We had an interesting conversation on Discord tonight about DIGG and bDIGG and how that all works with rebasing. I took a few minutes to clean it up and publish it, as I thought people may find it helpful or thought provoking.
Okay guys I’m still very confused about DIGG from the recent tweet, which I’m sure other people are too. 600 airdropped at the start, then the remaining are released for weeks after until we hit 4000? But it also rebases, so how do we know when the distribution for DIGG will be done?
Tritium - VLK
ok, hang on let me find the wiki thing. Here is a graph of the Digg token supply from The Badger DAO Community Wiki
So imagine on day 0 there are 4 wallets: DAO, Airdrop, 8-week Liquidity Mining(LM), and Team. They get their DIGG on the ratios there above. Now, let's say for simplicity sake that at T=0 the Airdrop and Team DIGG is also instantly sent to peoples wallets. So now there's 2 big wallets with 40% each.
The LM wallet has 40%:
Each week 1/8th of that is taken and fed into a contract that emits it evenly over that week into the setts. So at the end of 8 weeks that is empty. The quality of tokens moving at any given time can change because everything is based on ratios.
But, BIP-24(See Proposal 4) makes things easier by basically(again maybe over simplifying) proposed wrapping everything at T=0 to bDIGG, which will have a consistant supply. Then the DIGG in the bDIGG tokens is changing with rebasing, but also being added to by emissions (also rebasing). This makes it easier to think about, because the number of bDIGG you're emitting/airdropping can be the same. It's just different how much DIGG comes out.
Then after 8 weeks, all DIGG will be in circulation and it’ll be purely rebase?
No then there is still 40% in the DAO that we can decide to do stuff with. Emit more, Airdrop, HODL, whatever
Does bDIGG not rebase? Do you happen to have a source on how the rebasing tokenomics work?
Think about it. Do you understand how bBADGER works? and why you get less than 1 bBADGER per badger? Now then there is still 40% in the DAO that we can decide to do stuff with emit more airdrop whatever.
Right. It's a pool-share so it stays constant to whatever your percent of the pool is in relation to emissions?
Ok look. bBADGER has a price per share that started at 1 and goes up as more interest is fed into the sett in the form of BADGER emissions. So like last i checked 1 bBADGER is like 1.13 BADGER or something.
Imagine DIGG didn't rebase bDIGG would be exactly the same as bBADGER. You mint bDIGG by depositing pricePerShare() bDIGG, and it's price per share goes up as more DIGG is added by emissions. You can withdraw from the sett to burn bDIGG and get pricePerShare() DIG.
Now take all of that and just add rebasing everything that is happening, so when DIGG rebases down by 5%, the pricePerShare() of bDIGG goes down by 5%. When you burn it you get 5% less DIGG. This is also true of the BADGER wrapped DIGG LP tokens. Those stay static too. How much DIGG is in the LP is however rebasing.
TL;DR: 1 bDIGG is always 1 bDIGG, you can mint/burn for the current pricePerShare(). They're like little rebasing mini-wallets that earn interest
Yes. This makes sense. Thank you
You're welcome. @breadbot @FarmerBrownDeFi mind if I post this slack convo as a blog post, I think it actually makes DIGG/bDIGG a lot more understandable and maybe can help other people.
Not at all
Yeah I think so, honestly done playing with numbers just ready to see it in action