I am not sure if my understanding of the formula is perfect, but I do believe that it works in a way that incentivizes a commitment to the long term health and growth of Balanced.
I am excited for this proposal!
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Quick question about implementation:
If this enhancement went through, would BALN staked conventionally be unstaked automatically?
theres a lot go over jumping in at this stage, 62 replies. Are there any changes to the initial post, or is it the same ?
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I think there were some suggestions for changes, but nothing that gained traction (I could be wrong).
There are some posts clarifying how it would work in different situations.
In the early days of balanced, allocation of voting rights and earning network fees was changed to include BALN in LP. I think that helped with ensuring liquidity in the pools and participation in governance.
This proposal brings Balanced back inline with the spirit of the white paper ~ having to “stake” BALN to gain voting rights and network fees.
Im all for it.
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Yeah we would probably unstake all the BALN then have people migrate to the lockups
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Question regarding the decay. Is staking new BALN required to reset the decay back to your choice time lockup? Or can you reset the decay without increasing your BALN stake?
You can reset the decay without increasing the BALN stake. If you want to increase the number of BALN locked, you’ll have two options:
Let’s imagine you have 100 BALN locked with 1.27 years remaining until unlock, and you want to lock another 15 BALN
1.) You can lock 15 additional BALN at the same expiration of the current 100, resulting in 115 BALN locked for 1.27 years
2.) You can lock the entire 115 BALN for longer than 1.27 years. So given the options we provide, you would need to lock the 115 BALN for either 2 years or 4 years.
Note: It is not possible to have different expirations. You can’t lock the additional 15 BALN for only 1 week, then have 100 BALN with 1.27 years left and 15 BALN with 1 week left. It must be all the same expiration
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Is there the option to unstake from say a 4year lockup? If so, what is the penalty for doing so, and do you gain additional voting weight for locking up your BALN ?
I’d suggest we vote on a penalty %
Anywhere from 5-50%
Penalty gets payed to the vBALN holders
Will increase returns for long term holders
Just for discussions sake, what if there was no decay? What if the vBALN increased the longer you stake your BALN, and the penalty for unstaking your BALN is getting your network fee bonus to 0, and removes any additional voting weight. Essentially a reset.
It would encourage people to see out their lockup term.
Thoughts?
One thing before I forget - @lifeofkaizen suggested bBALN (boosted BALN) instead of vBALN (didn’t even really have anything in mind here) on Discord and I liked it a lot, so we’re going to go with that unless there is strong opposition.
@BigBen I agree, let’s include a 50% penalty as a starting point then we can go from there.
I’m not exactly sure what you mean by this to be honest. If you can try to explain again that would be great.
If there is no decay, there is no incentive to re-lock your BALN until the lock period is over. People would lock for 4 years, then let it countdown to 0 before considering how long to lock again. With the decay, you lock for 4 years, then if you want to keep that benefit you need to keep re-locking for 4 years, meaning that your tokens are essentially always locked
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So I understand the decay. If you were to lock your BALN for 4 years, would you instantly receive the benefits of doing so? 1vBALN Per 1 BALN staked? Then the amount of vBALN decreases over time? As the vBALN decays does that mean your earning weight also reduces?
I like the base structure laid forth and all the details are easy to work out moving forward. Great work as always Scott and the balance team🙏🏻 -Colin W.
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I think a 10% penalty would be fair to pay to unstake for each year before the lockup period ends.
@benny_options- my feeling is that someone who locks up their BALN for 4 years is obviously taking a long-term view. I don’t know if I like the fact that someone has to constantly lock in again and again to get the same rewards. If someone has locked their BALN for 4 years and contributed to the DAO for 3 years, their rewards should be the same as someone coming across Balanced in 3 years time who then decides to lock in for 4 years from that stage. I think that a 4 year commitment in this space is a massive commitment but I like the incentive to do so. However I would suggest that instead of a decay of vBALN, it remains constant and when people restake, they get more vBALN.
Although my suggestion is not fully fledged, I do think that a decay may result in rewards dimishing so dramatically for those at the end of the lockup period who may need to cash out that it may leave a bitter taste in their mouth.
10% is too low.
The entire setup is to reward long term stakers.
10% is too cheap of a way out to continue claiming boosted rewards will still keeping a foot between the door for a quick exit. The 50% starting point Scott mentioned will make you think twice, as it should be.
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I’ve edited to say 10% per year that you exit early. So if you lockup for 4 years and you exit after 2 years, you pay 20%.
I agree with Steven. Having a 50% starting point is good. The whole point is to still give them the option to cash out but not let traders take advantage of the volatility of BALN to game it. In fact, it may be better not to have that feature at all.
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When can we look forward to this feature? Voting seems to be happening this week. Its an important and much needed revamp to the ecosystem.
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I propose penalty = bBALN, so thats 100% loss at 4 years left, 50% at 2 years left, and very little at 1 week left.
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Not necessarily.
Let me preface my explanation with: My understanding is limited, and I probably won’t explain this right. I may, in fact, be completely wrong. After posting I’ll try to follow up with an example using the formula to test my understanding.
Edit: below seems to hold true
Your earning weight is based off of the relationship between your values for LP/borrowed/vBALN and the total value of LP/borrowed/vBALN.
If nothing changes (no additions/subtractions) to those values, then your earning weight stays the same. because all vBALN is decaying at the same rate.
If there is a disproportionate increase in value for the total of LP/borrowed, then your boost will increase.
If there is a disproportionate decrease in value for the total of LP/borrowed, then your boost will decrease.
If there is a disproportionate increase in value for the total vBALN staked, then your boost will decrease.
If there is a disproportionate decrease in value for the total vBALN staked, then your boost will increase.
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