AMM rewards directly to stake

Looking back @lactarius (in july 21) asked a similar question but was told it was impossible.(I believe it wasn’t quite understood and AMM wasn’t specified) it never gained traction. I’m not sure if this is exactly what he/she had in mond.

I had recently mentioned with some interest and listening to the community call, a member during the Q/a (tom) brought up an Idea that some rewards (for those interested in staking rewards) could be directly staked instead of waiting and vesting for 10 months (at 10% rate) only to stake once liquid

@Ororo seemed to think it could be done… but hesitated when multiple options/complexities were presented, presumably from the work that would entail.

What if at AMM withdrawal ONE option to add rewards to current stake is offered?

claim rewards —> a)add to your current stake or b)vest for 10 months

for those who wanted to stake some but not all, it can be done manually. ie if I wanted to directly stake 25% of my rewards, over 4 withdrawals (say 4 weeks) I would stake one week, vest 3 weeks.

positives:

  • those of us that stake some or all of mining rewards would not have to wait 10months to stake rewards and all the benefits of staking
  • instant increase voting power
  • more incentive to LP and transfer to stake, get rewarded now.
  • more SOV locked in stake at much a faster rate, possibly exponential.
  • would decrease the vested coins and potentially decrease the bi weekly selloff when rewards are released.
  • more staked coins deflationary, could help price. (thoughts circle of tokens @Sacro @dseroy ? )

Negatives:

  • dev work involved (I have no idea)
  • what else? please share

Interested in what the community thinks
thanks for reading

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What’s the fundamental value of the SOV token?

-SOV stakers receive btc revenue on a weekly basis, depending on platform volume.
-governance power / protocol ownership.
-all kinds of speculative premiums.

The amount of SOV that’s available for staking has an impact on how profitable staking is. If there are 10 million SOV staked, revenue per token is smaller than when there are only 1 million SOV staked.

The staking payouts set a fundamental price floor for the token. We want the number of staked tokens to increase over time, but ideally, it should not increase much faster than protocol revenue increases as this would most likely have a negative impact on the token price.
If you get 0.1% of your SOV investment paid out per week in btc thats more attractive than getting only 0.01% right? People will be interested to buy SOV for 0.1% payout per week but won’t even look at 0.01%.

In general i agree that we should do something about vesting, but we need to consider the downsides. Here is see the problem that we’d dramatically increase the voluntary staked tokens, reducing BTC payouts per token even more. This would justify much lower SOV prices because the SOV token provides less btc payout per token.

But in general i like the idea of having an option besides letting the SOV rewards vest for 10 months. I could see your idea work when there’s a significant reduction of rewards if chosen your option A) instead of option B).

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Agreed.

Ororo mentioned it would be easy to change the portion of tokens that get vested vs. paid upfront. So we could toy with that in the coming months and eventually pushed towards a higher proportion of liquid rewards then see how community reacts.

I also think this brings up a future discussion that at some point we’ll need to cancel SIP24 Liquid staking rewards. Anyone that is currently staked will have the reward payouts honored, but we don’t want to get into a situation where whale vesting contracts start unlocking then they ape into Bitocracy to get SIP24 20%-30% APY without regard for the rBTC fees. This would massively dilute down the APY value and the rich get richer. Not something we need to address immediately, but probably in the medium term we’ll want to start turning SIP24 down or off.

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Indeed, as you say, I asked at the time and exiledsurfer answered me “This will not be an option”. I didn’t know why.

This question that you are asking yourself and that I asked myself has been asked by many more people over the last year in telegram and on discord.

We all understand that the claimed rewards that remain vested 10% per month, could only go to voluntary stake at that rate. Taking that for granted I don’t see why everyone can’t decide at the time of the claim. It certainly requires a development to allow it.

Regarding what Sacro says, about the more sov in stake the less return you are going to get, unless the protocol income increases at the same rate, let’s think about it.

On the one hand there are the sov holders. If someone wants to stake their sov, that’s their decision, and no one can stop them. And if that causes the return per token to fall for all stakers, some will cease to be stakers, and an invisible hand will balance everyone’s interests.

On the other hand, there are Sovryn users (with or without sov), who are only thinking about maximising their use of the protocol by paying for it. Sovryn should offer the best possible non KYC DEFI.

From my point of view, the objective is to respond to the latter, because they will guarantee the flow of income to the former. We have to offer more products, lower costs and privilege the users. This would increase interest, the volume of users and funds, and the performance of the stakers. There are only 100 million sov.

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If I understand @Sacro correctly, we would be concerned that there would be more stakers to fast. I would consider that more stakers and commitment to the protocol is the goal (even at the cost of diluted rewards in the short term)

@dseroy, I wouldn’t suggest shortening the vesting contract or unlocking anything (it seems the complexity of that is immense). The pathway to liquid SOV stays the same (10month vest) The new suggestion is just a 1 step pathway for stakers to commit mined sov to the protocol and gain rewards (or pay the penalties for
Release from stake), since sip 24 there is essentially no use of your mined tokens for 10months… the the advertised apy is misleading. IMHO It is a big turnoff to new users.

More incentive to stake → more involment of lp-> More stakers → less free sov → price of token more stable → more attractive to new users → more revenue in the long term.

Ultimately the goal is more users and growth, I wouldn’t be worried about sharing my portion of the staked revenue pool for growth and price stability. As @lactarius said, the goal is the best experience on defi to bring users. Inproved options for the 10month stake, I think would be a big one.

Thanks for engaging in the conversation all

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More staked SOV does not necessarily mean more stakers. It could also be the same amount of stakers who simply own more SOV. That would make staking and staking rewards for new users less attractive.

We want more stakers for sure, but we might not want too much SOV staked by the same people too fast.

Incentivizing token lockups with more of the same token is a ponzi. It will not work over a longer timeframe. SIP-24 is not meant to run forever. The value of SOV is bound to the BTC rewards that the protocol generates and not the additional SOV payouts. If the BTC rewards get diluted too quickly, it will be painful and more locked tokens will not change this because new token supply keeps coming onto the market, even more so when tokens get staked faster.

If we’d implement your suggestion (which i like overall), we’d have to cut off SIP-24 liquid SOV for stakers first.

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