Reward current "stuck" capital suppliers who continue to support the network

Recently there has been some understandable frustration from capital suppliers who can not withdraw their funds.

Early adopters of any network should be amply rewarded & though the current APY is intended to be attractive enough, as someone who has built products and companies I have seen first hand how important retention is and I think one goal of the DAO should be to continue to incentivize these early adopters to support the network and remedy any frustrations as best as possible.

Thus, I am proposing for those who are currently “stuck” and can’t withdraw their capital that we allocate a certain # of USF tokens (TBD) as a “paid bonus” opportunity for their continued faith in and support of the protocol. @EAsports suggested that this “bonus” would be awarded to anyone who both:

  1. Currently can not withdraw their ETH and
  2. Agrees to maintain their capital position for X amount of time after a capital buffer is reached (also thereby helping to ensure the same scenario does not play out again to others)

So the tl;dr of the idea is - If you have been supplying capital, you have the option to agree to keep your capital supplied for X time post buffer & receive significant additional USF incentives.

Would need to find consensus on the following:

  • Is this a good idea, and if not, can it be turned into one?
  • If yes, what is the incentive reward? (USF? How much?)
  • If yes, how long of a lockup would we ask capital suppliers for?

Would love any feedback/ideas surrounding this.

2 Likes

I’m not against the idea but it seems complicated to implement.
Are you thinking about doing some coding and adding a feature to the website to let capital suppliers commit to leaving their ETH for a certain period of time? Or would this be tracked manually?

I was thinking the time mechanism already exists for the multi-epoch bonus rewards for LPs and capital providers that has been done.

I think all we would have to do is determine the timeframe. Probably worth getting input from @Marh and the team to ensure that.

I think it is a good idea :slight_smile:

I think the reward should be significant I will throw out 150-200k USF (This is similar to some early epoch allocations) , but the time should also be. would propose 4 epochs (~60 days) at a minimum.

This is also not considering the long term thinkers vault previously discussed that could be used for this or also has potential to be in addition to this.

I am in favour of the spirit of this idea.

However, I think it’s fair to assume that this is not a one-time occurrence and instead design this system to also handle future cases where the buffer is used up.

So I suggest the following:

Establish an additional bonus paid out from the long-term thinkers vault.
Bonus criteria: For every day that the buffer is below 5% the bonus is paid out.
Bonus amount: Bonus for 1 day is equal to 1/100 of the holdings of the long-term thinkers vault. That means the bonus can never fully deplete.
Bonus qualification criteria: You supplied capital on a day where the Bonus criteria was met and kept supplying capital for the full next epoch.
Bonus vesting: Fully vested after the next epoch.

Following up on some comments made above, also like the spirit of what we are trying to do… but not sure on how to implement… My main concern is around stakers who have not tried withdrawing yet, and might be incentivized to move to the “stuck” category.

If regular USF are being accumulated to those stuck, and on top of that they will get a reward, why should I not move my staked ETH into this category?

Not planning on doing, but just being devil’s advocate.

1 Like

I really do not like that in order to withdraw USB from the site to the wallet, I need to pay from 50% to 150% of the commission. I would like to pull out the tokens with the lowest fees.