EIP-18: Pro-Rated Premium
EIP-16 successfully made coupons less risky, however with the current mechanism, there’s little incentive to buy coupons early. When coupons are purchased, premium is fixed. This means purchasing at the start of a contraction yields the same return as right before a contraction is complete. We’d like to mitigate this behavior by ensuring that purchasing coupons early results in a higher relative reward.
On redeem the premium portion of the user’s coupon will be pro-rated by the time their ESD was locked.
redeemedPremium = premium * (lastContractionEpoch - couponEpoch) / 90
We will add a new state variable that tracks whether we’re in contraction or expansion, and which epoch the current era started. This information will also be useful to enable other mechanics (e.g. locks based on eras).
From this data we can modify the computation for redeeming coupons. Leftover redeemable from non-pro-rated premium will get swept to bonded by the same code path that expires coupons.
This change will result in lower premiums unless coupons are locked for the full 90 epochs, which would be unfair to impose on existing coupon holders. As a result this update will be effective as of a specified epoch after the proposal is committed.