The End of FLX Staking

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:

  1. Disable / Bypass the staked ETH/FLX auctions
  2. Make all future FLX rewards immediate instead of having 90 day vesting
  3. 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.