As Hugh has flagged, a reduction in the 90 day lock-up period is planned for ‘Staking 3.0’. However, the full implementation will still take some time. I propose reducing the 90d lock-up period to 30d ahead of the full implementation for the following reasons:
-The 90d lock-up period has driven a low level of staking participation on the platform, and we are in a less than optimal situation where users prefer to find equivalent or better yield on wNXM via LPing on AMMs without the issue of illiquidity. Low staking participation fundamentally slows the growth of the NXM platform to provide more breadth of cover, but in my view, is also putting off new capital entering the mutual to find yield and capital appreciation. Speculators would prefer to hold wNXM and find yield outside of the platform. Speaking openly, as a long term participant and holder of NXM I personally do not see the illiquidity trade-off as sufficient at current staking yields, but would be interested in staking if this was reduced to 30d.
-The development of a yNXM vault with yearn is in progress and this requires the vault to be able to withdraw staked capital on NXM with more flexibility than 90d. This vault has the potential to bring multiple short-term benefits to NXM including a) supply of ETH capital to help improve the buffer on the MCR% above 100%, b) increase the breadth of contracts staked to allow NXM to enter a lateral phase of growth and c) enable greater coverage purchase by other vaults for their own strategy. The vault design has been created and is in progress, but the developers require a 30d lock-up period in order to deploy test vaults for the strategy and this cannot be progressed further at this stake. In order to streamline this process and accelerate the benefits of integrating further with yearn, a change to the lock-up period is required sooner than the full launch of ‘Staking 3.0’.
@Hugh I would be interested in your views on any constraints and risks we may need to consider on reducing this lock-up period, and whether this would be possible to implement ahead of the full launch of ‘Staking 3.0’ in order to attract new capital, encourage more staking on the platform and allow the development of the yNXM vault.