Considering a large proportion of the current cover outstanding is not 90 days long in duration I propose that we immediately remove the 90 day lock up period to encourage more staking and capital inflow in the short term. This can be implemented as a short term temporary change to stabilize the capital pool.
Once the immediate need for additional staking is met, I think moving towards a laddered approach of staking makes sense where stakers are incentivized differently based on the period of lock up. This can be addressed in the broader changes to staking Hugh has begun to flesh out.
To be clear this is for new staking not those who have staked already. This is to encourage NXM holders who have previously staked and chosen not to re-stake due to the lock up period, and encourage new entrants to participate in staking where they were deterred from doing so due to the 90 day lock up.
I think this is a great idea. Helps encourage additional staking while also potentially enabling some staking strategies to be developed because of the added flexibility
We can’t easily split the rate based on when someone has staked, that requires more development work. However, it should be quite easy to change the period for everyone from 90 days to something lower.
Technical issues aside I’m against having a different rate based on when people have staked. It doesn’t feel fair to me and punishes the early adopters who are staking.
On the basis that we’re lowering the 90 days for everyone, there are two main aspects to consider:
1. Is the increased risk worth it?
I don’t believe a lower lock period (using the current staking model) will work from a risk perspective long term. It opens up potential for long range attacks. However, there is a reasonable argument it’s ok on a shorter term basis in anticipation of moving to a new staking model. It does require that mutual members are relatively stringent on adding new protocols for coverage.
eg don’t add random new anon project that hasn’t add audits as soon as it gets released.
2. Do we think the net outcome on staking will be an increase?
There will be some staking outflow from people taking their newly released stakes, and there will be staking inflow from members who are now willing to stake. Hard to tell the net impact here, it would be great to hear comments on both sides of this.
If you’re not staking, would you stake more?
If you are staking, would you stop staking immediately?
Just to make sure we are on the same page I am not proposing a different rate (are we referring to staking reward by rate?) I am just proposing that from now until some period in the future (to be defined by reaching a satisfactory level of staked vs non-staked NXM?) any new stakers (no change to those who are currently staked) will not be subject to 90 day lock up periods.
To answer your second question, I am personally coming up to the end of my original 3 months staking period on some portion of my NXM, and I won’t be re-staking this if there is a 90 day lock up. If this were <30 days I would re-stake. In addition, I think those who are sitting with some portion of their NXM staked and some portion unstaked (to leave liquidity to sell if required) would be more encouraged to stake a larger proportion knowing they can have access to that liquidity in <30 days.
Got you - on the same page. If those who are in the unstaking period do not see this reduced to <90d (and can then just pull capital out, myself included) then I am in support of reducing the period for all stakers (both those who have staked already and those who have not).