[Closed] AIP 003: Reward Locking Mechanism

Author(s): The Akropolis Team

TLDR

  • To incentivize long-term holding of ADEL and reduce sell-side pressure we believe that rewards should be vested with the ability to claim weekly or monthly vs the current daily structure.

Summary

Vest all the rewards for one year with possibility of weekly (1/52) or monthly (1/12) withdrawal. All rewards can be automatically staked into Delphi pools to compound user reward yield.

Rationale

In order to further align incentives with the ongoing project, we propose the addition of vesting to the emissions of the governance token. Delphi is not a farming initiative, and the distribution to this point has been done with whitelists and then caps with the purpose of having the fairest distribution possible. Moving forward, we believe a vesting schedule for newly distributed ADEL will be the correct manner to keep incentives aligned to the project as our TVL gets larger and new products come to market.


How to?

  • Rewards are locked into a vesting contract and are seen in UI but can’t be moved.
  • A portion of them can be unlocked weekly or monthly with 12 months total vesting.
  • Unlocked rewards can be automatically transferred into your staking contract (as an option), to compound reward yield.

Options:

  1. Ability to claim weekly
  2. Ability to claim monthly
  3. Ability to claim quarterly
  • Ability to claim weekly
  • Ability to claim monthly
  • Ability to claim quarterly

0 voters

17 Likes

Sounds good, but will it be an opt-in or a must for all rewards?

1 Like

Great ideas again!! :smiley:
I think a mechanism can be introduced such that a percentage of rewards(lets say 70 %) are claimable on Prorata basis over the period of a month. Rest of the awards are claimable on prorata basis over an year.

I like the idea. For example user can chose weekly or monthly withdraw. If you chose weekly no bonus, if you chose monthly you have 2% bonus. Rewards must be shown in the My Harvest tap, but withdrawal only weekly or monthly (what user chose)

2 Likes

It’s “must all” rewards that partly was taken from SNX model (they have 365 day lock for rewards). We believe that there is no model for rewards tokens was made in the recent months and if it’s inflated token - it’s getting dumped by “farmers”. Creating vesting will help community to stick together and motivate to contribute to the project

7 Likes

I like the ability to claim monthly, but can it be programmed so that each individual can withdraw 30 days after they initially opt in? This would make the sell pressure much less concentrated around a specific monthly date.

4 Likes

well, now It doesn’t look like incentivizing of long term holding.
incentivizing is like banks do it: “lock asset - get better apy” or “longer you hold - better apy”
“lock you rewards with vesting 1/52 and get 5% more. lock you rewards with vesting 1/12 and get 10% more.”
you can actually reduce rewards on ~7% so you will not need to pay more

9 Likes

Right- is there a way to further incentivize these vesting period(s) by introducing additional rewards v. time vested/longer period staked/held? Sort of like what @ad13 has mentioned.

Edit: I should note that I’m all for this proposal irrespective of immediate incentivization of vesting periods, as they could be introduced at a later period. I already keep my harvests in Delphi weekly before withdrawing.

1 Like

As I described above, it’s not a boost - it changes the model. Current model are extremely short-term focused without any incentives for long term success of the project. As additional incentives claimed rewards can be staked on your behalf to reduce gas fees for users

2 Likes

A must for vesting rewards. We will propose opt-in lock up bonuses in a later proposal. :slight_smile:

2 Likes

Yep, as mentioned another proposal to boost for locking up ADEL for longer periods of time will come soon :slight_smile:

1 Like

So we can increase-decrease rewards later because we will be restructuring anyway but its not like: vested = more

I like the vesting model, but vesting the rewards from a single epoch for 12 moths, way too long. If we want vesting I believe it should be for no more than 4-8 weeks after the end of the epoch/week.
Example: For epochs 5 I got 50 Adel as rewards: 12,5 of those tokens will be unlocked in the each beginning of epoch 6,7,8,9 and 10.

https://twitter.com/rewkang/status/1279447642414538752?s=21 here is the SNX model we are talking about

Second post:

people must have the opportunity to chose for how much to lock their rewards and the have option to claim some of their earnings, because small stakers gonna wait so much

2 Likes

Agreed :+1: . The current structure is not removing supply from circulation and has so far just allowed speculators who dont care about the project to quickly profit and move on.

1 Like

I like the idea of locking very much and was a very early proponent of it.

I want to further flesh this out by proposing some additional rules/ideas:

  1. Staked tokens are short locked (max. 1 week) to prevent so called “snapshotting”. Snapshotting is when people stake tokens short before a snapshot is taken and immediately withdraw it after the snapshot has been taken. The usual procedure is that people flash loan a large sum of tokens, supply them to the pool, grab a major share of rewards and immediately return the loan for minimal interest.

  2. No boosting mechanics whatsoever. If you want more rewards buy tokens from circulation and stake them. People dumped ARKO and ADEL hard the last couple weeks and one of our main goals should be to increase buy pressure on the tokens in open circulation. Boosting has two negative effects on this: First, it allows early whales to increase their yield without actively participating in the token market. Unlocked rewards would likely not be restaked but dumped, which defeats the purpose of our locking mechanics to a certain degree. Second, locking staked tokens for a long time actually discourages further staking. If you lock staked tokens for 12 months you are not very inclined to add additional tokens 4 months down the line because those would be locked way longer than your initial stake. Regularly restaking would become very confusing and frustrating since you would end up with an arbitrary amount of different unlock times on your stake. Changing pools would be expensive and annoying and it would be very hard to understand for less experienced people.

  3. Additional rewards like fee share or third party gov tokens are unlocked immediately. This is important for reason number…

  4. We combine this with yEarn like vault strategies where third party tokens are used to further boost yield (like locking CRV) and paying gas for strategies (like restaking, locking, moving to other contracts, and so on.)

All in all this is all about creating a dedicated and active community that creates value together in cooperation instead of fighting for yield against each other. We all love high APY and I want our pools to pay huge APY but in a sustainable manner. No pump and dump! For that we do not need crazy yield farmers that burn down tokens in a matter of days but dedicated people who believe in the Delphi platforms and Akropolis projects long term success. We archive this by not paying out the huge yield immediately but giving it out in small chunks over a longer time frame.

The idea is that if you are currently waiting for your rewards to be paid out in future you have no reason (and not enough rewards available) to walk away from the source but rather stay and continue to increase your yield where you are.

7 Likes

Sorry, not sure I understand. Staking itself removing tokens from circulation.

yes, it’s good
and we should sell it to user the same way.
not like “we don’t give you your rewards, we lock them and you will receive it by small parts”, but like “auto restacking your rewards and ability to claim it by parts will drastically increase your rewards and you will get ~50% more just by doing nothing and claiming rewards by parts”
and few memes with ugly guy or frog

1 Like

I love it guys! Now what if we had a bonus in % increase every 3 months for consistency. I believe keeping the year spread out with evenly distributed increasing bonus’ will hold peoples interests. Equally spread out through the year as incentive to hold the whole year. Max cap one year and start over if people want to re vest their tokens. Keep up the great work guys! :+1: