Dividends mechanism and calculation


#1

Hey
This is more like a question to @thibauld as the author of the whitepaper.
The dividends mechanism described runs as the following (correct me if I’m wrong):

  • the COrg buys some new FAIRs which are then distributed to all holders
  • the total amount of ETH used in this transaction goes to the reserve fund.

I was wondering if the following could be another way to distribute dividends, which seems conceptually simpler to me:

  • don’t increase the FAIR supply
  • simply increase the reserve fund by funnelling ETH to it.

It seems that this version would increase the s slope a bit more (after doing some calculation). But more importantly it would increase the “whole” slope from 0 to x(after dividends), whereas the suggested version would only modify the slope from x(before dividends) to x(after dividends).


#2

Good point, I agree with you. Not minting new tokens and solely increasing the reserve fund is probably the best way to go. Others have sent me comments that hinted in the same direction. I will amend the whitepaper accordingly. Thanks a lot :pray:

PS: On top, the dividend mechanism had tax issues because administrations could consider that receiving dividends is a taxable event… which would not be ideal. The simpler, the better.