"FILO" Staking Model
First-In Last-Out Staking Model
Staking proved to be a core mechanic in web3 projects trying to maintain token velocity by retaining value accrued by its token through locking big chunks of supply to decrease selling pressure.
An ideal governance token is a special token with inherent utility derived from the value the DAO assets under management (AUM) and should be reflected in it's price (in some cases with slightly more/less value due to speculation regarding the potential growth). A pure governance token should eliminate huge speculation to avoid catastrophic consequences and unpredictable massive sell-offs that could harm and eventually destroy the project.
Staking as a mechanism "in moderate usage" did a good job of absorbing market shocks from sell-offs by bribing its stackers through extra incentives. But almost all of the current staking mechanism is still prone to massive sell-offs and their associated danger to the whole protocol. In some circumstances can be even the igniting factor (for instance LP staking rewards that creates a Schelling point for liquidity withdrawal at the end of the staking period).
- Staking should be not timed to avoid Schelling-based sell-offs.
- Staking should encourage long-term gains than short-term ones.
- Greedy stackers penalty.
We propose a new type of staking where stakers can unstake anytime but are required to pay an exit taxation fee that goes back to the other stakers.
- 80% of the unstake fees goes back directly as an incentive to other stakers,
- Remaining 20% is sent to the treasury.
The taxation fee is not flat, but a progressive fee that increases with the amount being unstaked increase.