Right now someone who has an 8 yr neuron non-dissolving gets 13.3% APY a 4 year non-dissolving neuron gets 10% a year, and a 6 mo neuron gets 7.1% and this doesn’t seem to make sense with the general benefit to the network. How is it that an 8 year commitment gets a reward that isn’t even double that of a 6 month commitment?
Shouldn’t this be immediately improved? I propose a staking reward structure that takes into account risks/rewards. In rough terms, keeping the 8 year neuron with the same rewards, i propose a sharper (non-linear drop off) with 2% apy for a 6 mo neuron, a 5% apy for a 4 year neuron, 8% apy for a 6 yr neuron, and 13.3 for the 8r neuron. (the math should be inferred, i’m not mathematical, but its roughly a non-linear function that accelerates after the 4 year mark, indicating a significant “skin in the game” stake period.
This would do 2 things. 1. Reduce ICP inflation. 2. Incentivize longer term staking and longer term price growth since people who stake for 6 months don’t really care for the networks long term lifespan.
Also max age bonus should also scale with dissolve delay. A 6mo neuron should have a max age bonus of 1.1, and an 8 yr should reach a bonus of 2 within 8 years imo.
It doesn’t make sense. A lot of these rules were loosely agreed on years ago and then people have started gaming the rules and introduced a lot of friction to change.
People with literally no skin in the game other than owning liquid ICP are getting a huge part of the vote here, something has to be done.
I don’t see a good reason today for giving 7% for 6 month staking either. Its not just high, its way too high and generous. At best, 7% should be a promotional APY after the promotion ends, we bring people back to reality.
We have DeFi for the people looking to hold ICP for 6-months… those people can provide liquidity in a dex, there isn’t a need or want to have those people participate in network governance with that type of horizon
Wouldn’t @KongSwap@ICPSwap@cakemaker1 support removing 6-month staking or anything else less than 8-years? More ICP floating around for liquidity without the 6-month governance stakers drying it up. Liquid stakers like @WaterNeuron and @infu (just came up with a revolutionary liquid staking idea that will change the game) could conceivably be flooded with more stakers to there platforms too.
Maybe we have a massive amount of support for only having 8-year staking?
I think there’s a lot of (8y staking) guys who don’t plan to ever start dissolving - showing much stronger commitment to the ICP ecosystem than those staking for shorter periods (or 8y planning to start dissolving once).
So I think the ‘smallest’ and most convenient change in the tokenomics which could be done is to allow these investors to ‘burn’ ICP in their 8y staked Neuron while increasing the Neuron rewards (how much would subject of deliberation).
This would:
Burn a ton of ICP
decreasing ICP Total Supply
decreasing short-term inflation - could even turn into deflation
might have continuous effect (new ‘committed’ members of ICP community )
Really reward the Committed long term stakers - ICP true supporters
Indeed question is if the overall long-term inflation would decrease or increase, I’m sure, in the deliberation, there would be a lot of math, but also the easy way might be to keep control over the ‘burned’ Neurons rewards multiplier via continuous NNS proposals - based on current ICP inflation development
multiplier can be high (much more rewards) if only a few stakers join
multiplier can be low (little more rewards) if a lot of stakers join
Because I can’t edit my post (even to fix typos) I have to add extra one, probably will be again hidden , but good is that I used to do sysadm so indeed to chat with the system
Another option (how to more appreciate committed stakers) is to increase max possible Age bonus (for 8y staked Neurons) - but this would miss the burn ICP and decrease inflation effect/momentum, neuron could still start dissolving and there might be a threat of eventual too high voting power - same would apply to increase of Age or Dissolve Delay bonus for burned Neuron.
While in my suggestion, the rewards multiplier could be decoupled from voting power - used by NNS only to multiply the rewards counted with voting power
8 year stakers will turn into forever dumping people if we keep increasing rewards. Only way to fix inflation is to fix the amount of ICP in % is given to every tier staker (6M to 8Y). Then let market regulate itself in how many people will stake for 8Y if every new added amount will decrease rewards.
3% max supply increase a year + node provider rewards.
Well 8y (and all other) stakers already are forever dumping people - that’s why they stake, but if you let them burn the staked ICP - even with then increased rewards, it will take several years just to mint the ICP they had burned - till then it’s clearly deflationary mechanism. And by that time, if ICP is successful, the native burning (by network usage) will easily regulate this kind of rewards increase (and by that time, if ICP is not successful, there’s not much to talk about).
It think there is a misunderstanding, I’m not talking or touching current staking at all but rather suggesting option to burn ICP (for 8y stakers) - which is nothing like a restate, it’s simply a possible different approach. Also not sure what numbers you mean, I suggested to keep the rewards multiplier dynamically changing based on evolvement of inflation…
You suggest to give neuron holder to burn ICP in echange to more stacking rewards. Thats essentially what restacking does. You can call that a different approach, the result is the same.
You mentioned buring ICP to increase rewards. Here are the numbers, how much ICP to burn to get how much reward multiplier ?
Not going to post more in any slow mode topic (because it makes effective discussion impossible), just to clarify here, these would be effects of what I suggest - automatic staking has none of those so also from this point of view it’s something completely different, also note that if you rely just on automatic staking, you basically don’t get any rewards (which can get you food, accommodation…) at all, which is extremely important when talking about real ‘rewards’:
NOTE: also true supporters do expect real rewards from their investment
For the numbers, how much ICP to burn has no relation to the reward multiplier - that is fully subject of a community deliberation and agreement on how much should be people, who burn their staked ICP (everyone in the community would be gaining from that), rewarded, while keeping the inflation still low
Check out what rewards other blockchains with much more adoption than ICP are giving to their stakers for 21 days or less.ICP does not exist in isolation of the rest of crypto. It must compete with other blockchain from an economics perspective.
My opinion is that 8 years is too long for staking. I would be comfortable with the current crypto standards of no more than 30 days.
8 year neuron reward used to be 27%,now its 13%.The design is working as intended because it goes down every year. 6 month staking on the other hand appears flawed.Unless we do something now, the gap between an 8 year neuron reward and 6 month will be even smaller.
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