What is (3,3) and (1,1)?
This has become sort of a crypto meme in recent times, so let us explain. (3,3) is the idea that if everyone cooperated in Nemesis it would generate the greatest gain for everyone (from a game theory standpoint).
Currently, there are three actions a user can take:
Staking (+2)
Bonding (+1)
Selling (-2)
Staking and bonding are considered beneficial to the protocol, while selling is considered detrimental. Staking and selling will also cause a price move, while bonding does not (we consider buying NMS from the market as a prerequisite of staking, thus causing a price move).
If both actions are beneficial, the actor who moves price also gets half of the benefit (+1). If both actions are contradictory, the bad actor who moves price gets half of the benefit (+1), while the good actor who moves price gets half of the downside (-1). If both actions are detrimental, which implies both actors are selling, they both get half of the downside (-1).
Thus, given two actors, all scenarios of what they could do and the effect on the protocol are shown here:
If we both stake (3, 3), it is the best thing for both of us and the protocol (3 + 3 = 6).
If one of us stakes and the other one bonds, it is also great because staking takes NMS off market and puts it into the protocol, while bonding provides liquidity and BUSD for the treasury (3 + 1 = 4).
When one of us sells, it diminishes effort of the other one who stakes or bonds (1 - 1 = 0).
When we both sell, it creates the worst outcome for both of us and the protocol (-3 - 3 = -6).
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