Staking Model 1 after expiry of Gzil rewards

Summary:

At the end of GZIL rewards period, it is proposed to implement a new staking model securing the interest of current stakers by changing the percentage of rewards by linking the new model with the existing ongoing reward model plus the pledge duration of staking

Abstract:

The summary of the revised model is provided by providing an example:

Current existing % reward criteria:

% of circulating supply staked i.e. approximately 34% at the time of staking with approximately 12.5% Apy rewards plus gzil reward

New model after expiry of GZIL reward : The new proposed model will link two criteria:

i) % of circulating supply staked (as per current staking model)

ii) Pledge duration of staked tokens

Example:

a) Pledge ( promised ) duration to stake zil by staker : 1 month

% of reward : (Apy As per existing model) x ( .8)

As of today: (12.5%) x (.8) = 10% Apy rewards

Note:

  1. After 1 month pledge, staker can unstake tokens at anytime

  2. For early unstaking ( before 1 month) , 5% penalty on unstaking amount of zil which shall be used to buy GZIl from the market and burnt

Multiple scenarios can be developed based on the above principle with the least above and maximum pledge period below:

b) Pledge ( promised ) duration by staker : 6 months

% of reward : (Apy As per existing model) x ( 2)

As of today: (12.5%) x (2) = 25% Apy rewards

Motivation:

  1. Effectively resolve all the problems by allowing early unstaking ( after unpledge period), concerns about loss of stakers after Gzil reward expiry, incentivise long term investers with practically getting approximately same rewards as now i.e. 2 times reward as per existing Apy ( see above example)

Specification:

Current existing model will be upgraded with some additional implementation of checks as per enhanced conditions summarise above.

For:

  1. Keep stakers interested with high Apy ( to compensate the loss of Gzil reward)

  2. Early withdrawal after pledge period

  3. 5% penalty to burn gzil ( after buying from the market)

Against:

  1. 5% penalty for early unstaking during pledged period

Poll:

2 Likes

I agree that we need to do something to the staking once Gzil reward stop. Without Gzil reward and with the 14 days unstaking period, we are going to lose stalkers.

Your proposal on locking staking period with 1 mth and 6mth with different APY and penalty on early withdrawal is good but the APY for 6 mth does not make it attractive.

The penalty for early withdrawal goes towards burning of Gzil and the intent is to increase gzil price? I am not sure whether Gzil eventually will suffer the same fate as zwap with price dropping forever. GZIL need to have a better use case other than voting rights and burning gzil might not raose the price.

Anyway, thank you for starting this discussion as I agree we need a review on staking when gzil reward stop.

2 Likes

Iā€™m personally not a fan of any divergence in apy for a time pledge. I like current structure.

Am a fan of penalty for early unbonding to provide that option

1 Like

Keep the APY Very high, with slow slow release of the reward tokens and not release them every block like they are doing now. So, the stakers will be interested.
But at the same time also make early unbounding painful with with a high penalty of atleast 10%.

If ZIl pump 200-300% LOTS of people will unbound and dump taking the small 5% penalty. It should be atleast 10% and that penalty should be used to market buy gZIL automatically and send it to Frozen address.

It is indeed important to address the issue of staking APY in the post GZil era to retain a high level of interest in Zilliqa tokens. In principle, your proposal definitely has the potential to retain the current long-term staking interest in my opinion. However, I would like to suggest the following tweaks:

Staking Period APY Early Withdrawal Penalty (EWP) Unstaking Period (UP)
30 days 12% 5.0% None
90 days 18% 7.5% None
180 days+ 24% 10.0% None

  • The staking rewards are paid on a daily basis - as being done at present
  • EWP can be distributed to GZil holders as an additional reward (burning GZil will reduce the circulation supply which may lead to a few whales controlling the network over a long period of time)
  • Allow GZil staking as well at a flat rate of 10% with a minimum staking period 120/180 days with an EWP of 10% which should also be distributed to GZil holders

Finally, I agree that it is critical to bring a strong use for GZil to encourage a wider holding base to uphold the core values of a decentralised network.

1 Like