Incentivisation of Long Term Staking

Summary

This proposal aims at increasing the rewards earned by Sushi LP token stakers based on how long they have staked for. The longer you’ve staked for, the more rewards you should receive. Additionally, sizing up your stake should be viewed as positive and sizing down should be viewed as negative.

Motivation

To not only incentivise longer term staking, but also amount staked.

Specification

Besides deciding proportion of rewards received by a user as a function of just amount staked, the introduction of a rewarding mechanism based on a function of time is requested.

For

Incentivise users to stake larger amounts for longer
Decentivise dumps following a reduction in rewards

Against

Reduction of rewards to short term holders (not necessarily a con, but I didn’t want to leave this section empty)

Poll

  • YES
  • NO

0 voters

6 Likes

I like the idea and think it’s a solid path to go down, as-long we don’t find a better solution. That said, however, we must make sure the bonus does not activate too fast or give too much bonus out due to inflation risks.

Yes agreed. I don’t necessarily think it should be modelled as a threshold though, rather a function of time where the rewards received per user per block is directly proportional to how long they have stayed staked for (in addition to other factors).

Building on someone else’s idea:

Maybe we can get a gradual increase in staking rewards, something of the sorts:

  • 1.01x after 3 days
  • 1.02x after 7 days
  • 1.05x after 15 days
  • 1.1x after 1 month
  • 1.2x after 2 months
  • ~2x after 1 year
  • ~3x after 4-5 years
    etc.

Or we could also follow a linear formula to determine the rewards. Something that could also have a ceiling at 3x, regardless of how much time you provide liquidity.

Anyway, this topic has plenty of room for debating.

1 Like

Would we be able to implement a mechanism in “aggregate staked”? How would this work if I plan on staking…but then eventually plan to divest some staking value into another pool, but yet retain all staked liquidity in Sushi. I don’t want to be penalized if I just “re-allocate” my stake.

There could be a mechanism that tracks the tokens transferred and then gives you a time limit within how quickly you should restake in order to maintain your “reward boost”.

1 Like

It’s a good idea. But need more details how to achieve it

the general idea is great but the multiplier should be capped relatively low or else you will keep out new LPs.

A 1.5X max bonus should be more than enough

2 Likes

Good idea. It would be great if more platforms (Uniswap, Pickle finance) implemented a similar reward multiplier system based off how long you’ve staked and then essentially allowed you to swap rewards - example: Person A has a 1.5x reward multiplier on SushiSwap while Person B has a 2x reward multiplier on Uniswap. A mechanism would allow them to swap those rewards and exchange where they have their assets staked. (Notice how in this example, Sushiswap is treated as more valuable than Uniswap so please make it happen team)

I agree, we’ve been looking at ways to implement this in an efficient way. I would also like to see a reward for harvesting directly into staking, such as treating it like it’s been staked for a month already, something like that.

3 Likes

that’s a very cool incentive for the harvest function. +1

1 Like

Love it.
We need to incentivise long term LP stakers. i’m so down.

What if they are staked in a pair where the volume has significantly diminished? We do not want to penalize an LP looking to move their liquidity to a more valuable pair. Currently we reward LPs with SUSHI, which can be staked for xSUSHI. I think that covers this incentive already- it they are frequent users they will have increasingly more SUSHI over time and be rewarded for staking it in sSUSHI.

a move feature (instead of unstake-swap-restake) between pools could keep the boost or lower it a bit to incentivize longer staking on the destination pool