Encourage Developers to reward STAKE holders!
J
J
The value proposition of the STAKE token can be improved by giving additional incentive. Currently, the incentive to buy and hold is to receive more tokens, but because these are the same tokens, the idea is that you "get more to sell more," which is fine but kind of a surface level application of staking, and perhaps not appealing enough for the masses. Because STAKE is unique in that it is a network token but not the base pair/gas token, the additional utility should also be unique (strengthened) to compensate.
What would be nice is if there were also rewards in the form of other tokens. POAP did this with the NFT drop for delegators, but why not encourage incoming projects to airdrop tokens to holders and delegators/validators (with the latter two perhaps getting a larger share)? Take an honest look at what TrustSwap does for a brilliant example of this. Projects that use their service airdrop tokens to Swap holders. As such, most holders wouldn't dream of selling unless we entered a bear market or the price went up another 100x.
I could see two scenarios here (but why not both?):
- Encourage incoming projects to reward STAKE holders/delegators/validators with tokens
- Just encourage IDOs to do this
As for how xDai can convince projects to do this, I am not privy to such knowledge but I would imagine that the idea is we are building an image of STAKE holders as xDai network enthusiasts who are already onboarded and active in the ecosystem, and growing that group will simultaneously grow the market for projects that launch on chain. Additionally and perhaps more importantly, it would drive new users to xDai to claim rewards, which would bring liquidity and attention to projects, especially the early movers as they would have less competition until the network/ecosystem matures.
- Justa
Igor Barinov
> Encourage incoming projects to reward STAKE holders/delegators/validators with tokens
what's the mechanic here?
> Just encourage IDOs to do this
Encourage IDO in STAKE, right?
J
J
Igor Barinov:
> Encourage IDO in STAKE, right?
Yes, encouraging IDOs that launch on xDai to have STAKE as a main pair would be a great starting point, imo. If I was launching a project on xDai, I would want to raise funds in STAKE and be a delegator/validator to have a regular stream of income (from the rewards). Maybe xDai can somehow make this very streamlined for projects who do choose STAKE as their base pair, and/or add some additional perk for them.
> what's the mechanic here?
The mechanic usually is that a service is being provided in exchange for the airdropped tokens, but I realized that xDai is a chain and not a service...
However, I had a couple of alternative ideas after reading the response from Mojmir :
- Maybe xDai can offer to purchase tokens in bulk at a discounted rate* from onboarding projects and place these tokens in a vault that on-chain delegators can access
- This vault could have a time lock/release so delegators won't be a threat to just dump at once
- Access to the vault could be controlled via NFTs that correspond to some attributes of each holder (initial delegation timestamp, for example)
- Delegators vote on which tokens would be featured and/or the purchase share
Why would xDai do this?
A: it will encourage users to buy and delegate STAKE to access the NFT/vault equivalent of airdrops, and it will encourage projects to appeal to STAKE holders specifically so that their token gets featured (and bought more by xDai, proportionally, compared to the others)
Why would projects do this?
A: they would have immediate financial compensation and they would bring attention to their project while being somewhat shielded from the typical airdrop selloff events
*As an alternative:
- Maybe an index fund/ETF of on-chain tokens can be created, with regular payouts to STAKE delegator wallets, with the fund purchase amounts tied to the TVL in the delegating pools. This could have a similar effect to the NFT vault idea.
J
J
I wanted to add a couple of extra points here:
- Another point of encouragement for projects is of course the benefit that a high STAKE price has in terms of keeping the network secure against bad actors.
- As another example of projects/companies doing the airdrop thing for holders of other tokens, we can look at what Binance is doing with BNB/CHR. The latter went absolutely parabolic because of this, and it resulted in mutually beneficial product awareness between them, the exchange and the new project/token (ALICE). So this can be used as a PoC, I suppose.
Mojmir
Hi Justa,
I like the idea of extra rewards for the people delegating especially as it seems to be quite a small group of hardcore fans of the project because the number of delegators is settled around 220 with around 520K delegated STAKE. These figures are not changing much in the last couple of weeks.
It is therefore clear that there needs to be some extra incentives to drive people to become delegators because then there is a high probability that these people will stay within the ecosystem boosting further growth.
I am not familiar with the TrustSwap model so I need to check it out but the main question here seems to be; how do you encourage incoming projects to reward STAKE holders - I am not sure how exactly this could be done.
This seems to be a similar ''issue'' as to how do you encourage new projects migrating to xDai to become validators. I don't think that demanding this/forcing them is the way and maybe as more and more projects migrate more and more will want to become validators as time goes. We could see this on 1hive example - HoneySwap was up and running for quite sometime before the 1hive become a validator.
I also like the Bao model where the rewards on xDai are higher (obvious reasons) compared to mainnet causing the inflow of assets and new people into the ecosystem.
But to stop the off-topic. I agree that STAKE delegators could be seen as pioneers and direct contributors to the network and we should try to increase their number.
NFTs are booming and with the dedicated NFT bridge between xDai and ETH coming soon I agree that extra rewards in the form of unique NFT could be a cool thing to have.
Maybe some model where you have a special edition of let's say 5 different POAPs and delegators can earn them once they are delegating for a predefined number of epochs?
10 epochs = 1. level
20 epochs = 2. level etc.
Also, it wouldn't matter how much you have delegated in the single pool, if 200 or 2000, the eligibility would depend on each pool separately. This would encourage you to spread your STAKE into different pools as much as possible because each pool would be ''earning'' you NFTs as time goes.
This could further boost the even spread of delegators and STAKE tokens in all the pools plus you have another incentive to buy STAKE and to keep it delegated for a longer period of time.