Introduction
With the Tokenomics Reboot, Stader Labs has undertaken a massive realignment exercise to revamp the $SD tokenomics focusing on optimization, enhanced utility, rewards and sustainability targeting the 10x growth.
Recap - $SD Tokenomics Reboot
The $SD Tokenomics Reboot started with a proposal to burn 20% of the total token supply. This was passed with 99%+ quorum with the actual burn successfully concluded on 25th June. 30Mn $SD tokens have now been burnt to reduce the total supply to 120Mn tokens. With the total supply more optimized, StaderDAO has also approved a quarterly $SD Buyback and caps on reward emissions as the next step with an aim to streamline the circulating supply. The two previous proposals can be accessed here:
The next initiative targets one of the most crucial parts of a healthy tokenomics - the token’s utility. With a view to enhance the same, StaderDAO now proposes the third lever to the Tokenomics Reboot— SD Cover for Permissioned ETHx Node Operators.
Utility for $SD
Generating additional utilities of the $SD has always been a priority for Stader.
While SD boasts of dedicated DeFi opportunities, it is also an integral part of the ETHx business-model. Under it, permissionless node operators bond a minimum of 0.4 ETH worth of $SD per validator. Next major lever is the SD Utility Pool which enables SD holders to earn additional rewards on their SD holdings by delegating the same to the node operations. These initiatives have helped lock-up more than 12% of $SD circulating supply.
Inclusion of SD in the Permissioned Node Operations Set-up
ETHx had been designed with a vision to closely integrate SD into Stader’s business model. Permissionless node operators bond a min of 0.4 ETH per validator currently which serves as slashing insurance for the end users.
This utility is now being extended to the permissioned node operators too. Currently there is no such insurance cover available for our permissioned partners, making them liable to cover the complete value in case of a slashing event. Stader DAO proposes leveraging the SD Utility Pool to extend the benefit of an insurance cover to these partners too. We suggest an insurance cover for such a scenario where the node operator shall have to pay only up till 4 ETH as slashing penalty. All amount above the same shall be covered by the Utility Pool.
The premium for the same shall be recovered by delegating 1% out of the 5%, thereby reducing the staking commission to 4% for the permissioned node operators. This 1% shall be deployed for additional rewards to the SD Utility Pool, over and above the utilization fee received by the permissionless node operators.
The two streams shall enable attractive double digits rewards on the Pool, which in turn would incentivise more holders to lock in their SD, further optimizing the circulating supply of the token.
Call for feedback
The proposal helps generate another utility for $SD, moving Stader towards a more utility driven future. Stronger utility for $SD will indeed contribute towards the long-term goals for Stader and making the move for the 10x growth.
We welcome our community’s valuable feedback on the proposal so we can incorporate the same and push it to the voting stage.