This is a space to informally discuss potential DIPs before formally submitting drafts.
Name of the Proposal: Launch an Active Staking Rewards (ASR) Program
Category of the Proposal: Technical
Summary:
This proposal will award active participants in the Drift ecosystem for the work they do in informing protocol decisions. The concept of ASR is inspired by the Jupiter team who pioneered this and has seen the number of unique wallets, number of JUP staked and governance participation at very high numbers.
DIP-2 aims to increase governance participation through implementation of Active Staking Rewards. Participation is crucial for the progressive decentralisation of a protocol as it reflects broader community representations for decisions that are being made. By incentivizing participation in governance this proposal aims to improve governance effectiveness and help drive Drift’s future growth.
Incentivizing participation doesn’t necessarily improve governance. Because of this the goal is to incentivize participation while staked in order to better align incentives.
With the Foundation claims ending on the 16th of August, an important decision around the unclaimed tokens needs to be made. At the time of writing this discussion thread August 13th 2024]; approximately 8M tokens remain unclaimed and forfeited. Part of the goal of this discussion is to decide the amount of rewards, not all of the 8M has to be used.
This initial post has the goal of fielding discussion around the topic with the goal to Draft a formalised proposal in the coming days.
Preliminarily - I think this is a great suggestion and I think Jupiter has done very well with their ASR.
Will depend on the rewards and all the technical mechanics but conceptually, I think this is a no brainer and should be pushed asap. I think ASR first followed by the post @Proph3t shared makes a lot of sense for the community and more importantly, the Drift Stakers and participants to benefit from it.
I love this!
If we want to attract new investors looking for rewards with this extra utility, then this is no brainer cuz this probably could push those new investors to be future long term holders.
LFG!!
using the unclaimed/forfeited tokens from airdrop period seems like biased decision making. those should just be returned to the DAOs treasury. otherwise its showcasing weird misaligned incentives “use it or lose it”. the optimal amount selected should be irrespectively of that.
ASR makes sense for Jupiter as it’s been designed for Jupiter. Jupiter is quickly morphing into a true ecosystem enabler, it already kinda was as a shared front end for the Solana DEX ecosystem.
Does that make sense for Drift? I don’t think so.
Balancer pioneered a proof of liquidity system when they launched 80-20 BAL/WETH LP tokens as veBAL (Berachain is just the latest iteration of this). It made sense as Balancer is a DEX. DEXes have LPs.
What is Drift at it’s core? It’s a lending provider (mostly perps leverage but also more traditional crypto lending).
Shouldn’t any staking program lean into this somehow? What ever token representation of the staking can be used to vote, that’s not complicated to do.
Just to be clear I’m not advocating for insurance fund staking. I think whilst that is better than simply locking up tokens it’s also hard to do (as Aave has shown).
Market Making is the kinda the game for Drift as the core function the protocol needs.
Could a DRIFT staking position just be Long on the DRIFT perps market? And instead of locking for time (something no one really likes) you get more governance power the more leverage you take out on that Long?
There’s something in that as goes funding rate as well but I’m not smart enough to articulate it.
Confused on why this would make sense for Jup but not Drift. Fuel program is already designed to incentivize core users of Drift - like market makers. This would just be for governance participation.
think the last part your suggesting a funding rate farming Drift token - dk why that would make sense for Drift stakers
Jupiter has rewards from projects that launched on Jupiter. The ASR is built around this. Drift isn’t a launchpad or liquidity provider. It’s lending.
I just think any token staked should be actively doing SOMETHING related to the core product of a project. Seeing as Drift is lending then that underlying capital in DRIFT should be deployed to that end. Even if it’s only minimal rewards I think it’s important to have a stake be active in the function of the protocol.