Ultimately, projections have to rely on a key assumption as to the price of ONE after the 3 year unlock. 66% of the compensation is based on that price.
If its higher than $0.0264, it can fairly be said to be 66% parity reimbursed in USD terms. If its lower, say 50% lower around $0.0132, it would only actually amount to 33% parity value in USD terms. All that matters is the price of ONE on unlock day, not the price average over the next 3 years which the other proposal would capture in addition to compound interest starting now since ONE is distributed monthly. If there is ever a rally between now and the 3 year unlock date, that would be major upside under the other plan. With a market price closer to $0.023 today, Stephen’s monthly distributions would already be up almost 15% in USD parity value so the users are missing out on all this upside to receive the lion share of their compensation in locked ONE.
You’d then need to factor in the return that can be earned on ONE distributed monthly starting now against this backdrop if Stephen’s plan is compared. If all goes according to plan, R1 would net more of a percentage of loss amounts. If all doesn’t go according to plan, it won’t. And there’s no way to know this for certain until you see the ONE price on unlock day and the price of rONE after you mint it and its available price in these liquidity pools. There can also be losses incurred after minting for some users as the price will fluctuate significantly due to the ability to mint and sell rONE until depegged assets increase by 200% from their current price.
This also considers the price of rONE maintaining itself in what appear to be tiny liquidity pools which will be significantly diluted in my opinion. Even bringing every single depegged asset up to 30% parity value to then sell the minted rONE from this in any liquidity pool would probably drop the price of rONE in half in these pools under the assumption that there’s millions to be made from this trade. This means new minters will mint for more rONE and this can easily result in a death spiral at least at first putting any early minters at risk of actually getting less than 30% of their parity value in USD terms when all is said and done. If they mint and stake and these arbitrage trades are made, they might actually only end up getting 20% of their parity value in rONE. Again, its entirely sensitive to price.
Its possible early rONE minters take 50%+ losses if the depegged assets are raised to the 30% level by this trade only to dump the rONE significantly impacting the price.
Any spreadsheet made will obviously assume prices of rONE and ONE and that’s the only factor that really would matter for a mathematical comparison. If ONE and rONE prices go up, or stay stagnate, it will be higher. If prices go down and ONE is lower on unlock, it will be lower than if you had it now and staked it while ONE was above $0.023. This is the only assumption that matters.
If you want to do a projection, I’d focus on how much of whatever liquidity gets put in is going to go to this arbitrage trade and how will that affect the rONE price? Without these pools, rONE will only be exitable through the redemption process at a 50% haircut for the first month or additional 67% hair cut for most people after the first month (unless they wait for the linear penalty model to increase) through redemption. So they can’t really get out without a huge haircut and this forfeits their locked ONE. So a person taking early redemption is only going to get close to 15% parity (50% redemption in the first month if they met the snapshot) value or even 10% parity value (33% redemption after the first month until it increases towards the 3 years). So in that scenario, how is it you are so certain it is better?
If 30% of the parity value only is redeemed for approximately 10% of the parity value under the early unlock through the 33% redemption window and the ONE price is something like $0.02 at unlock, it would not amount to a 50% reimbursement. It would be 10% parity value from the early redemption and the locked one is forfeited, right? So the only way it would be better is if the following assumptions hold 1) the rONE price is maintained so that when a user mints 30% parity value, they do not lose value by holding, and hold the entire 3 years and 2) ONE price is higher than $0.0264 when unlock happens. Of course if they mint and rONE price goes parabolic, they could be totally reimbursed from this alone by selling it or redeeming it. It just depends almost entirely on prices.
Since Stephen’s minted the same 2.5B tokens, these users would get 50% reimbursement at $0.02 monthly (already would have realized a pretty sizable advantage given the price of $0.023 today) and immediately can put that to work at 10% staking APR and higher APRs on dexes like Fuzz, Sonic, Defira, and others where ONE is already completely incentivized. If they compound this the entire time and ONE stays stagnate, I would bet they would come out ahead in 3 years.
Adding compound interest to this available buying power today almost certainly would get the parity value actually reimbursed to be higher than the R1 proposal in even a fairly rosy landscape of assumptions. This also needs to factor rONE staking compound interest as well - but also sensitive to rONE price.
Otherwise, the entire model relies on the price of rONE holding up in these liquidity pools which don’t sound like they are going to have much liquidity at all and anyone can dump into them at least until millions in depegged assets are brought up to the 30% parity level. Once that happens, I would assume the price of rONE would more or less stabilize and could increase with effective utility strategies. There will likely be significant volatility in rONE price until the arbitrage trade is washed out. We won’t know which way that’s going to ultimately go, hence the risk involved. rONE could 10x while ONE crabs for all we know and in that assumption, it would be far better. With risk comes the chance for both upside and downside. But if its downside, there’s easily a set of assumptions where the users get way less than 50% especially if they redeem at any point in the process as opposed to waiting the entire 3 years.