Description
Executive Summary
This proposal aims to set the allocation of new staking incentives for the upcoming quarter. The current staking incentives have been allocated through September 14th, prior to the establishment of the DAO. However, as outlined in the Mainnet Staking announcement 5, it was intended that CyberDAO would set future incentives:
“Moving forward, staking rewards each year will be determined through DAO governance and are subject to change.”
This proposal initiates the process for setting staking incentives for the quarter from September 14th to December 14th, now that CyberDAO has been established through the ratification of its Working Constitution.
For the quarter beginning September 14th, allocating 250k CYBER for staking incentives is proposed. This would offer substantial incentives for CYBER stakers while ensuring the program’s future sustainability.
Key stakeholders include:
- CYBER stakers, the participants who make up CyberDAO
- Existing members of the Cyber community
- Future members of the Cyber community
The goal of this discussion is to gauge the community’s perspective on setting CYBER staking incentives for Q4 2024 at 250k CYBER.
Motivation
The motivation behind this proposal is to set the CYBER staking incentives for the upcoming quarter and to establish CyberDAO’s authority as the governing body responsible for setting staking incentives moving forward.
Specifications
This proposal aims to initiate the discussion on staking incentives for the upcoming quarter, following the completion of the quarter ending on September 14, 2024. For the upcoming quarter, from September 14 to December 14, setting the staking incentives at 250k CYBER is proposed. This would maintain a highly competitive rate compared to other staking incentives in the market.
When considering the reward rates (another term for staking incentives) of other networks, allocating 250k CYBER for staking incentives would keep CYBER among the most competitive. This allocation is estimated to result in a rate of 22.39% APY*.
For comparison, here are the reward rates of some other networks:
*These rates are estimations, or based on recent stake amount, the actual reward rate/APY is subject to change based on the total amount staked.
Research indicates that during periods of high market volatility, like now, staking incentives are less effective at boosting staking volume. Additionally, there has been low activity related to staking or unstaking on Cyber. Therefore, increasing the reward rate might have minimal impact on the total CYBER staked and could reduce the CYBER available for staking incentives in the coming years. Setting CYBER staking incentives at 250k for the next quarter strikes a balance between keeping rewards competitive and ensuring the program’s sustainability.
Success Criteria
Success for this proposal is defined by one major outcome:
- Maintenance of a Comparable Stake Ratio: The current Stake Ratio (the ratio of staked CYBER to CYBER’s circulating supply) stands at 17.10%. A key measure of success will be maintaining this ratio, which demonstrates that CYBER staking incentives remain attractive and competitive within the broader market. By setting the staking incentives at 250k CYBER for the upcoming quarter, the aim is to offer a reward rate that is not only competitive but also sustainable, aligning with the overall health and stability of the CYBER ecosystem.
By achieving this outcome, the Cyber ecosystem would remain competitive and continue to attract both current and future members.
Action Plan
As outlined in the Processes & Governance Procedures, this proposal would initiate the beginning of a 12-day discussion period. During this time, community members are encouraged to provide feedback on the proposed staking incentives for the upcoming quarter.
Following the discussion period, there will be a 2-day voting delay. This delay allows time for the delegation of votes and the acquisition of new staked CYBER tokens before the snapshot occurs. If the feedback indicates significant community dissatisfaction with the proposed incentive rates, an updated proposal will be submitted to the forum for further consideration.
To pass this proposal, it must meet the required quorum of 30% and receive at least 51% approval. If these thresholds are achieved, the staking incentives will be set for the upcoming quarter as proposed. If the proposal does not meet these thresholds, a new proposal with adjusted staking rates will be introduced.
Conclusion
In summary, this proposal seeks to set the staking incentives for the upcoming quarter and establish CyberDAO’s role in setting future staking incentives. By allocating 250k CYBER for staking incentives for the quarter beginning September 14th, the aim is to maintain a highly competitive rate that aligns with market standards, while ensuring the long-term sustainability and growth of the Cyber ecosystem.
The success of this proposal will be measured by maintaining a comparable stake ratio. Through a balanced approach, CYBER will remain an attractive staking option while enhancing the ecosystem’s economic security.
As this moves into the discussion and voting phases, the active participation of the community is crucial. Your feedback will shape the final proposal, ensuring that the staking incentives reflect the collective interests of the CyberDAO members.
- Objective: Set the stake incentives for the upcoming quarter and affirm CyberDAO’s role in setting these incentives moving forward.
- Participation: Active governance participation is limited to CYBER token stakers, specifically cCYBER holders.
- Success Metrics: Successful establishment of the new staking incentives for the upcoming quarter, maintenance of a comparable stake ratio.
- Voting Requirements: A 30% quorum and a 51% approval rate are required for the proposal to pass.
