Staking Rewards ideas

The current staking rewards are a great start and I think there can be some tweaks to improve the effectiveness.

The quadratic formula for determining staking rewards is an excellent concept which rewards long-term thinking. However, I offer up a few ideas to better align the risk/reward.

  1. Perhaps there could be an option to perpetually maintain the original staking term, so that the weight is maintained. For example, if I staked for 1 year, a checkbox on the staking tab which fixes my staking weight at the one-year value, until I generate another transaction to “un-check”.

True, you can accomplish #1 above by continually restaking, however this requires continual maintenance of the stake, and additional fees to extend, (which may be greater than the staking rewards)

  1. Another alternative would be to utilize the quadratic formula to determine the initial weight, but freeze that weight for the duration of the stake. For example, if I commit to 3 years, I get 10x weight every period for the full three years. So in the last two weeks of my stake, I will still be rewarded as a long-term staker, and not treated similarly to the guy who just staked for 2 weeks.

  2. Another alternative would be to subsidize the ramp up period through some type of a floor APY rate. SOV must balance creating the right economic incentives, with the fact that there is a competition for capital. SOV shouldn’t necessarily compete with some of the high APY’s out there, but a floor of a couple % may at least give the community something tangible to fall back on as the current fees and rewards are a bit of a mystery to the average user. The floor rate could be amortized away over time.

I’m sure there are plenty of other ideas out there.

The important thing is that we continually tweak as required to keep the excitement high and capital flowing in this ramp phase, while maintaining the economic integrity of the project.

My two sats.


Excellent input, Mike.

1 Like