Hello! I’d like to propose a staking mechanism. Currently, I’m into another project that has implented what they called ‘Fluid Staking’.
I’m sure there’s another term for that, but what Fluid Staking basically does if implemented by the DAO:
DMG holders can lock-up their DMG tokens in a smart contract for a set amount of time. The longer they lock up their token the higher the APR should be.
One year period as the maximum lock-up is good. I’m not sure what the lowest period should be.
To make staking more robust, add a slashing mechanism. Make it so that we can withraw the rewarded tokens regularly to our non-custodial wallet, but if one were to withraw their principal too early before their chosen lock-up period ends, then their principal would be slashed.
However make it so that it’s not possible for someone to end up with less DMG than they started with regardless if they were slashed.
Another mechanism to add would be an unbonding period. Basically, if someone were to withraw their principal too early, then it would be locked up in the smart contract for a certain period of time. It coud be 1 day, 7 days, or 21 days.
This proposal should reward long term DMG holder and show their commitment to the project, while punishing those who are speculating on the price because their share of the network is shrinking should they choose not to stake.
Now where would the reward pool come from? As a sign of good will to the community, perhaps the foundation could donate a portion of their DMG token to the pool. This is also a good way to boost decentralization.
Thank you for reading.