- The DAO will have until ~6 PM UTC 30/06/2021 (2 days) to contribute changes to this proposal.
- Voters need to hold xSDT in their wallet before the snapshot for this vote is triggered at block 12,737,327. (There are no penalties for withdrawing from the palace).
- On-chain voting on whether this proposal should be implemented as specified above will occur on our signal here. The vote will run for 48 hours from 6PM UTC 30/06/2021 until 6PM UTC 01/07/2021.
- If passed, the proposed changes in SDIP #4 do not apply to the PPS LP. The PPS LP will continue to receive 0.8 SDT/block for the foreseeable future.
Stake DAO is looking to aggressively expand our number of strategy offerings in the near future. To accommodate this shift in gear, we are proposing that the Stake DAO protocol begins to distribute SDT dynamically to each strategy in response to changes in TVL and APY, including protocol staking (Staking-as-a-Service).
This dynamic distribution is the first step towards democratized allocation of governance rights based on the value provided by them to the DAO. This will be based on weekly snapshots every Tuesday to monitor holdings and base APY. Run rate revenues will be published on a weekly basis, as well as the new SDT allocation. The objective of doing so is to provide the best APYs in the market for a given risk profile — ultimately ensuring the Stake DAO platform offers the most competitive yields at all times whilst streamlining SDT distribution to those that provide the greatest value to the DAO.
To achieve this, Stake DAO will allocate two layers of SDT to each strategy — one base, one fluid. The base layer is designed to ensure all Stake DAO strategy participants earn governance rights. The dynamic layer of SDT will be allocated to strategies in accordance with their revenues for the DAO (performance fees). For the first time, delegators (SaaS stakers) that are actively contributing to DAO revenues will be eligible to receive SDT.
i) The PPS is not in the scope of this proposal and will continue to attain 0.8 SDT per block (via Balancer LP), any changes to the PPS allocation will also require on chain voting.
ii) Changes to total SDT emissions (currently 4 SDT/block) is not in the scope of this proposal and will not be changed without a vote.
The purpose of SDT incentives has always been twofold: to distribute governance rights to active Stake DAO platform users and to incentivise the flow of capital towards the most profitable strategies.
As Stake DAO increases its number of strategies, the DAO will need to be extremely agile to ensure inflation is utilised efficiently.
This proposal would enable the DAO to adjust its reward allocation on a weekly basis to respond to broader ecosystem changes whilst reducing lead times. Ultimately this makes Stake DAO more secure and more competitive.
Example of weekly allocation based on current snapshot
|TVL (USD)||Net APY before rewards||DAO weekly perf. fees (USD)||Competition max APY||Layer 1 incentives (SDT/block)||Total incentives (SDT/block)||APY after rewards|
|Passive BTC (BSC)||31,305||5.7%||6||n.a.||-||-||5.7%|
|Passive USD 3pool||1,753||6.1%||0||n.a.||-||-||6.1%|
|Passive USD fusd||8,487||8.3%||2||n.a.||-||-||8.3%|
As of 22 June 2021 | Does not include B2B figs
In practice similar data will be published every Tuesday signalling the distribution of SDT. Changes as per the table above will be implemented on a Thursday.
The community can challenge the signalled changes by commenting directly on the signalling post for that week. If there is significant community demand, the proposed changes will be taken to a formal governance vote with no changes taking place until the community is satisfied.
- Supporting capital inflows in most profitable Stake DAO strategies.
- Ensuring strategies competitiveness versus Stake DAO’s key competitors
- Rewarding LPs that generate higher revenues for the DAO on a relative basis.
- Reducing governance rights for less profitable strategies.