Background

CCIP-030 created a system whereby if you move MOONs out of your Reddit Vault at some point you become penalized on future MOON distributions. This system is known as the Karma Multiplier (KM).

The intent of this system is to keep MOONs tied to the account which earned them so that the "governance gridlock" is avoided when not enough moons that are eligible to vote can participate, making polls very difficult to pass.

While I agree with the spirit of this idea, it is my opinion that in retrospect it's too harsh in many ways, resulting in several issues, which have become more clear as MOONs use cases have expanded in the last year.

Current System

The current formula is:

KM = (Current Balance + Membership Purchases + Other Burns) / (Total Earned Moons * 0.75)

Some additional details

• The minimum value for KM is 0.1 and the maximum value is 1.0
• You can move up to 25% of your earned moons before the penalty starts ("the buffer")
• Moons burned or used to buy special memberships are not penalized.
• "Other Burns" refers to CCIP-049

Example: A user has earned 100 moons and currently has 70, with no burns or membership purchases. Their Karma Multiplier would be 70/(100*0.75) = 0.933

Possible Issues with Current Implementation

Some issues that might arise from this system are:

• It is complex and may penalize new users before they fully realize the consequences of their actions.
• MOONs now have other use cases beyond just special memberships, including banner rentals and AMAs. Liquidity on exchanges allows people to acquire MOONs for these purposes, speculation, or whatever other reasons. If the penalty for moving MOONs out of your vault was less severe, this could incentivize users to provide more liquidity on CEXs or DEXs.
• It discourages users (and mods) that have moved MOONs out of their vault for whatever reason over the years are to participate in the subreddit.

Proposed changes to the system

In this proposal I suggest the following:

• Increase the minimum KM value to 0.5
• Effectively increase the "buffer" to 50%, meaning that users can freely move 50% of their total earned moons before the penalty starts

The new KM equation would be:

KM = 0.5 + ((Current Balance + Membership Purchases + Other Burns) / Total Earned Moons)

Where KM cannot be less than 0.5, and not higher than 1.0.

Examples:

1. A user has earned 100 moons and currently has 0. Their KM is 0.5
2. A user has earned 100 moons and currently has 20. Their KM is 0.7
3. A user has earned 100 moons and currently has 50. Their KM is 1.0
4. A user has earned 100 moons and currently has 100. Their KM is 1.0
5. A user has earned 1000 moons, has used 200 for membership purchases, and currently has 100. Their KM is 0.8

Benefits of proposed new system

• It is slightly simpler and less harsh
• It would hopefully help increase liquidity and perhaps encourage other new services or use cases.
• It may alleviate confusion and aggravation for users.

Drawbacks of the proposed system

• It would likely reduce participation in terms of total voting weight (although it could help draw in more users and increase participation in terms of number of humans).

tweaked thanks to u/ominous_anenome

CCIP by u/jwinterm

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