Summary:
Re-direct a small percentage of fees that are currently distributed to YFI stakers to a Thought Contributor Pool, via tallying of staked YFI on posts.
Abstract:
YFI tokens staked in Governance translates to a token balance within a platform similar to this one we are currently using, but with additional functionality built in, as described below. Note, the token balance could either be denominated directly in YFI or some new asset correlated to the value of YFI staked (there may be pros and cons to either option). This token can then be staked to posted content contributed by other users on the platform, and then at the time of each snapshot (i.e., at a specific known time every few hours, every day, or every few days), the pot is divided accordingly among the addresses of the users who wrote the posts to which tokens were staked.
Motivation:
Reward thought contributors and valuable members of the community for their work, incentivize broader community engagement, foster more rapid development of protocol initiatives, and improve network effects. Put staked YFI tokens (that are otherwise engaged when not being used for proposal voting) to more active use.
Specification:
At the time of a given snapshot, the YFI staked by each address in Governance is recorded and the recorded stake balances are compared to the stake balance recorded at the time of the last snapshot, in order to rebalance staked / āstake-ableā tokens within this platform.
If feasible, itād be useful to allow tokens within this platform to be staked to (deposited to) and subsequently un-staked from (withdrawn from) contributorās posts, similar to a user Liking a post and then easily remove the Like if desired. Note that the distribution of stake to posted content should really only be relevant at the time of each snapshot.
According to Etherscan and https://stats.finance/ygov, at the time of this write-up, there is ~6,475 YFI (~$211,715,000) staked in Governance V2, staked by 10,438 addresses. Hence, at the time of writing, the average balance staked is 0.63 YFI per address, or ~$20,500 per address.
Based on my calculations, considering interest accrued on my own staked YFI through 1 week of staking, it appears that the staking reward APY over the past week (9/4 to 9/11/2020) was ~8.66% (please verify). This implies that, over the past week, the average daily fees deposited to YFI Governance was ~$50,000 per day (or 0.0866/365*$211,715,000). Note, I recognize that this math is overly simplified, but it should get us to a ballpark number for discussion purposes. Please comment if you believe that this is way off-base.
If 5% of this ~$50,000/day were diverted from the staking rewards pool to the Thought Contributor Pool (~$2,500), this would decrease the Governance V2 staking yield from 8.66% to 8.23%āa 0.43% decrease; however, it may be argued that a reduction in staking yield is worthwhile if it results in 1) incentive alignment for Thought Contributors, and 2) an increased incentive for Governance stakers to be more engaged in community discussions and proposals before they go to vote.
If all variables described above remained constant and fees generated by the protocol remained constant (big assumptions), based upon the distribution of āLikes Receivedā in the past week (9/4 to 9/11/2020), it is feasible that users such as @banteg, @Beepidibop, @tracheopteryx, @Dark, and @alizk have potential to be rewarded with between $500 and $2,000 in one week for their thought contributions and leadership in guiding discussions on this platform. But more intriguingly, it could lead to smaller value transfers to users that may just be entering the space to contribute their ideas and be rewarded for it, further engaging them and even giving them an opportunity to earn a stake in YFI governance over time, just through their thought contributions.
Additional Thoughts:
There may be some value in considering the use of Quadratic āLikingā (i.e, a user can stake more than 1 āLikeā token on a given post, but for each additional āLikeā staked on that post, the āstake costā of the āLikeā increases exponentially), in order to more evenly distribute value more evenly over a variety of special interests of the protocol. There may also be value in considering the ability to delegate staking on such a platform to users of the platform, based on certain properties of those users (most active, most liked, most aligned with your interests, etc.).
Furthermore, I understand that there are some major issues with this concept, listed below (Iām sure there are plenty more) and would like to open up for discussion:
- This requires that all users of the system disclose their addresses, so that the system may issue the correct balance for staking and so that the system may pay out rewards to the appropriate user addresses.
- Iām sure there are a ton of attack vectors with this concept that I havenāt given too much thought to, such as 1) a user can have multiple accounts/addresses (sybil attack?), and 2) Spamming posts, as there is no disincentive for bad/useless posts and only incentive for good posts (is it worth considering a āDislikeā token as well?!)
- Even if such a system were possible today, is it scalable to millions of users?
- This opens the possibility that users that may not actually contribute all that much to community discussion, receive rewards just because of who they are. To be clear, Iām not so sure that this is a bad thing; itās kind of like giving the Governance community more of a direct voice in choosing whom they feel should be rewarded for their contributions to Yearn, even if that work is not necessarily on this platform.
I fully recognize that the proposed concept may be very far-fetched, extremely difficult/costly to implement, and may be subject to scamming, but Iām posing it anyway, as I do believe that it would be a step in the right direction toward achieving a more robust protocol built upon a foundation of aligned incentives (which is ultimately the holy grail of a DAO). Prepared for backlash, so be as critical as youād like with your feedback!
