Agree on this but with the upcoming event (unlock) I think it’s better to increase staking and increase the staking minimum bond. Increased rate will decrease
Overtime anyway as new stakers Start to come in…
User will have the ff options
- Sell all dots immediately (small percentage because of the current price is too low most pcl user are dot believers)
-Stake directly if they got 800d (I proposed this as a minimum bond)
-below 800d holders buy more to directly stake
-below 800d holders will join Defi staking pool (opportunity to explore the choosen defi app; so prepare your marketing strategies (free nft, trading competition etc.))
And as staking rate decrease over time now at least you have more users that possible to convert from just a user of staking pool to convert them to use your other products like LPs, trade bots, etc… (Think this staking era as a marketing expense.)
Realtalk we want to protect dot price as when it decrease and got out of top 15 coins people confidence, attention on it migh decrease and will affect your defi too long term.
@lolmcshizz raised a good point in Twitter to give a better understanding about the drop-off in staker APY in the case we overshoot the ideal staking rate. With the help of @gpestana, we compiled some data to play that out. We used directly the rust code deployed in the polkadot-sdk repo to produce the data.
Drop-off in Staker APY
This graph illustrates the drop in APY for every (incrementing) 0.05% diversion from the ideal staking rate of 52.5% (the situation now).
As mentioned in the section about the long-term plan, I fully agree to expose this parameter to governance, make it independent of the number of parachains. I am sure, that will be proposed when the time comes!
The 60% accounts for the fact that we still should see more parachain slots opening than closing, which would drive that number down again.
This is generally a valid point and I tend to agree that the high staking APY on the relay chain make it harder for DeFi projects to compete. It is part of some mid/longer-term ideas to revisit this with some suggestions. With the changes planned here we are setting the foundation for these changes by exposing inflation parameters to governance.
I’d say, that this discussion does not necessarily touch the topic of this proposal.
Polkadot’s Treasury right now seems rather healthy and well-funded. So, similar to my responses to @NoRisk-NoFun, I’d say that this discussion is better placed after we enacted this change and tackle this issue systematically.
This is a good news, not a bad news.
If we have 60% dot stake, it’s near 11% staking rewards.
I really see 0 issue here.
We are at the worst moment of the cycle, we must stop to be greedy.
It’s not the moment to try to extract money of the ecosystem, we have already enough sell pressure.
Staking is here to securise the ecosystem, rewards is give to attract dot token on it.
Staking arent done first to give rewards, its only something mandatory to attract dot inside.
Do the network is enough securise with 50% inside?
This is the real question.
And the answer is yes.
Let’s develop the ecosystem more than to protect a rent for some big whale.
Which situation are you describing? If we have 60% ideal stake and match that with 60% staking rate we’d have 16.6% APY, which I think is still plenty…
I’d like to address a concern that I read in various channels, namely that the staker APY is currently too high which gives especially DeFi projects a hard time to compete. There are several points here:
I don’t think this is the right place to address this, because, if the token holders decide so, the APY should rather be reduced through a lowering in inflation, not through the staking inefficiency. If the changes proposed here (or as an additional upgrade after) come into effect, the inflation parameter should be exposed to governance.
Not increasing the ideal staking rate and rejecting this change does not necessarily mean that the APY decreases. It depends on the development of the staking rate, of course, but a likely scenario could be that the remaining gap to the ideal rate closes, and not much more enters the staking rate. That could lead to an APY around ~19% (0.1/0.525) compared to an ideal situation with the change of 16.6% (0.1/0.6).
Personally i think we need less retail DeFi in the ecosystem and more REAL enterprise solutions being built. There is already thousands of other chains where retail can go gamble and print fake money out of nowhere. Fact is DeFi isn’t brining any real world value to these chains, i’s nothing more than a race to see who can cash out their bag before someone else does.
Staking DOT actually provides security to this massive ecosystem where at some point enterprise solutions worth billions will depend on it. That’s the adoption and value that will be needed for survival long term and where the focus should be. Not farming tokens that have zero utility beyond trying to make people money off of other suckers.
DeFi currently isn’t developed enough to do this. The current DeFi applications are trash and need further innovation. Just look at Acala. This could be a good idea in the future, however.
We detailed in this Polkadot strategy report why Polkadot’s current currency inflation needs to be adjusted and how to dynamically adjust Polkadot’s inflation.
It also mentioned a way of thinking, which is to lower the original 10% upper limit of Polkadot’s currency inflation, pool all the core time income into the treasury, and then dynamically adjust the treasury’s burn ratio.
In addition, we are applying for the seventh Polkadot treasury support. If you agree with our research and want to see more similar in-depth thinking, please vote for us. Thank you.
Update on this, I am working on the code needed to achieve two things:
Make Polkadot’s global inflation independent of the number of auctions.
Make the parameters of the above easily adjustable by the governance
Make the minting of the inflation happen outside of pallet-staking (where it happens now), in preparation for of the Minimal Relay RFC. I will probably propose the outcome of this as small RFC to the fellowship soon.
If all of the above takes too long, we should at least do the item no. 1 in a quick manner, as with the auctions going away the existing formula starts to make less and less sense.
Once the system is updated, does adjusting the inflation parameters require a root call? I am assuming yes given the implications if this parameter were ever exploited. Also, is there a way to constrain the upper limit as a control check (for example, in case a typo happened)? Since there has been digit errors in both the conor daily proposal and in prior lock periods for conviction voting. This is not an error Polkadot would ever want to occur if there were ever to be a significant over mint.
- Sell all dots immediately (small percentage because of the current price is too low most pcl user are dot believers)