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grzracz / OrangeApp

Orange App for mining Orange
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ORA Extension #2

Open bitciphr opened 9 months ago

bitciphr commented 9 months ago

I've been considering an idea where we could use the proceeds from mining to enhance a dynamic AMM pool. This would, in turn, influence the market price of ORA, and potentially affect liquidity pool (LP) and staking rewards as well - driving incentives on multiple dimensions.

e.g. In one scenario: more miners, more effort expended, more ALGO per ORA burnt: the impact should be the increase of the price of ORA via the mechanic of the contract buying up ORA from the LP pool (using the mining proceeds) and then sending the ORA to a burn address (or distributing as staking rewards + lock-up period).

Although I haven't fully explored every possible scenario, I believe this concept could significantly enhance the ORA experiment and utility.

grzracz commented 9 months ago

There are no "proceeds from mining". All ALGOs burned go towards the fee sink. An Algorand consensus upgrade is required to decide what to do with fees.

bitciphr commented 9 months ago

I see. Maybe we need ORA part 2. Use ORA to squeeze (burn) into JUC (ORA Juice), and use JUC embedded logic to drive AMM pool, staking and ORA price.

grzracz commented 9 months ago

That is an interesting concept. Perhaps something like this could indeed be done, but it becomes then very close to a potential death spiral.

bitciphr commented 9 months ago

Death spirals can be avoided in most circular token dynamics by seeking to increase the scarcity of ALL the tokens in play at every step, usually via burning mechanics. Just spit balling, and I have not fully considered the dynamics, but back of the envelope approach:

(Edit: updated image with (1) some conditionals - assume B + C is accrued value and not at t=0 otherwise can be arb'd, and (2) ferminator loopback to LP)

image

bitciphr commented 9 months ago

Dev incentive fee should be included. No reason to be an altruist in this space.