happy to have you here @leekuanjew.

Cutting emissions will do nothing good and we need the emissions to subsidize our liquidity and TVL.
I think that we have pretty sound tokennomics and overall protocol design.

Re: Farm comparison
Comparing Protocols in Crypto is always a hard sell for me, because so much is narrative driven with early token speculation. So while your analysis might be right, a lot of that is also driven by narrative and people chasing the next big thing, it wasn’t purely due to their token design.

I think a better vector to increase the value of our token ecosystem is to be found in implementing a smart treasury approach or changing other parameters of the protocol.

@pipickle it’s always good to provide as much information as possible and be as transparent as possible IMO, so attaching a google sheet with your data from the start instead of making people ask for it would have been an improvement for this proposal.

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I’m not sure how I can explain it better. If the price of Pickle increases, the APY for all Pickle emission reliant things increases (not staking). If APY increases, TVL increases.

I did not say it was purely from their token design. Definitely speculation is part of it as I have mentioned before, demand can vary. Look at the numbers I provided based on their website. Pickle has more circulating supply, more emissions per week and lower price. This isn’t a mere coincidence.

I’d rather not attach a Google sheet as that can open up my PII to the masses. A simple message from interested parties is a much better approach. Are you having trouble interpreting the graph?

I don’t get why we are so attached to the current emission rate? Can anyone explain why 10% is better than any other percentage?

You do have a point here, there probably is not really a specific reason for this, but same could be said for your 20%.
Right now the system is working as intended, if we cut emissions we risk this stability.

Well my specific reason is based on the data I have shown. I’m not a huge fan of the “if it ain’t broke don’t fix it mindset”. Based on PIP5, 10% appears to be based on SNX’s model but the percentage is different than SNX. I’m not saying 20% is ideal either but again, I have run the numbers and it looks like it would strike the balance between still giving yield farms a good return but also decreasing the amount of Pickle flooding the market each week. I have also thought of a halving based emission percentage for X number of weeks. For instance, 25% reduction from the previous week for X number of weeks, followed by 12.5% for X number of weeks, 6.25% for X number of weeks until the ~300 Pickle/week emission rate is achieved but that seems more complicated. It would great to hear from the Devs as far as how 10% was decided upon.

I totally agree with this. Maybe I am old-school coming from a non DEFI space, but for me it is bad practice to change tokenomics at all, nevermind every second month. If people are looking to buy for the longer term rather than just a pump and dump, then they want to know the situation for the longer term - emission, total supply. Messing with the tokenomics just to try and drive the price up is a bad reason. Look at Cream and their mega burn … made their price pump 5x … now it’s 0.5x where it was before.

C.R.E.A.M had other issues as well so putting their drop on a token burn is not accurate. Also it is down ~88% from ATH while Pickle (with supposedly good tokenomics) is down 79% from ATH. I would not call that a win. I still would like to hear how a 10% reduction in emissions is better than any other percentage or how 10% was decided upon. @BigBrainBriner

BUMP on this topic as it does not seem like the effects of the current decisions (PIPs) have led to improved Pickle performance. I think we are squandering our opportunity to actually attract investors/stakers since PIP15’s excess rewards will end soon. If we significantly reduce weekly emissions then either outcome (price increase or decrease of Pickle) will be ok. An increase will obviously be good for farms while a price decrease will increase staking APY which should increase demand. Given that it’s been a month since I suggested a 20% decrease we may need to be a bit more drastic such as doing another halving then returning to a 10% reduction. The major benefit of reducing emissions per week is that we can extend our ability to emit until we reach the ~1.3 million supply (soft cap). Still waiting to hear from devs on this.