Possible solution to decreasing rebate rewards

For some time now I have been thinking what the best solution would be to the decreasing rebate rewards, because it is a complaint from the community brought up most often.

Everybody has a different portfolio, and Tranchess is very good for those that want to have several DeFi options, shrimps and whales alike. However, since the launch of the platform we have seen a (slow) decrease in rebate rewards, and especially with the drop from 75% to 50%.

Agreed, the 25% drop was something we all knew was coming, and if less people use the platform, then rebate rewards are going to be lower. But we all want the platform to grow, so this includes TVL and the price of CHESS. If people are no longer incentivized to lock their CHESS, then once it is unlocked, they will sell it.

I doubt the best solution to this problem is to simply increase the reward %. This would only create a temporary satisfaction without linear growth. That is why I like to raise the following proposal, and see what you, the readers, think about it;

What if the rebate rewards, currently at 50%, were raised 5% with each 4 weeks, until we reach the 75% again? To me this seems a lot better than immediately increasing the %, and should create an upward spiral for CHESS lockers.

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Interesting suggestion, though a time frame of 4 weeks might be too short. How about 10 weeks?

Will it be applied to past locked dates? I mean, if a CHESS locker started 4 months ago, will the APY balance will be carried forward to the current date? Which also includes rebates that have been adjusted and need to be paid back to lockers. I think doing so will increase investor loyalty for sure, and increase more commitment to the platform, plus with an upward APY spiral, it’s a utopia!

That would be possible, however, that is not the intention of my proposal.
If we want to appeal to a new audience whilst satisfying the current lockers, I think it would be fair to simply raise the rebate rewards for everybody by 5% every X weeks (until 75% is reached). No exceptions.

There are probably better/different ways to reward long term CHESS lockers and those staking Q/B/R.
This can take on many forms such as; increasing APY, merch or even NFTs. (just from the top of my head)

Perhaps 4 weeks is a bit short, but it also opens up the ability to post new social media content every 4 weeks. Advertising the increased % of rebates which keeps sparking people’s attention. 10 weeks might be a too long time frame for them to keep interested since it would take 50 weeks, nearly a year, to get back to the previous 75%. 6 weeks might be a good middle ground? That way, Tranchess could bring out a new Twitter post every 6 weeks regarding the % increase, and continuously drawing in new troopers.

Let’s put these to a vote and include the options to vote on the increase schedule

Another way to increase the CHESS price and value would be to include a portion of the validator awards being shared amongst veChess holders.

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Agreed with the overall structure - something like that could work well.

I’m unsure how much $ the Tranchess core team currently burns/is expecting to burn, but the treasury is worth ~$67.5m at this time (assuming nothing has been used which I’m not sure if true). If the team can dig into the treasury a little bit (if necessary) for expenses and increase distribution to chess stakers, we’ll likely see increased growth in chess stakers.

But the bigger problem is rewards will continue to go down if no TVL is added because more chess gets constantly unlocked. The real way to fix chess rebates is getting more whales onboarded to boost TVL.

Some thoughts/catalysts there:

  • Tranchess doing their next round of investment. If they get new funds to invest who own lots of BTC then the funds will be incentivized to add their BTC to Tranchess.
  • Introductions of new funds - especially those that don’t rely solely on chess rewards for yield (like BNB fund) – will help significantly.
  • Introduction of ‘escrowed chess’. Tranchess could create a new variation of chess that’s locked for 1 year & give that out at a higher reward rate. For example, if you deposit > 100 btc, you get rewarded the normal chess amount + a 10% bonus APY in escrowed chess. Exact mechanics would need to be thought about more in depth - but it could help onboard a lot of new TVL while not immediately causing sell pressure on Chess.
  • How to make the chess token worth more? If the price of chess is worth more, the APY for btc/eth funds are higher. A few ways to maybe accomplish this – 1) make the boost require even more chess locked for stakers 2) enable longer than 6 month locking for chess 3) under a specific chess price, the treasury buys & stakes {x} amount of chess - this should be ok because chess is still getting rebates in btc/eth so hopefully it would actually grow the treasury 4) partnership with binance where chess stakers get discount on trading fees :wink:

I’m sure the team has also thought a lot about this and have some ideas up their sleeves.

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Another option could be increasing it by 1 percentage point per week from 50 to 75. Taking slightly longer than the original proposal and having the desired linear effect.

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Good idea. I like where this is going!

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Thank you for your reply and sharing your thoughts on this topic. You gave me some food for thought!

Totally agree that the addition of new funds will likely increase TVL, and like you said, especially those that don’t rely on CHESS rewards for yield. We do know more funds and cross-chain are on the agenda.
Your suggestion of increasing the required CHESS to achieve boost is a good idea. Sometimes it feels there are two parties divided, between those that stake Q/B/R and those locking CHESS. Increasing the required CHESS for a boost should bring them closer together.
And, I believe the option to lock CHESS for a longer period is on it’s way soon…

I share your curiosity when it comes to the treasury and what the team has planned for this.

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We should 100% put this to a vote. Making CHESS staking as attractive as possible is what is going to push Tranchess up the MC list… not QUEEN or ROOK.

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Agree,
CHESS should be the face of Tranchess. B/Q/R their products.

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The APY on CHESS right now is really bad. You can see that it is not going to be attractive to potential new investors, especially with the high emission at the current time. Something has to be done. There should be a vote on bumping the rebates back up to 75% permanently.

Another possibility is to scale rebate % with the length of lock - this would allow the team to reduce rebates for shorter lockers (and thus keep treasury healthy) while also incentivizing and rewarding longer lockers. Potentially we can look at a spread like 40-60%? What does the community think?

In a way this is already the case. Higher lock duration = more veCHESS = higher rebate.
To be honest, I think it is quite clear what the community wants. :wink:

Edit:
and we are losing members debating it. :sweat_smile: