Weighing in here, we’ve voted yes to this proposal given the urgency to re-capitalize the solver budget (with its depletion last week). The proposal highlights several changes to the budget and solver reward mechanism that directionally make sense given recent changes to the market environment.
However I think the point @Filius brought up is spot on in terms of this budgeting and reward mechanism being too static. 6mo is (or can be) a very long time in our industry for the environment to drastically change, as we’ve begun to witness again. Trying to estimate COW and ETH prices or orderflow/volume metrics is unreliable and COW DAO will likely need to remain conservative in how it adjusts its COW emissions up/down for solvers given it (or at least I would) prefers stability in its solver ecosystem.
This is not the right time or place to kick this off, but I would welcome a healthy discussion over the next two quarters on how to evolve the solver reward mechanism to be more dynamic with real-time adjustments based on volume and protocol revenue (vs. static 6mo adjustments based on COW/ETH price). I like @harisang alluding to this as well:
Meaning that one would need to come up with a robust mechanism that automatically adjusts the rewards based on the competition (such as CIP-20) in order to avoid having to “manually” adjust the mechanism depending on the orderflow the protocol receives and the COW price.
Just brainstorming, a couple early thoughts:
- A base stipend in stables, to offset solvers’ fixed operational costs. There could be a threshold, eg. only during an onboarding period or performance metric (min surplus provided, etc).
- A performance/volume-driven reward in ETH, given CoW Protocol revenues will likely be collected in this form. May be unnecessary or scaled down if solvers are able to collect their own fees during submission with driver colocation.
- A performance/volume-driven reward in COW tokens to align long-term incentives between the solver and its continued interest in servicing CoW Protocol