@RDL thanks for reading the post thoughtfully!
-
The $1.3MM, $2.5MM, and $3.7MM figures were taken from other governance proposals that discussed v1 reimbursement possibilities. Unfortunately I was limited to two links for my post so I had to remove references.
-
The [40]% was also simply an assumption. Your example of using 17.5-25% of monthly treasury fee income is probably a better place to start.
The mechanism I describe of buying back P100 tokens from a liquidity pool as a way to reimburse affected users is very similar to your proposal to buy-back PERP.
I would say the notable difference is liquidity.
If protocol revenue is set aside to buy-back PERP, the maximum reward an affected user can obtain on a weekly/monthly basis is equal to [period buy-back]/[# of affected users who stake].
By issuing P100 tokens and making recurring purchases from a liquidity pool, the users who want immediate liquidity can sell into the pool. This also lowers the cost of P100 tokens that remain to be bought back.
One mechanism is not better than the other. Your proposal is very well thought out and makes a lot of sense. My goal in making this proposal was to bring forward a reimbursement design that has been used by other organizations before.