SD staking mechanism (xSD)

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Thanks a lot for key suggestions on the forum regarding SD staking and xSD design. Capturing below are key areas of suggestion and my thoughts below:

  • Giving yield in other native tokens
    • This is a great suggestion. We have liquid staking contracts across 6 chains as of now. With Eth, Aptos launching soon, it will be 8. Each of the L1 community would prefer to receive yield in their own native token.
    • It becomes a bit impractical to do this as we need to manage and account for rewards in 8+ different chains (e.g. overheads etc.). Would also add susceptibility of rewards to bridge related risks etc.
    • A potential option could be to do an on-chain vote on the top 2/ top 3 tokens to receive yield.
  • Giving yield in stable coins
    • This is an interesting suggestion and we have had an initial consultation with one of our legal counsels. Preliminary assessment is this may pose a risk of construing SD as a dividend-paying security.
    • However, they are doing a deeper diligence again. We should have a final assessment in a week or so.
  • Liquidity based staking
    • On-chain liquidity is one of the important areas we are focusing on. Immediate changes are
      • 1.) Moving POL to Uniswap v3
      • 2.) Building deep liquidity on Balancer for SD <> ETH pool
    • We will bribe and continue to incentivise on-chain liquidity. Adding a veBAL type of token as the only way to receive SD staking rewards exposes us to any Balancer related smart contract risks. Apart from Balancer and their ecosystem projects, are there any other protocols that utilize this model?
  • In case of xSD, SD buyback timing
    • If we choose to go ahead with the xSD model, this could be a combination of daily buys/ opportunistic buys during the dips.

Key action items for the team include the following based on the above suggestions:

  1. Hear community’s feedback on the suggestions shared here and go for on-chain vote (if necessary)
  2. Further assess Bytemason’s and ve-LP models with relevant community members.
  3. Get back to community with final assessment on yield in stable coins

Responses to key questions about Stader’s overall revenues and expenses.

  • Revenues: As of current prices, Stader’s protocol revenues are around 1.1 Mn USD.
  • Expenses: Team expenses along with marketing etc. are approx 300k USD/ month
  • Rewards expenses: Please refer to the post here for monthly rewards budgets
    SD Token Emissions Budget- January 2023
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