Summary
As the liquidity mining period ends, a large amount of supply is expected to be claimed in the coming week. It is fair to expect that some portion of that supply will immediately move to the Uniswap pool to be swapped into ETH. Given the current size of the RGT-ETH pool, this supply is likely to add significant downward pressure to the price of RGT. So, I propose we re-mint the amount of supply that has been burned via early claimants (~ 500k RGT), and use it as an incentive for providing liquidity to the Uniswap pool. This should help soften the blow of the coming supply shock.
Background
RGT tokens were created with a fair launch model, and could be earned by depositing funds into Rari strategies. Claiming RGT came with a penalty, which began at 100% at launch and decreases linearly until 0% this coming Saturday. Thus far, ~ 2.2m RGT have been claimed, ~ 525k RGT have been burned, and ~ 6m are yet to be claimed. It should be safe to assume that these remaining 6m RGT will all be claimed by the end of the year, if not the end of next weekend.
The RGT-ETH pool on Uniswap, by far the main venue for buying and selling RGT, currently has ~ $600k in liquidity (550 ETH/346k RGT). If we assume that 1/6 of the remaining unclaimed RGT will be sold immediately after they are claimed, this will equal another 1m RGT going through the pool. At the current pool size, this would bring the price of RGT down to near zero. (Note: this ignores demand, which would prevent this from happening to some extent).
Abstract
The ~ 500,000 RGT that have been burned as a result of early claims (and not through fee buybacks) should be re-minted and used as an incentive to provide liquidity to the RGT-ETH pool. These tokens should be released over the span of many weeks; I personally would recommend a schedule of 10,000 RGT per week for 50 weeks, although this is open to discussion. This will help reduce the impact of incoming supply on the price of the token, at a minimal inflation cost (these tokens would merely increase total supply to its initial state).
Motivation
To prevent the price of RGT from collapsing, which could hurt community members and produce bag-holder syndrome (bitterness toward the project due to malperformance of the token), leading to less community activity and involvement in the project.
A Caveat
Liquidity in the pool has been on a strong uptrend for days/weeks, and the issue could be solved on its own. Additionally, a short term price crash due to the coming supply shock could be beneficial to community members, as it will allow us to buy up additional supply at even lower prices.
LP rewards could also be lowered, depending on how much liquidity builds up in the pool. We could still mint the tokens but add them to a treasury, which would start with these LP incentives but could be used by the community where needed as Rari progresses.
For: Re-mint the burned tokens from early claims and use them to incentivize Uniswap LPs.
Against: Leave supply as it is, allow liquidity pool and price to regulate themselves.
