How to improve MINE Staking Incentive

Most of the pylon gateway users like me who staked MINE is not staked to get more MINE token but doing it with the expectation of getting to invest in the new projects launched in the platform.

So if we can market MINE staking similar to yield redirection.
Stake Mine and redirect yield to invest in new projects

Let me explain the issue with the current incentive model and steps to fix it.

Issue:
In the current form, the fee/commission generated by the protocol is used to buy back MINE from the open market to distribute among the long-term MINE stakers. But the actual benefit of this incentive is not the MINE stakers we are just incentivizing LP providers and Yield Optimizers to get a better market to sell their MINE.

Fix:

  • Fee generated from the protocols launched in pylon gateway can be used to invest in the Pool itself (18, 12 or 6 months) up to the pylon governance decision.

  • The token acquired from this money can then be distributed among the Stakers with the locking period similar to the pool chosen by the governance.

-At end of the pool period governance can decide what to do with that money either put it in Pylon Dao treasury or use it to buy back MINE from the market to distribute or burn.

Example:
Let’s say TWD project has 50mil TVL locked which is earning 50K per week from anchor yield out of which 10K is the fee for the pylon protocol.
Now use that 10K to invest in the TWD 18months pool each week, and distribute among the MINE stakers for that week (token will be locked the same as the Pool vesting duration).
Stakers will be eligible only if they staked at least a week so that people can’t game the system just by staking at the very last moment to be eligible.
Once the 18months period ended lets assume the TWD pool got around 2mil UST(accumulated from the weekly deposits) which then can be decided if need to be used to buy back MINE to distribute or burn or to deposit in MINE treasury to give a soft floor to MINE.

Advantage:

  • For the long term Mine stakers it’s a lucrative proposition as just by staking. The generated yield is redirected to invest in all the new platforms launching in the future without forcing the new projects to change/skew the rule to give an advantage to MINE stakers.

  • For new projects launching in the platform, they know the commission they are paying to the platform is actually being used to invest in the same project with a long term view not to just dump the token after launch.

  • Same can be applied to Pylon Scout as well, the commission pylon will generate from the event can be used to buy the token whatever the final sell price decided at the end of the Scout event. which will be distributed among the MINE stakers.

Note : The above steps will earn extra project tokens along with the regular Airdrop that the new Projects allocated toward the Mine stakers.

With the above changes, we can fix the incentive model for MINE staking once for all.

  • People will be incentivized to stake more MINE(current perception is staking >100K mine is not useful) as more mine staked more tokens can be accumulated from future project launch.

  • People will be incentivized to stake and forget as they are sure they will be getting some allocation from the future projects without doing KYC or fighting with bots.

  • Projects will be more comfortable as Pylon is not demanding any favourable treatment for MINE stakers as MINE stakers as a whole participate in the process decided by the Project itself.

7 Likes

I like your idea. Love the concept of staking Mine to get other tokens. I absolutely agree, that a lot of us are not interested in holding a giant bag of MINE to accumulate more MINE, we want in on these IDO tokens at venture capital prices.

Investing the protocols own fees back into the Pylon pools to accurate tokens for stakers is genius. A lot of US participants are upset that we can’t participate in swaps, or Star Terra IDOs. So the only way for US citizens to get in on IDOs is through Pylon Pools.

1 Like

I think the idea has a big drawback unfortunately. The gateway usage has to be well planned by each of us. If I enter it I know that additional partecipants will lower my share of reward making the token more expensive: i am therefore taking a risk. Knowing that the protocol itself is adding money by design without even considering the price is detrimental to the success of each pool as it will work against my investment reducing the amount of coins I will buy with the same investment. Every rational investor will think the same way and avoid the gateway.

This is a constructive proposal, it improves alignment of interests by giving $mine token holders more of what they want (i.e, IDO tokens) and an advantage over outsiders within the Pools format (which they do not have today.)

+1 from me.
I would vote for it!

2 Likes

Gateway in its current form also has the same issue as we can’t forsee what will be the total TVL after we locked our fund for 18months. So we usually do the research to see if the project has the potential before committing the fund knowing that our share of the pool may get diluted if the project gets steam.

Now think about the case where not enough people are backing the project (less money in the pool) and the team doesn’t have sufficient funds to execute the project and hence loss to the early backers.

So yes your share will get diluted (my opinion is it’s very less as the commission of pylon is 20% of 20% of TVL through the whole pool period) in return now the whole pylon community incentive is aligned for the success of the project instead of only the users who deposited on the pool.

So in my opinion it does more good than harm by using the protocol fee for investment in the pool.

And anyway, the governance will choose a pool either (18 , 12 or 6) to put the protocol fee so the user has the freedom to choose the other 2 pools if the concern is the dilution of the share.

Lets me know your thoughts.

I really like the idea to slow / stop $MINE buybacks and instead use that to invest in Pylon Pools or IDOs. Agree with some of the points above (e.g., it does, in a way, dilute other participants in the Pylon Pool), but perhaps there are special allocations we can work out directly with the protocol partners.

1 Like

I would vote against it but i think can be improved in a way that i would accept: read all :smiley: ; to make it clear I understand your point and I appreciate every suggestion (and none of us holds the truth so I just defend my personal view in an hopefully constructive way). Pylon has to attract users not partecpate directly to the gateway (but let’s come back on this at the end). I see a lot of cases for the stakers. Already the fact that an IDO gives a percentage of its treasure to pylon and this is airdropped to stakers or managed through governance is a good value.
To me the core problem now is to make the governance effective not only by voting but also by proposing.
Think about mirror: there the whitelisting is done through parametrized smart contracts handled proposals and votation through governance with a reward for active partecipation. Nothing is hidden or improvised.
Gateway pools could be parametrized the same way. Some fix values (editable through new pylon versions) and some others which are proposed by the ido issuer (of course after discussions). Then the proposed gateway xxx is voted. Just look a random gateway like valkyrie: quite everything can be parametrized in a proposal (also the airdrop criteria to mine stakers which will then be transparent). I would add an escrow (also parametrized) so that the ido issuer has to fullfill a roadmap or doesnt get the full redirection at given critical predefined block numbers.
Now coming back to your proposal: in the context of a governance managed smart contract could make sense to have a parameter in which is possible to define if some capital is redirected to buy tokens instead of mine to be redistributed among stakers. As it is I think could discourage the gateway clients but if a gateway is approved with that parameter enabled and this is done intelligently and accepted by proposer (ido issuer) and mine stakers we can then measure the effect. We can also leave all like it is and have a fourth pool (parametrizable) where at a certain block the mine stakers can offer at the price of the cheapest of the 3 pools (unlocking it before) and proportionally to what they stake: all this should be thought and parametrized and voted through governance. This would allow to have an incentive to stake without harming gateway clients. More: would be gateway xxx specific and make very important the governance. Even more: would make out of pylon gateway a DAO which is the real deal in my opinion. Last: would put pylon at the hedge of launchpads as all what I have seen is very centralized and based on in person untransparent deal making.

I second the vote against. I already don’t use Gateway because I have no idea how the yield will change and fully expect people to ape in even after it’s unprofitable. Adding MINE funds to these pools exacerbates this problem as well as creates new problems – what if I unstake before 18 months? What if I stake right before the 18 month trigger?

Access to IDOs + IDO creator payments should be what MINE holders receive. These should be linearly paid out daily over 6-12 months to encourage long term MINE staking and to minimize the current price swings we see around new launches