Hey took it upon myself to kickstart this / pull it all together @kiriyha - not able to add / tag anyone else for some reason.
- Discussing the merits of locking SWISE in exchange for some benefits
- veSWISE gauge pool would be directed towards node operators. Could potentially be a flywheel for the token to have governance power in deciding fee levels for specific node operators. Initially it would likely just be a kiss - node operator buys SWISE & votes for themselves to get to 6% yield. But down the line, could potentially put some or all of the 5% node operator fee up for a vote - and have node operators compete against each other based on their contribution to the protocol (by submitting reports to the DAO on uptimes/MEV rebates, etc.) & some node operators get 7%, others get 4%.
- Currently you could argue there is no point in holding the token. This gives people a reason to hold/stake it but you are not being diluted if you simply want to hold it either.
- veSWISE as vehicle to opening potential to ramp up veSWISE emissions for marketing/node operator incentive flywheel (without creating incremental sell pressure). Not fair to have node ops/new stakers locked up in a quasi-locked token with fractured liquidity across DeFi if SWISE stakers aren’t as well.
- Such a mechanism will offer considerable value to the DAO, coming from the increased voting power earned by its more committed members and the additional engagement in governance discussions generated by the incentive to lock $SWISE.
- Incentive design would be even stronger if we would also implement a boost on LP rewards by locking SWISE (more people would lock-up for longer and become also longer-term LPs) boost making it harder for small and new community members to earn a significant portion of the tokens, these boosts could be implemented on a limited timescale, potentially slowly fading out over time. Now it’s essential to create a flywheel of token-price and TVL by smart incentives, (content) marketing as well as culture/community building
- Different people have different time-preferences of liquidity and would therefore stake for different timeframes. They would not be “stupid” for staking for a shorter period of time if it fits their preferences better.
- With drying up circulating supply and constant demand prices have to go up. Locking the token and in return receive a) boosting governance voting power, b) staking fee rewards on top of your own staking rewards are two good and logically sound reasons to hold SWISE long-term.
- The concept of disproportionately rewarding longer term stakers (as their earnings are discounted) even at the expense (small earnings/ voting power dilution) which is fine as we all have different discount rates. This approach is helpful to drive more utility to SWISE while giving any holder a choice to pick his own duration and be rewarded accordingly relatively to the choice he is making.
- Its not an all or nothing for stakers who may need NT liquidity – individual can choose to stake a portion of their SWISE long term to maximize returns & keep the other portion unstaked for NT liquidity as needed. Or they can choose to lock all of their SWISE for an intermediate amount of time.
- Adds absolutely nothing. It forces people to choose between locking for a long time and selling, because there is no point in keeping tokens if you do not lock them. Locking does not magically increase yield, that yield needs to come from somewhere. Usually with locking that somewhere is from people who forget to lock, or cannot for some reason, so they get screwed out of their fair share. But the number of victims is likely rather small, so there will be little benefit from taking their fair share to redistribute to those who do lock. Additionally locked tokens cannot easily be used in other DeFi projects, for instance as collateral.
- Proposal does not increase overall profit for holding Swise, it just redistributes between long term stakers and non-stakers. It does not make any sense for anyone to stake for any other period than the maximum, as staking less or not all simply means that you let your benefits go to others. The only way to gain, is if a significant number of people are so stupid to hold or buy Swise and not stake for the maximum time. Exploiting other people’s stupidity is a business model that I generally frown upon. e gain nothing extra, we just lost our freedom to do with our Swise as we please. We cannot use them in other DeFi projects, for instance as collateral, or provide liquidity in a pool.
- The proposed system is merely a redistribution of voting power with actually very little upside for those who do stake, compared to the current situation, but a huge downside for those who do not. Not to mention the huge downside for those who do stake in terms of having their swise locked up for a very long time.
- Having to either hold for a long time or sell, will lead to more selling pressure on very low liquidity AMMs due to drying up supply. A combination that could really tank the price. So, we need a counter pressure to make the price go up, a minimum required investment could do that.
- Locking and later unlocking and claiming costs gas, which at times can be quite high, the smaller your holdings the more those fees impact you, while for whales the fees barely matter. So, on the contrary this proposal is likely to shift more power to whales at the expense of small token holders.
- Given our treasury is largely in SWISE itself - a big decline in price lowers our runway in $ terms. You own governance token with right to treasury but if that gov token declines by 50%, so does the treasury while the risks associated with that future revenue stream increase as well as your runway in $ terms declines. So long story short, no reason to hold a gov token besides speculation on future potential