$GEAR Transferability

Discussion for when $GEAR tokens should be transferable.

Interested to know what are your thoughts.

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Not too worried about it right now. More concerned with getting the project off the ground.

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Some considerations

  1. The DAO cannot pay contributors until $gear is transferrable (ie, sooner better)
  2. When gear is transferrable, there will be a few types of participants:
    1. Those that missed out on the DAO launch and want to purchase their first $gear
    2. Those that got an initial allocation but want more
    3. Those that want to dump their initial allocation
      ->If we enable transfers too early or when there is little interest from the market, then whoever provides initial liquidity (DAO or holders) will just get dumped on by group 3. This could also present the opportunity for a large whale to purchase a large stake in GearBox, which may not be desirable.
  3. We also don’t want to enable transfers until discord users have gotten their allocations IMO

The healthiest time to release IMO is a little bit after product launch and shorty after discord launch - if we launch the project, see the hype continue to build, then we can capitalize on the attention of folks that missed out on the initial allocation AND grab new attention. This means users that wish to dump can do so at a time when there should be enough new entrants to absorb the impact, and the DAO can start paying people officially.

The primary argument against this is if we want more time to iron out more complex tokenomics. That is a discussion that has started that we can talk about on a community call next week IMO.

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Correction @mikael - the DAO can pay if the tech multisig gives it rights to have GEAR transferable, correct? So in that case people can receive LM and contributor rewards even if GEAR is not moveable. I think this is the case technically, this is how Credit Accunt Mining was able to work despite non-transferability @ov3rkoalafied

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Good job, @ivangbi !

Let me tell some details about how DAO could pay without making tokens transferable if this option is needed. GearToken contract has two roles: manager and miner.

Both of them are allowed to transfer tokens if it’s not transferable yet. Manager is controlled by technical multisig and this role could choose miners and also could allow tokens to be transferable.

If DAO would vote to allow itself to pay tokens, we can set Financial multisig as a miner, and it would be able to send tokens for grants etc.

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Seems fantastic for me. I like $RBN model when token stays untransferable for a several months while protocol will get adoption and working tokenomics

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waiting several months before any token is traded isn’t something that would be preferable as hype/interest would die down massively and people will move on to other projects

imo we should make miners tokens transferable first within 1-2 weeks after successful launch, as they paid eth for it. they wouldn’t dump it below a base price of what they paid in gas

allow 2-4 weeks of trading and distribution to new investors who want to jump in meanwhile we should come up with a good econ for gear holders

then we can make it transferable for other testers/discord users who got it for free and more susceptible of dumping at any price but they wouldn’t dump as much if we have good econ

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good project!Achieve higher composability and efficiency of Defi.
I think Christmas is the perfect time.

The right thing to do is to discuss the right economic model as early as possible, to make it profitable for the holders, to prevent mass selling, and at the same time to go online as early as possible, to make it available to interested parties and institutions, and not to go below the cost of gas early on, don’t worry about that. Focus on getting everyone involved, especially the large DEFI protocol, etc. After all, this project is Dao

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Just wanted to say that I appreciate the level of detail and dedication you put into your posts. To someone like me who is relatively new to DeFi, your explanations provide a lot of clarity.

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Ah good to know, thanks! This does make it more possible to pay contributors, but there would need to be an agreed upon “value” of $gear (maybe base it on what people paid for credit mining).

@ilgiz @pawijax974 it’s perfectly acceptable to let hype die down if that gives us a few months to build the tokenomics and protocol into something that generates even MORE hype.

The main things I’m balancing are:

  1. IF we don’t make $gear tradable for a longer period of time, then there may be a lot of people who want to buy gear and get involved that don’t - not great. We want people to feel included and get involved, and disallowing gear purchases doesn’t accomplish that.
  2. If we make $gear tradeable right now, but it takes us 3 months to figure out the tokenomics, then we are gonna end up with 3 months of bleeding and dumping, and potentially giving whales a chance to play accumulation games. Also not great.

So I think we need to jump on that community call next week, keep riffing on tokenomics ideas in the meantime, and see if any ideas start to emerge as front runners. If we have a clear path, then that gives holders an idea of what they actually own/bought, which makes it safer to enable transfers.

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Echoing some posts in this thread and adding some other considerations:

Points against making GEAR transferrable immediately:

  • We currently don’t have a plan for sourcing initial liquidity.
  • Exposing to whales early on leaves the entire project vulnerable. Community has more voting power than initial contributors and so whale accumulation on the open market could destroy DAO legitimacy and hurt the protocol’s long-term prospects.
  • It is unfair for early discord members and testers. They contributed earlier than most yet are punished and forced to wait under this scheme. They already couldn’t vote for first GIPs.

Points for making GEAR transferrable immediately:

  • There is clearly interest from both current GEAR holders and outside parties in a quick token launch. Waiting a long time may dampen interest from outside parties and the spirits of current GEAR holders.

A possible compromise?

  • Come up with a specific plan for how initial liquidity will be sourced. Liquidity Mining program? Use of “Defi 2.0” protocols? (Olympus Pro?, Tokemak?, Ondo?, others?)
  • Make sure early discord members and testers are treated fairly by distributing tokens to them before making GEAR transferrable.
  • Hash out tokenomics for ~2-4 weeks post launch. Make GEAR transferrable directly after that to satisfy current GEAR holders and outside parties.

Some remaining questions:

  • Will we be able to figure out optimal tokenomics in ~2-4 weeks? It can be quite complicated and as we’ve seen many projects have launched with likely suboptimal tokenomics which hurt holders in the long run. This point also leans me towards a model that has the possibility of being updated over time rather than needing to get everything 100% right on the first try.
  • (Mostly food for thought.) What timeframe are we optimizing for? Should we even care about short term speculators? How do we optimally protect against DAO capture and boost token price?
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Imo, we should distribute all “movable” tokens first, i.e. to finalize airdrops to testers, discorders, etc.
Otherwise, those ppl will stay excluded from voting, mining, trading, etc.
“Movability” is important for traders, primarily.
Disclaimer: i’m one of the affected.

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Agree. Let’s discuss it on the next community call. btw it would be great to keep somewhere agenda for the next call - what’s the best way to do it?

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You could keep it on a forum post or google drive document, create an “event” for the call, and link to the agenda there. Make an announcement with the link as well.

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This is very important discussion as the initial momentum is key to a good launch.If there are any incentive or privilege given to holders , then making the tokens transferable to both miners and discord commuity would be no issue… vesting would cost to claim everytime and vested airdrop would cost to DAO in distribution. so make it transferable and announe incentive for holders.

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The protocol is not even live yet. These airdrop spam flood just pollutes forum. But still, you are within the hard rules, so no moderation will be applied (unless everyone asks for it).

Participate in the product launch, contribute to gear-econ discord channel, jump on contributor calls. The “ser we need token liquid and yes give rewards” is not something I will personally want to discuss.

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I am no rush, the general market has a very negative sentiment at the moment, if we open up transferability and the price tanks, it becomes a ball and chain that the protocol has to carry for ever, taking the time and getting it right is far more important.

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The transferability should imho depend on a bigger product vision, not just due to market. There needs to be some product feedback loop to decide on something more tentative. There is a very product discussion in Discord gear-econ channel going on, feel free to join there. Gearbox Protocol

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Hi there, this desition is quite tricky, on one hand, as you says , people may loose interest in the project in case tokens are nontransferable, and on the other, nobody wants the project to dump.
But maybe is better to have interested token holders than dumpsters

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