Thanks for this post @kiriyha , I think this is a very important topic to discuss and I appreciate you creating this post. In hindsight, when i did my little rant on the discord, I should have just posted in here.
I just want to state/summarize my opinion before I go into solutioning and more details. I believe the whale is not doing anything wrong here other than exploiting a fundamental issue with LPs and not a feature. Some people are worried about interfering with DeFi, but innovating solutions (non-authoritative solutions) is a very normal thing to correct fundamental issues: the Ethereum London fork puts a max value on the amount a miner or staker can charge on a gas/trx fee.
My solutons?
I don’t really have one as this is an interesting problem. I think we need to go back to first principles thinking. First off, the goal of StakeWise is to increase TVL and appreciate the SWISE token value. Right now we are failing the 2nd value because this whale has the ability to dump 25M coins onto the market (although thy can’t because there is not enough liquidity, but this is furthering the issue that arose from this fundamental problem I am talking about).
So what is the fundamental problem? The problem is that a whale can easily (this is like a level 1 whale, wait until bigger ones come along) manipulate the protocol to grab the SWISE rewards for themselves.
First, if this goes on for more than a week, we have a serious fundamental issue going on here. If not, I don’t mind letting the storm pass and trying to use the treasury to future block whale attacks.
I don’t know how complex of a solution we can implement, but something like guard rails could help (no more than 1% drop in sETH2 price per day - American stock exchanges do the same thing and it protects the retail investor from massive flash crashes). We could also try maxing the number rewards a user can get in a month (I am not sure how popular this would be).
Removing SWISE rewards all together is another interesting move if we can get the votes. I also don’t want to scare the whale off because they do hold 10% of the sETH2 supply. Who knows, maybe the whale is willing to work with us.
In the meantime, I propose we move forward with my solution to re-invest rETH2 into sETH2 that we can use as firepower to try to block future whale attacks or at least try to slow them down.
^^ this is the most fruitful solution (that has an immediate action) that I can provide right now.
All is good though StakeWise DAO! I really think we can create a really innovative idea here. For now, i will do some more thinking around this issue.
Thanks homies!