I’d like to start by saying that I’m not a math person, and nothing could make me happier than being wrong about this. I’ve been chewing on this for a while, but I was unsure of how to frame the issue.
I feel like the proposed bBALN curve ratios are squeued in a way that might ruin the appeal of staking BALN for “the vast majority” of people, which would in turn hurt the growth of BALN in terms of price, both in BALN/bnUSD and BALN/ICX.
What’s the incentive to hold/stake BALN? Given the limited supply of BALN, its low long term inflation, and the expectation of BalancedDAO generating more fees via new Icon assets being added, as well as more liquidity from other networks being available via BTP, the reason to hold or stake BALN is the expectation that the average person will be better off “at some point in the future” with 1000 BALN tokens staked (both in terms of BALN price & fees accrued) rather than 1000 ICX tokens staked (which right now is a better deal on average).
However, if a significant enough chunk of BALN whales were to lock up their tokens for 4 years, 2 years, or 1 year, it takes a huge (ginormous) chunk of fees out of the fee sharing pie for normal people. The more people there are that stake for a longer period of time, the less incentive there is to jump in the BALN staker pool in the first place, which means that people who aren’t willing to stake BALN will just sell it and swap into ICX by default.
Boo hoo might be a valid response, but as someone with a fairly big chunk of BALN that I’m open to having staked for a long time, I’d rather a normal person had a reason to buy and stake BALN because the fees were spread less unevenly, than me and a few others just gobbling all the fees up and cannibalizing any incentive for someone with less BALN than us to accumulate BALN at all.
Another way to think about it is that the “Boost” for people who lock up for 4 years compared to how things are now is a “Reduction” for people who don’t stake for longer than 1 week. 1 Balanced staked gives everyone the same amount atm. In the new system, 1 BALN staked for 7 days will only give you a fraction of what you get today (Unless nobody opts to lock in for a period longer than 1 week in the new system). How unhappy would most BALN stakers be if a few big whales who are happy to lock for 4 years because they’re financially secure enough to do that ”cut” the fees everyone else gets by several orders of magnitude? I get that bBALN also boosts rewards for loans, but is that itself enough to incentivise accumulating BALN for the average person?
I hope I’m missing something, but if this is a valid potential problem, a solution might be to tighten the bBALN reward curve, so that the difference between one persons BALN staking outcome and another is closer to the difference between restaking ICX per day, per month and per year.