There had been several discussions with regards to the unbonding period of staking Zilliqa tokens. This forum serves as a rightful discussion and poll to go ahead with the official proposal on Snapshot on the options observed.
Abstract:
The proposed change comes in 4 options which the MAJORITY of the vote percentage will enact the proposal. Criteria of 20% quorum and the majority of the vote to pass the proposal.
*In the event of an equal voting percentage, a new proposal between the equal majority percentages is proposed until there is a final decision.
Options:
No change (status quo)
Removal of the unbonding period (1-3 working days to change)
Amend from 14 to 7 days unbonding period (1-3 working days to change)
14 days unbonding remains but with an instant withdrawal option with a 10% penalty fee allocated to #GZIL holders based on tokens they hold (3-6 months to change)
Motivation:
The current 14 days came from the community choosing between a vote (Link: https://twitter.com/maqstik/status/1414629849822646281) with 39% voting for 1 month and 36% voted for no lock-up. So, an in-between was set up when staking was introduced.
With the recent price movement, it had been observed that staking lock-ups does not play a major role in the sell pressures. Some communities would prefer having to access their hard-earned invested tokens at their convenience or shorten the time frame. They believed that it will attract new investors in the long run. They may vote for option 2 or 3. Proof of poll: (Link: https://twitter.com/zillinkPower/status/1414590109823823881 )
Another group of the community prefers having a longer unbonding period as they are long-term investors and believe that the bonding period is necessary to reward them stakers. They may vote for option 1. This option will be status quo on the unbonding period for unstaking Zilliqa.
The last group of the community is the #Gzil holders who felt that the governance token of Zilliqa could have more utility and incentives long-term believers to have a say in the community. This also creates awareness of the importance of the governance token. This will also provide an option for stakers to instant unstake and reward the Gzil holders at the same time. This would be the 4th option.
The penalty percentages and unbonding period days may be contended or discussed after this vote had been confirmed while the Zilliqa core team takes 3-6 months to develop. If not, 10% instant withdrawal penalty and 14 days unbonding period will remain as it is once the Zilliqa core team gives the confirmation the development of the numbers cannot be changed unless another set of ZIP is required or proposed.
Specification:
Once the proposal is confirmed, the ultimate poll result will give a view of what the majority of the community wants and is looking forward to regarding Zilliqa token staking. The ultimate result will be the will of the most dedicated believers of this project! Implementation is stated based on the options time frame and executed by the Zilliqa Core DEVs.
Allow me to list some of the potential PROS & CONS:
1. No change (status quo)
Pros: NA
Cons: NA
2. Removal of the unbonding period (1-3 working days to change)
Pros:
Potentially attract new investors
Removal of the objection on a being a scam token
Strong community will prove itself like ADA token holders which do not need a staking period
Cons:
Potentially affect APR or buy/sell pressures on markets
3. Amend from 14 to 7 days unbonding period (1-3 working days to change)
Pros:
Increase comfortability for newer investors to stake
Fairer unstaking time frame as market moves would have already occurred during unstaking
Cons: NA
4. 14 days unbonding remains but with an instant withdrawal option with a 10% penalty fee allocated to #GZIL holders based on tokens they hold (3-6 months to change)
Pros:
Reward #Gzil holders
Create an awareness of the importance of holding #Gzil
Reward dedicated investors for the long run
Instant withdrawal option for stakers as alternative
Invitation to more stakers to stake and hodl both tokens
More diverse ecosystem
Cons:
Long development time
Time for development by Zilliqa DEV may be ābetterā utilized elsewhere?
I like option 4, the idea that you can potentially entice new holders to stake that were previous put off by the timeframe of a lockup yield be good.
I think people need to realise itās not just moonboiās that donāt want to wait two weeks for their capital to be released.
The idea that the long term holders can benefit is also beneficial. People will argue that the results should not go to gzil holders but if you were supporting and staking you should have gzil rewards.
I will like the next phase of staking to be more ambitious than what is proposed. Slightly changing the existing dynamics may not be worth the time and lack of novelty. It does not give Zilliqa a competitive edge. I will prefer to make killer innovation and make staking become the next catalyst for Zilliqa, like it was previously. We should keep the scope and timeline open (as long as reasonable) and ensure we have some new innovations.
Some ideas I have (may not or may be feasible based on given timeline),
Flash loan
āIron bankā like
Oracles
bonded stake
āLP likeā token
Oracles providers and verification
I personally feel option 4 should not be used for instant gratification for additional revenue for gZIL holders but it should be a phase where we jointly work together to make it a big catalyst. We can find other mechanism for incentivizing gZIL holders
For option 3, we can be more precise in the calculation of the number of days in term of block time. As seen recently, the block time is now much faster than before 2400 blocks a day vs 1900 a month ago.
Estimation of time is really hard.
2 different suggestion
Put a fix block number in the proposal with the closest estimate to 7 days. We still can say it is estimated to 7 days
Do a 7 days or 30 days (less any abnormal event like downtime) time weighted calculation of the block time before or after the proposal is passed. This can give us a good estimation based on the current status quo
Option #4 Gives GZil which is the Governance Token for the Zilliqa Platform some use case and utility. Currently GZil does nothing for its holders. This is fair because those that want immediate access to their staked tokens can get them and the people that contribute to security of the platform by staking earn some GZil and will rewarded by doing so. This will encourage more stakers on both sides. Many people choose not to stake because of the long inbounding period.
I recommend this as well. As mentioned before, people are already working on this feature. Will try to give an update in the next weeks when I know more. This wont take 3 - 6 months then but shorter and will also be tied to gZIL.
The 4th option seems to be a good one in terms of creating more value accrual to gZIL holders and could possibly result in stronger holders relative to the other options presented.
However, if the development effort for this takes a long period of time, I agree with what Jun Hao replied earlier in the thread that itās a better idea to instead look for more novel solutions that might bring even more utility to ZIL like bonded staking. Think bonded staking would also open up more opportunities for capital efficiency (i.e. use bonded ZIL as collaterals on Pillar, maybe use the minted PUSD to LP in a stablecoin pool on ZILSwap when the bridge is up).
Iām not a developer though so Iām not too sure about the resources and effort required for coming up with something like that. I just think itās probably more worth it in the long run if we have a more liquid staked ZIL as it unlocks even more utility as opposed to just added value to gZIL.
Dev perspective is always important.
In your opinion, how would you prioritize your ideas and what would be the āpessimisticā time frame for each?
I think investors will be interested in innovation.
Thanks!
I like the idea of a bonded stake, similar to stock options.
You can decide the length of time you are willing to stake your coins and have different APY associated to this.
For example, you decide to stake for 1 month you get a much lower APY than if you decide to stake for 1 year. Once your bonded time has passed, you can withdraw your stake at any time.
There could be an option to withdraw your stake before the end of your commitment with a penalty resulting in burnt tokens.
Ultimately, the staking was intended for long term holders and the 14-day is not a problem imo if your timeline is in years amd not in weeks.
There could also be different staking options depending on what type of holder you are that provides you with different benefits. I think long term investors should be rewarded over short term players.
To summarize, offer different bonding periods for staking and let the holder decide what works best for his/her investment strategy. Longer lock up period with higher APY and extra perks (could be a special nft after 1 year, 5 years, etc) and shorter lock up period with decreased APY.
Great ideas can come from non developers because we donāt know what the limitations are. There could be some good inspirations that devs can pick up on :).
I like the idea of penalty going to gzil holders. However 10% penalty for instant withdrawal is heavy penalty. I dont see many people could opt for instant withdrawal unless they have stake for a period with APR more than 10% gain or the token appreciiate more than 10%. Getting dev 3 to 6 months effort to make this change that is not likely to see much usage is waste of dev time.
The flash loans etc isnāt something I personally think would make the people who are not staking atm feel any better.
The examples you gave out of interest, is their code in place to allow other dapp devs to build such an idea or is the language missing in the smart contract currently?
I do believe the best option is a combination of fixed-term staking where reinforcement of the current contract does not affect the contract, meaning that you can continue to accumulate your stack under the current fixed-term period.
If you decide to terminate the fixed term period for any reason before it is finished the total amount earned in that fixed contract duration is distributed to GZIL holders as a penalty.
So itās not 10% or the amount someone is stacking but the earned amount on the period.
In terms of fixed term contracts you would be able to choose different time periods like 1 month, 3 months, 6 months or 1 year with variant APYs like 5%, 10%, 15% or 30%
This makes it more attractive to investors I presume.
Please focus on core development to attract projects in stead of pleasing traders who want to maximize their profits, the staking program is fine as it stands. Any āinvestorā is fine with the current unbonding period, if youāre trading then simply donāt stake. Have some respect to the value that the Zilliqa blockchain brings to the cryptospace and donāt compare it to Cardano. Weāre here to innovate, not to copy!