This proposal raises the fork threshold to 30% (from 10%) and returns the fork period to 7 days (from 3.5 days).
We lowered the fork threshold from 20% to 10% back in Prop 384. The intentions back then was to:
Now, a month and a half later, we've mostly cleared those intentions:
Now that we don't really need to worry about (for the time being) fundamentally misaligned long-time nouners being stuck in the DAO, we're in a position of mostly just dealing with arbitrageurs.
I wouldn't be a proponent of raising the fork threshold if that meant arbitraguers would just accumulate more Nouns for longer, but given that the BV is now already lower, arb modelling by the Verbs team is showing that if we raise the fork threshold to 30% the expected BV at next fork would be in the low-10 ETH range, which means that if the true market clearing price is above that then we should start seeing real buyers outbid the arbitrageurs immediately.
We could just wait out a few more months for BV to naturally lower and the problem to resolve itself, but the benefits of adding new DAO members and getting true price discovery sooner in my opinion outweighs the governance overhead of adjusting the fork threshold and thus I propose we raise the fork threshold to 30% now.
This proposal raises the fork threshold to 30% (from 10%) and returns the fork period to 7 days (from 3.5 days).
We lowered the fork threshold from 20% to 10% back in Prop 384. The intentions back then was to:
Now, a month and a half later, we've mostly cleared those intentions:
Now that we don't really need to worry about (for the time being) fundamentally misaligned long-time nouners being stuck in the DAO, we're in a position of mostly just dealing with arbitrageurs.
I wouldn't be a proponent of raising the fork threshold if that meant arbitraguers would just accumulate more Nouns for longer, but given that the BV is now already lower, arb modelling by the Verbs team is showing that if we raise the fork threshold to 30% the expected BV at next fork would be in the low-10 ETH range, which means that if the true market clearing price is above that then we should start seeing real buyers outbid the arbitrageurs immediately.
We could just wait out a few more months for BV to naturally lower and the problem to resolve itself, but the benefits of adding new DAO members and getting true price discovery sooner in my opinion outweighs the governance overhead of adjusting the fork threshold and thus I propose we raise the fork threshold to 30% now.