To enhance Omm's token economics tokenomics and give OMM more utility, the early contributors have been working on Boosted OMM (bOMM), which incentivises people to lock up their OMM long-term. It’s now time for the community to test, discuss, and prepare to add it to the protocol.
This post is intended to help community members try bOMM on the testnet, and provide all the details they need to make an informed voting decision.
What is Boosted OMM?
Boosted OMM (bOMM) is a way to align protocol rewards and voting power with those most invested in Omm's long-term success.
bOMM uses a vote-escrow model similar to Curve, and is designed to replace the existing OMM staking model. Rather than a 3-day unstaking period, you decide at the start how long to lock up your OMM: 1 week, or up to 4 years.
A lot can happen in 4 years, especially in crypto, so why would anyone choose to lock up OMM for that long?
The longer you lock up OMM, the higher your earning potential and voting power.
If you doubt peoples' long-term commitment, take a look at Curve. 53.94% of CRV, its governance token, has been locked up for an average of 3.58 years:
When you lock up OMM, you receive a certain amount of bOMM, a non-transferrable token that determines your governance power and how many Omm Tokens you can earn from the protocol. The longer you lock it up, the more bOMM you’ll hold.
1 OMM locked up for:
- 1 week = 0.0048 bOMM
- 1 month = 0.0208333 bOMM
- 3 months = 0.0625 bOMM
- 6 months = 0.125 bOMM
- 1 year = 0.25 bOMM
- 2 years = 0.5 bOMM
- 4 years = 1 bOMM
As the lockup time decreases, so will your bOMM. It decays linearly to 0 based on the amount of time remaining, so if you lock it up for 4 years, 1 bOMM will become 0.5 bOMM after 2 years.
People who participate in a market or liquidity pool without any bOMM will earn diluted OMM rewards. They won’t be able to participate in Omm governance or delegate votes to ICON P-Reps.
Those with bOMM have voting power, receive OMM (formerly staking rewards), and can earn up to 2.5x the OMM for each market and liquidity pool.
How the rewards are calculated
The amount of bOMM required to receive maximum OMM rewards depends on the size of your position compared to everyone else’s, and the amount of bOMM they hold.
- The multiplier determines the amount of bOMM you need to maximise your earning potential for each activity. It ranges from 1x–2.5x, and can be found with this equation:
- The boost is displayed under 'Market rewards' and 'Liquidity rewards'. It's the difference between your interest rate and the base rate for each activity – your "boost" in rewards – and ranges from 0.4x - 2.5x.
For each market and liquidity pool:
- If no one has bOMM, everyone gets a 1x boost
- If everyone except you holds enough bOMM for a 2.5x multiplier, your boost is diluted to 0.4x
- If you set a 2.5 x multiplier and no one else does, you get a 2.5x boost
- If everyone sets a 2.5x multiplier, everyone gets 1x boost
How to test bOMM
The bOMM functionality is live on the Sejong testnet: test.omm.finance.
If you’ve never used Omm on the testnet before, follow the instructions in Try the testnet app to learn how to adjust your wallet and get compatible assets. You'll need some OMM to test this feature: earn it from the Omm markets or buy some from the Balanced testnet exchange.
After you're signed in to test.omm.finance with OMM in your wallet, you can test the Boosted OMM functionality on the Rewards and Vote pages.
Try to lock up some OMM and play with different time periods to see the amount of bOMM you’ll receive, and how that affects your voting power and reward boost for each activity.
Note that after you lock up OMM, you can't reduce the lockup time or lock OMM for multiple timeframes. Any additional OMM you choose to lock up will be locked for at least the same time period.
After you lock up OMM, you'll need to apply your boost so you can earn more OMM. To make sure your boost gets applied to everything, claim OMM rewards. Market and liquidity pool adjustments will only apply your boost to that specific activity.
You can use the 'All markets' and 'All pools' views to compare your boosted rates to the average. To compare market rates on the Home page, set the toggle to display 'Rates with OMM'.
And if you're curious how staked OMM will be migrated to the new bOMM model, you’ll be given the option to unstake your OMM or lock it up for 1 week.
Participate in the governance discussion
After you’ve tested bOMM, come over to the forum to discuss the implementation.
If you have any feedback, questions, or bug reports, leave a comment on OMM Token Economics Enhancement: bOMM to make sure it gets addressed.
While the community tests bOMM, the smart contracts will be converted from Python to Java at the request of the ICON team. Based on Balanced's migration progress, this may take up to a couple of months.
In the meantime, a proposal can be submitted to a vote for the DAO to approve/reject the upgrade. If you'd like to participate, make sure you have OMM staked in preparation.