# Replacing linear for logarithmic/curve ratio for Maha/MahaX

Currently we have a linear ratio for acquiring MahaX by locking Maha. This is outlined in AIP 18 in the following table;

I would like to explore around the idea of changing this to either a logarithmic or curve, while maintaining a 1:1 ratio for 4 year lock. This builds upon the existing incentives of locking for longer, while limiting circulating supply thus allowing for ease of movement with price appreciation.

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I like this idea Michael, definitely will stimulate people to lock for 4 years

That is a good idea - longer the period, higher the benefits with a curve bond.

However what about an idea to set a 4 years lock with a 10% bonus which would gradually come down with time lock? So for 1000 MAHA locked for 4 years thatâd be 1100 MAHAX, then for 2 years that be 525 MAHAX (5% bonus) etc. The percentage could be a curve based as well, so itâs not linear to a time period locked and the bonus increases with time as well.

Let me know if thatâs technically possible and what you think about that. I might have gotten too far with it though

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RED LINE = Linear ratio (Current)
BLUE LINE = Concepts

So this would be a rough idea of a curve - lets call this âfig.1â

Next - âfig.2â with S-curveâ

Next - âfig.3â with S-curve + 10% bonus

Next - fig.4 with S-curve + 10% bonus + level steps

Next - fig.5 with linear bonus after 2y, and curve under 2y.

As we can see with fig 2 and 3, there is not a great deal of incentive to lock the extra year (3y to 4y). So this runs counter to the purpose.

Fig 3, 4, and 5 are interesting approaches I think, would need to clarify with @enamakel if a bonus is technically possible.

Fig 1 is initially the general idea, but this would have difficulty with consensus as anyone locking less than 4 years essentially yields less mahaX than currently, and the decay rate is much faster.

Thoughts?

A general question is whether it is necessary for MahaX to decrease over time when holding MahaX. Or can we leave this out completely?

If we leave this out, we would still have the conversion factor from Maha to MahaX (as shown above in the example of 1000 Maha), which is currently Linear. Someone who locks longer gets more for it than someone who locks shorter.

If the MahaX value (after the lock) remains the same over the entire time, then you also benefit 100% from this MahaX value over the entire lock period, e.g. in staking, voting power and can (if over 300 MahaX) participate in IDOs the entire time. Personally, I think this is fairer than having MahaX decrease over time.

If the MahaX value remains constant over the entire locking period, then it might also be possible to combine MahaX that have been locked for different periods of time. For example, someone holds 4-year MahaX and 6-month MahaX (in the same wallet), which can then be used for staking and voting etc. more easily as one sum, as the complete MahaX number remains in the wallet until the youngest unlock date. Unless he locks more Maha.

As an example without decrease over time:

You lock 500 Maha in the following locks on 1. November 2021:

200 Maha for 4 years = 200 MahaX until 1. November 2025.
200 Maha for 2 years = 100 MahaX until 1. November 2023
100 Maha for 1 year = 25 MahaX until 1. November 2022

The number of MahaX you hold would then be as follows:

Total 325 MahaX from 1. November 2021 to 1. November 2022. (Assuming you do not lock more.).

Total 300 MahaX from 2. November 2022 to 1. November 2023 (Assuming you do not lock more in the meantime and let the 1-year lock expire).

Total 200 MahaX from 2. November 2023 to 1. November 2025 (Assuming you do not lock more in the meantime and let the 2-year lock expire).

This would offer more flexible lock options and easier integration of the total MahaX into applications such as Staking or MahaStarter etc.

Itâs important to have the decay - because this is also a governance token. Say someone had 10,000 MahaX with a 4 year lock period, and a proposal came out with 1 week remaining till their expiry. The issue here is they get to represent a 4-year lock commitment âin the voteâ, when they are not actually exposed to the outcome/impact of the vote for 4-years. This has the potential to invite all kinds of problems - because you create a disproportionate level of exposure relative to the voting power.

What we want, is for people that have a greater impact on vote outcomes, to also have âskin in the gameâ long enough to be effected by each vote. This keeps the focus on what is good for the ecosystem, while significantly limiting the vulnerability of rouge interests.

Essentially the MahaX is a representation of your commitment, and your commitment effects your voting bias. What we could consider instead, is something like an âautomatic extensionâ.

Yes, I understand that it makes sense for voting. But not for everything else.

Could we separate (the calculation for) the voting from the rest? The voting power is reduced, but for staking, IDOs etc. the MahaX value remains constant (as I described above). Generating both values from the locking data should not be a problem, I think. And would allow a lot of flexibility.

Honestly, I think this approach simply lends itself more to rewarding the interest to exit as equal to the value of ongoing commitment. Which is not the kind of thing we want to put on par in terms of incentives and rewards.

MahaX is a representation of âhow long are you locked forâ, not âhow long did you lock forâ. Both rewards and voting power is commitment based - not prior commitment, but ongoing commitment. If people want to exit after 4 years, then that intention should discount the benefits over someone who desires to remain.

The longer I look at those the more I donât like it and want to stick with linear approach, however Fig. 3 might be a good one. What about an idea to add bonus (even a tiny one) for each week you lock your tokens, so it ends up with 110% of MAHAX (Lock for 208 weeks).

I think itâs perfectly legitimate to limit your investment and commitment to a certain period of time (Iâve already written about this elsewhere). Then you can get involved in new projects, for example. If you invest your money in Maha for e.g. 4 years (and it keeps its value) but the voting power decreases towards the end, I also find this reasonable and legitimate.

I donât think a 1:1 connection is the right thing here. Because the commitment and possibly also the interest in the development beyond your MahaX time may decrease over time (therefore it is good if the voting power is reduced towards the end), but the money investment is 100% tied to Maha until the last day.

If the investment power decreases over time, then in my opinion this is diametrically opposed to the philosophy that we want to achieve with Arth. The preservation of value over time.

If you lock 10k dollars in maha for 4 years today, then the earning value of the investment is reduced significantly. I am not talking about the speculative maha price development, but about the returns that this deposited money brings. (As a comparison, at the bank you earn interest on 10k dollars over the whole 4 years. More correctly, with compound interest, the longer the more. In the 4th year you earn interest on more than 10k dollars. With Maha it is the other way round. The âinterest-bearingâ investment decreases rapidly).

If you stake your 10k dollars in MahaX, then it looks like this:

In the 1st year you earn income on 7.5-10k of your deposited 10k investment.

In the 4th year you only earn returns on 0-2.5k of your deposited 10k investment.

And this even though you have deposited 10k dollars for four years. (And inflation will probably rise during this time).

The first 2.5k invested dollars, which fall out of the investment over the first year, will also not bring any returns over the next three years. After two years it is already 5k, which will not bring any returns for the next two years, in the last year more than 7.5k of your 10k dollars will bring anything, etc.

If we are trying to preserve Arthâs value, we should do the same with investments in Maha.

But as described, this is only one aspect. In addition, there would be other advantages such as:

• More flexible time locks (people could lock MahaX for different times in the same wallet, depending on their personal preferences, life situation and risk management) = More flexibility.
• The minimum IDO MahaX would not have to be constantly extended in time or topped up with more Maha in order to not fall below 300 MahaX. = Simplification
• People get 100% of their investmant power (staking, airdrops etc.) over the whole time = Value preservation
• Integrations into applications (of Staking, MahaStarter etc.) would probably be much easier than with a constantly reducing MahaX number.

These are all points that benefit people and simplify things for them and for developers.

Would need to clarify with the devs - Iâm not sure it is even possible to simultaneously have a decay on MahaX for voting use, with a fixed quantity of MahaX for staking use. Even if it is possible, the reasoning for doing this amounts to a difference in philosophical expectation between two different coins - the fact that Maha is not a stable coin alone refutes the point that there is an expectation for it to hold value. That 10k investment can double or half in itâs value irrespective of any decay rate or none, so this argument is not a strong one to make.

Once again, the staking rewards are recognizing both investment and commitment. With the decay, it also means that your pool share decreases as opposed to someone who is extending (with all else equal). This is the same model that Curve Finance uses, and it is to create the incentive for on-going continued TVL.

Lets call it how it is - people want their cake and eat it too, they want all the benefits while reducing their risk of exposure. That is what you are being rewarded for - your risk of greater exposure. The fair thing to do here is to reduce the reward in conjunction with the risk, and increase the reward with increased risk.

If you have 1 week left of your lock, compared to another who has been extending with 4 years remaining, theyâre taking on much more risk and I donât think purely rewarding them with more voting power is enough - because clearly there is more interest in the staking benefits as observed by the mahax increase by nearly 3-fold during an IBO sale, as opposed to an AIP to remove ArthX.

Youâre approaching this purely from an individual preference - rather than seeing the big picture of why it is like it is. That bigger picture is this;
The pool share effects rewards earned, and the decay rate effects your pool share. Extending lock dries up circulating supply more, which allows price appreciation of Maha to occur with less effort of buying pressure.

I am 100% certain that removing the decay will result in a much lower valuation of Maha price. Once MahaX staking starts, people are likely to lock for much longer, and continue to extend each week to maintain a higher poolshare % to get more rewards.

The point of it is to choke the supply while simultaneously rewarding people for doing that and encouraging them to do so for as long as possible.

Can you elaborate more specifically on what it is you donât like and why? Also Fig 3, 4, and 5 all have bonuses illustrated with them. These are concept diagrams to convey different approaches that each have their own proâs and conâs. What I think will be a better focus, is a discussion on what those pros and cons are.

My idea was to make a step-curve similar to fig. 4 but with steps every week or 2 or 4 (really tiny steps). Actually the mixture of Fig. 3 and .4 would be close to ideal in my view.

What I didnât like was the likelihood of people locking their tokens for less rewards (as for the graph) in given short periods (especially with bear market coming sooner than later). So to diminish rewards for short term stakers means we need to withstand the backfire from those people choosing such an option. HOWEVER, looking now from afar I think it will be worth it in the long run.

The best then in my view are the mixes of Fig. 3 and 4

This might actually be a good compromise with @LongWay input about the decay.

If we create larger steps, say every 6 months, then the decay rate can follow this too. That is, we bump up the % in wider intervals, which means the decay would also hold still for these intervals.

E.g. locking for 6 months yields the same as locking for 11 months - but as soon as you lock for 12 months it steps up in %. Someone could lock for 9 months and there would be no decay for 3 months.

And yeah, people locking for short timeframes would more likely than not have a bias to oppose any curve/step suggestion - but they would also have less voting weight unless they locked longer. At which point they might like the suggestions lol

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Even if it is possible, the reasoning for doing this amounts to a difference in philosophical expectation between two different coins - the fact that Maha is not a stable coin alone refutes the point that there is an expectation for it to hold value. That 10k investment can double or half in itâs value irrespective of any decay rate or none, so this argument is not a strong one to make.

As I wrote above, âI am not talking about the speculative maha price development, but about the returns that this deposited money brings.â

Whether you have 10k dollars or 10k value dollars in MahaX, it is always 10k dollar investment that you can lose.

Therefore, whether it is interest/staking rewards (=risk reward for the deposited investment) on deposited MahaX or on dollars, euros, stablecoins or Tesla shares, the full volatility of the âstore of valueâ does not matter. The return (= risk reward for the deposited investment) is a % rate of the whole investment and independent of the potential development of the actual asset. The dollar or the bank deposit can gain or lose value during the investment period just like Maha or the Tesla share. But this has nothing to do with the rate of return.

Lets call it how it is - people want their cake and eat it too, they want all the benefits while reducing their risk of exposure. That is what you are being rewarded for - your risk of greater exposure. The fair thing to do here is to reduce the reward in conjunction with the risk, and increase the reward with increased risk.

Exactly, but someone who deposits his investment for 4 years does not only take a higher risk in the first week, but over 4 years.

The risk you take when you put 10k dollars in Maha for 4 years includes 1460 days of risk of losing your investment. This can go well for 1459 days and on the last day (1460th day) you lose everything for some reason. In the current MahaX system, this person has carried 100% of the risk for 4 years but has only received interest/staking rewards (you could also call them risk rewards) on a fraction of his investment during this time. Thus, the risk is disproportionately greater than the risk reward.

If you have 1 week left of your lock, compared to another who has been extending with 4 years remaining, theyâre taking on much more risk and I donât think purely rewarding them with more voting power is enough

Financially, both people have the same risk while staking MahaX. If one stakes for 1 week, he carries the risk for 1 week, if one stakes for 4 years, he carries the risk for 4 years, even on the last day at 100%. The risk on day 1 is as great as the risk on day 1460. One has already gone through it, the other still has to go through it.

As described, as far as the voting power of the two is concerned, it is something else.

Because the investment risk ends on day X, when the lock is lifted. With the voting power, on the other hand, he can influence beyond his investment time. For this reason, the investment should keep its full value 100% until the end of the risk, but the voting power should decrease.

because clearly there is more interest in the staking benefits as observed by the mahax increase by nearly 3-fold during an IBO sale, as opposed to an AIP to remove ArthX.

If the MahaX investment brings returns 100% of the time and not just a small portion of the investment, then more Mahas will be attracted to stake. The Mahas are taken off the market and with more MahaX the voting power and the distribution of these in the DAO also increases.

It therefore makes sense to take Mahas off the market and stak them as MahaX for 4 years if you also get 100% staking yield over the whole time. This makes staking more attractive.

Reducing over time only to continuously accumulate more maha is not very ethical in my view.

If is possible something like that can be the ideal situation
Something likeâŚan ânftâ is created when you lock your maha, after that mahaX (and the voting power) continues to decrease but this ânftâ represents the original value locked (10k \$ in this case) so the fees will be paid to that nft
When lock expires you have to give back that nft to withdraw your maha
âŚI am not shure if what I write have sense ,

Example
Whe you lock 1000 maha for 4 years you recive

1. 1000 mahaX
2. 1 nft who says âthis adress have 1000 mahaXâ

I disagree with considering 1 week and 4 years of locked stake as equal risk - weâre not talking about the parameter of risk on a day by day basis, the stake is locked without option to remove, so it makes sense to consider the whole maturity of the locking period. So in this sense, if two people lock for 4 years and over the following year only one of them is extending their lock period - theyâre effectively onboarding an additional 365 days of risk exposure. The only difference is such risk is yet to pass in time, but it does not change the fact that it will pass in time and that decision is made now.

Again with the same situation above, that after 1 year elapses one person extends compared to the other who does not. What incentive is there to extend the lock if there is no decay? So how is a person rewarded for demonstrating that additional commitment? Removing the decay, in combination with MahaX staking rewards going live, means you set a ticking timebomb in four years time where an overwhelming amount of Maha supply is released on to the market. Already, before staking has even gone live, you could expect a 10% supply release within a two month period (roughly 2 yrs from now) - imagine upwards of 75% of supply being released in a small window of time roughly 4 years from now and what that will do to the market.

The mechanics we currently have, are conditions that lead to huge price appreciation - and the key point is that it sustains this price appreciation. Which, is also something that many investors factor in to a risk profile. You want to remove the decay, then you set the conditions in motion for a post-dated market crash when too much supply unlocks simultaneously. This is well understood as part of analyzing any projects tokenomics - what is the supply % being distributed and when.

Curve finance roughly has around 60-70% of their supply locked up for an average of 3.5 years. This bodes a much different risk analysis with new investors than looking at the MahaX contract and pinpointing a quarter where most of itâs supply unlocks. I would analyze the smart contract thoroughly and if I seen that large amounts where about to unlock in the next month or so, I would likely be scaling out beforehand.

So removing the decay, while it may seem like youâre reducing the risk - youâre actually creating a bombshell where sell pressure would come in right before supply unlocks, while simultaneously discouraging buying pressure prior to unlocks. Then throw on top of this the actual unlocking itself. We can even look to our own project with Arth V1 as an example of this. When MahaSwap had huge fees in place for selling Arth, that in essence it acted as if it was locked. We inflated the supply to \$20mil during this and what followed after? A massive supply that could not be supported, resulting in a 90% rebase. This is a different form, but similar in the sense that by choking Maha supply we create price appreciation, because that price point is taking into account the circulating supply with the perception of how long is it going to remain like that.

Launch MahaX staking = much of Maha supply locks up for 4 years around the same time period of when Staking launches. Remove the decay and you hinder investment in 3.5 years time when people start scaling out and buyers hold back because they see the unlock coming. This creates the perfect conditions for a crash, when all we had to do to avoid it and sustain investment, sustain interest and support, is to implement a decay. That is why Curve finance has a decay, and why it is a good practice to follow. Because honestly, I think it would be unethical not to.

Maha supply increases permanently over the next few years.

We have only locked a small part of Maha as MahaX, this for different times and the locked time will continuously differentiate.

Over the next months and years, new people will permanently come and lock their Mahas at and for very different times. Others will extend their MahaX at some point in the period, etc. So the release times will become more and more intermingled over many years.

However, this point should not be a reason why you should not get rewards on a large part of your investment for years.

As described, with Arth we are trying to create a currency that keeps its value over time and benefits people. With the supporters of MahaDAO, however, the opposite is implemented with the decrease of the investment, which in my view runs against the MahaDAO philosophy. MahaDAO should also offer the best possible conditions for its supporters and investors, as it does with Arth for the people.

I think we can agree to disagree on this - Maha is fundamentally different from Arth, in both its characteristics and purpose. Maha does not run counter or opposite to the goal of value preservation, because it is a volatile asset that fluctuates in value - sometimes more, sometimes less. It simply doesnât make sense to try make a case where it should be a âstore of valueâ regardless of opinion.

Wait for MahaX staking to start, then lets talk again about how much variance there is with locking durations if you hypothetically removed the decay. Even though there is still 60-70% of the supply left to distribute, you donât need that much to crash a market if its depth is only a few %. The decay helps prevent any front running of significantly large supply unlocks. Because in 4 years time you may wish to exit on a high Maha price, and that is almost encouraged if youâre getting full staking rewards the whole duration. Yet that option to exit is removed if you instead opt to farm maximum rewards by continued lock extensions.

Once again, MahaX is representative of future commitment - not past commitment. If you have 1 year left of your 4 year lock, then your future commitment is 1 year, not 4. I think we have reached an impasse for now, lets come back to this at a later date after MahaX staking has gone live.

For now, Iâd like to bring the discussion back to the original topic post and focus on pros and cons of the different curve approaches.

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The purpose of MahaX is to lock as much Maha as possible for as long as possible.

My personal opinion is that the locked Maha should be counted 100% as an investment for the whole time and not 100% on day one, with an ongoing reduction, down to 0 on the last day. At least after half the staking time, many people will notice that they profit less and less for the rest of the time, although they have still locked the same amount until the end.

A suggestion for a compromise would be the following:
How much MahaX you get remains linear as it is today.
But: The longer someone locks, the more his investment holds its value. The shorter someone locks, the faster it decreases.

People therefore profit more if they lock for longer. This proposal therefore creates incentives to lock for a longer time from the beginning.

This proposal is intended in particular for staking, IBOs/IDOs and airdrops etc., but can (but does not have to) also be adopted for voting power.