Last week @0x-kingfish started a discussion on FLX incentive campaigns, and I proposed we end FLX staking for several reasons that you can read about it in my post:
@fabiohild was kind enough to investigate the practical path to turning off staking, and realized that we have the following constraints:
- the 90 day linear rewards vesting can be disabled such that future rewards unlock immediately, without vesting
- claimed rewards already in the 90 day linear reward vesting period can not be accelerated, and will still be vested over the remaining time
- the trigger for the staked ETH/FLX auctions can be disabled, so none of the ETH/FLX that is staked can be slashed any longer
- the 21 day thawing period for withdrawing staked ETH/FLX cannot be disabled or altered
- ~15,000 FLX is stuck in the staking rewards contract, and can not be transferred back to the protocol treasury
- the FLX emissions rate from the staking rewards contract can be updated
- users can not be prevented from staking ETH/FLX, even if the staking auction is disabled
Based on these constraints, we came up with a plan for a protocol proposal which we intend to try and execute in the following week:
- Disable / Bypass the staked ETH/FLX auctions
- Make all future FLX rewards immediate instead of having 90 day vesting
- Cut FLX emission to 10 FLX/day (~4 years of LP incentives)
Given that we can’t disable or change the 21 day withdrawal thawing period, this proposal will essentially create a small, medium-term incentive pool for FLX/ETH LPs who are willing to lock their liquidity and voluntarily subject it to a 21 day withdrawal period. The impermanent loss (IL) risk from LPing will still exist, but “stakers” (if they can still be called that, perhaps a better term would be “lockers”) will no longer risk being slashed and having a portion of their liquidity auctioned off.