dApp Staking - Astar Foundation Proposal & Next steps

Astar
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Hi Astar Collective

As one of the drivers of the Astar Collective, the Astar Foundation would like to open up further discussions related to dApp Staking. This thread is opened after comprehensive discussions within our community where certain changes have been raised to improve our current dApp Staking v3.

Related threads:

Before delving deeper, I would like to emphasize that this thread is to foster further discussions related to dApp Staking following our Rules of Engagement. We are looking to enhance our core feature for the long-term future and not discuss past issues because those have been highlighted more than enough in other threads.

When sharing ideas:

  • Always back your points with proof and present them clearly.
  • Keep the discussions productive.
  • Avoid emotive, inflammatory, or unsubstantiated claims. Such behavior disrupts the communityā€™s goodwill and may lead to content removal or suspension.

What Already Started

  • dApp Staking Code of Conduct:
    It has been several years since the dApp Staking system has been operational within the community. During this time, while many projects have utilized the system, several issues have been raised and discussed within the community. Among these, voices are calling for changes to the dApp Staking system. In light of this situation, the Community Council has recognized the need for a solid and logical framework that leads to the growth of the Astar ecosystem by first correctly understanding and organizing the basics. The code of conduct will fit the Astar Collective vision.

    Read the full proposal here: Proposal for dApp Staking Code of Conduct

  • Move Functionality:
    One thing that the community has brought up is the issue of moving their stake from one dApp to another without losing the bonus reward. Right now, thereā€™s no incentive to do that because the staker has nothing to gain, only lose! The issue has been discussed on GitHub (ref) and is further being built as a draft PR.

    The implementation timeline, including runtime upgrade, will be followed during the next ā€˜Votingā€™ period. Learn more

  • Next dApp Cycle Marketing Push
    We need to drive positive sentiment about dApp Staking for outside audiences using the good points that we currently have and, at the same time, highlighting upcoming upgrades. Contents about Astar tokenomics should be aimed to be distributed to external audiences. However, tokenomics itself is not ā€˜sexy newsā€™.

    The media will not pick up tokenomics itself. Some of the directions we are thinking about:

    • Prepare better tokenomics material for easier onboarding of new holders/communities. This could be both 1P material and 3P material. 1P material - explainer of tokenomics in more straightforward language with the right visibility (blog post). 3P material - research papers.
    • When we have good news to distribute for Astar, we push it via PR/media/KOL channels and leverage existing materials to showcase strength, including tokenomics primer, research paper, etc, for a more substantial impact. One example of a research paper can be found here.

    We are already actively doing this but will put more resources and budget into these areas. Additionally, we aim to increase the number of stakers in dApp Staking and lock more ASTR from the market. This is not intended to create further inflationary pressure but rather to foster a larger base of long-term, ecosystem-aligned ASTR holders, ultimately enhancing the value of the ecosystem.

  • Anything Else?
    We will continue pushing more CEX to integrate dApp Staking in their staking dashboards. Binance has been a great leader, but itā€™s very challenging to expand this business further to other CEXs. These efforts will continue.

Background Information

Now, the most challenging part. What can we change in the short-term versus long-term? We have to be realistic about whatā€™s possible to change to have a good impact. While thinking further about redesigning dApp Staking, I would like to share the process that had to be done to build out dApp Staking v1 and v3.

Example for v3 (using v3 as example because the initial v1 was done during the design of Astar Network started in 2019, v3 has been openly discussed within the community):

By sharing all the steps mentioned above, I would like to make clear that making a big revamp takes research, architectural design, benchmarking, coding, testing, auditing, and fine-tuning. So, I would like to emphasize to everyone that the whole process took us more than one year, so please understand that our engineering and Astar Foundation arenā€™t that reluctant to change big things. We spent sweat, blood, and tears on this design and allocated a lot of funds to work this out, where we included our community from the first day of its design till the day it went live.

Because Astar Foundation was involved from day 1, and we have a full understanding of our intentions and design, we still feel we have created something unique with a strong foundation.

Because of this Astar Foundation, as part of the Astar Collective, we would like to propose opening up this discussion related to adjusting parameters instead of the foundation on which itā€™s built.

Astar Foundation Proposal

  1. Introduce a new call to our runtime set_static_tier_params, root-only permission. This means that all parameters can be changed through a governance referendum.
  2. When this new call is introduce we can do the following changes:

What we are thinking about changing that needs further discussion:

  • Reward Distribution
    • The percentage of the total reward amount going to which tier (e.g., 25% of the total dApp reward pool goes to tier 1 pool).
    • The sum of percentages can be less than 100% (basically burning part of the rewards if 100% is not met).
    • Keep in mind there are tier rank rewards, which means that as dApp earns more support within the tier, it can earn up to double the tier rewards.
  • SlotPortions
    • The percentage of slots assigned to each tier (e.g. 5% of total slot number goes towards tier 1 dApps)
    • The sum of percentages can be less than 100% (basically eliminating capacity and reduce slots)
  • Tier Thresholds
    • The percentage of the total issuance that defines the tier entry threshold (e.g. for tier 1, dApp might need to have staked between 3.57% and 2.38% of the total issuance).
    • More detailed formulas can be found here: dApp Staking v3 Technical Overview | Welcome to Astar

An additional option will be added to also change the formula for calculating the base number of slots. For Astar itā€™s defined as 100 slots at price 0.05$.

number_of_slotsAstarā€‹=floor(1000āˆ—ASTR_USDā€‹+50)

This formula is a very simple linear equation (y = a*x + b). Therefore, itā€™s very simple to also allow the setting of a and b via the aforementioned call. We are still in discussion to see if this should be implemented.

The objective coming from recent discussions inside the community is to create a more ecosystem growth-aligned inflation and, if possible, decrease inflationary pressure.

Whatā€™s Next?

  1. Use this thread to understand if the community agrees on the Astar Foundation approach or wait for more proposals coming from the Astar Collective. As Astar Foundation, I believe we should seek broader input on the direction of Astar beyond just aligning with our direction. If the community thinks another direction is better than the existing one, the Astar Foundation should support those proposals in the best interest of Astar Network and its token.
  2. If the community agrees on the Astar Foundationā€™s proposal with the focus on adjusting the parameters above as a short-term solution. We have created a spreadsheet with the current parameters of our tokenomics. This spreadsheet will be the working document to find a more balanced system in the current framework. You can already check the spreadsheet here. Please note that certain parameters can not be modified but this will be explained when moving the direction is approved.
  3. Gather suggestions from the community based on this spreadsheet backed by their research and reasoning.
  4. Apply new parameters through onchain governance referendum.

I hope by creating this thread, the Astar Foundation shows its everlasting commitment to Astar Network and its Collective.

Disclaimer: This discussion is solely focused on adjusting the parameters of dApp Staking V3 and does not involve proposals for V4, reverting to V2, or modifying the core architecture of dApp Staking. Please keep feedback and suggestions relevant to the optimization of V3 parameters. Broader discussions about the overall structure or validity of V3 fall outside the scope of this thread and can be discussed in separate topics.

Kind regards
Maarten Henskens
Head of Astar Foundation

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Very good @Maarten I canā€™t wait to see how Astarā€™s dApp staking evolves (because it absolutely has great potential) I would like to see a nice change both on the qualitative side of the dApps, that is, a dApp must bring value to the Astar ecosystem and at the same time be a dApp that is useful and therefore interesting for users and both on the rewards/incentives side both speaking for the stakers and for the builders, letā€™s say make it more balanced. Go Maarten, Go Astar :star:

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We have definitely seen how the community of Stakers and Founders of dApps in the Astar ecosystem have mentioned their dissatisfaction with the current system, by opening this thread we are opening the conversations that have been made in multiple threads to finally reach a conclusion.

I do not have much more to contribute, I would like to see the participation of those people who have shown their dissatisfaction and thus help as much as possible so that, as Astar Collective, we reach an efficient solution.

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Thanks for the proposal!

I am glad to hear that the flexibility of Bonus Reward will be implemented in the next voting period.
I fully agree with the changes to each parameter, as I have suggested several times. The importance of the parameter changes in my mind are as follows

Reward Distribution ā¼ SlotPortions > Tier Thresholds

Regarding Tier Thresholds, I am not sure if lowering the requirement is the right answer, as the environment will change as more Stakers are added. However, the current specification is to raise the threshold when the ASTR price falls, but it is likely that more holders will give up their ASTRs during the decline phase, so it may be difficult for dApps if this specification is left as it is. The only concrete way I can think of to improve this is to make the threshold a fixed percentage, so if anyone has any other good ideas, I would like to hear them.

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good morning, I believe that in addition to the points listed, it is necessary to reevaluate the rewards for stakersā€¦ in my opinion, and the market is excellent proof of this, they are too highā€¦ they create too much competition for the dapps themselves, making the user lazy to use themā€¦ if we continue with these percentages, the passive share will continue to be the greatest incentive to buy Astar, whereas the use of the network should beā€¦

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Agree. But the use of the network today according to the proposals received by the foundation must focus on the utility of the token on Soneium. This is what we understood, since no one talks about dappstaking and governance, except with trivial small changes to the current state, a state that has brought the entire Astar ecosystem to depression. The developers on Astar are few, there are no great results, just look at the numbers onchain and currently they do not even have large economic incentives with the current v3 system. In fact, there have been no new listing proposals for months. We certainly did not want a technical answer on how to change these two points(better talk in dedicated thread, if censure donā€™t startā€¦) but only if you were aware that these two things are much more important than they want you to think. It is probably a conscious choice, which is why we asked which of the two points Sota and the foundation wanted to follow. If the decision is to make development on Astar ā€œaccessoryā€ to all the narratives they are working on, it is acceptable as long as, as you say, the issuance of tokens and their spending is regulated, possibly avoiding having spending votes in which few people participate, but assuming full responsibility for it as a foundation, with good or bad results (for example ACS).
These are the right questions to ask, the astar-soneium association can only be positive for us investors, but also the care of $astr and the definition of the extra Soneium use is something of priority. Astar is technically a development platform, letā€™s remember that.

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This forum post is related to dApp Staking parameter changes.
Letā€™s keep the conversation around this. If you would like to discuss other things, please use the threads related to that topic.

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Yes thatā€™s also possible, as you can see in the spreadsheet we can make the adjustment regarding rewards for users.

You can already see this onchain where a root call can change the
inflation - inflationParams

Before adjusting this one of the measures we want to take with marketing activities is to bring more TVL and stakers on dApp Staking. More TVL is reducing the APY. We should try this first to showcase dApp Staking power.

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Nope, this post is about your ideas on dapp staking parameters. It may be that there are people who do not agree with your idea, who simply cannot write and are censored (you deleted 2 of our messages). I donā€™t know what you have against us. We probably hit exactly what the critical issues are, which apparently you cannot address for a matter of time, rather than desire, or to not throw away past work. I cannot address the discussion on dapp staking, I can only address the discussion on something to which you have given limits and prohibitions. Reread your post, there are more prohibitions than real proposals, all that to write that you want to reformulate some numbers regarding the tiers.
Do it, you are the head of the Astar foundation, no one can prohibit it, but stop pretending that there is a real comparison. That is not the case.
You have to allow the discussion here, you can also not do it, we are nobody. But stop pretending that we are in an ecosystem where collaboration and decentralized voting prevail. This is not the case and this is also one of the reasons why not only we, but many investors, are currently angry and have questions.

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I believe you have already done a lot to encourage dappstaking to date, yet this strategy has not increased the TVL, simply because buying astr to hold it passively is not attractive enoughā€¦ as a result a vicious circle is created in which, people donā€™t buy astr and the rewards remain high, the network is not usedā€¦ letā€™s try to think of a different strategy, letā€™s try to channel the holder to use astr instead of holding it stillā€¦ regarding the incentives for dapps, I strongly believe that their opinion needs to be listened to, strict screening carried out and funds allocated to those who provide results within pre-established times. However, I underline the fact that the final aim of the foundation must be the real use of the dapps, the only way to give value to the astr tokenā€¦

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As stated in my post:

  • This proposal is Astar Foundation proposal for dApp Staking! If community not agrees as stated in the post than nothing changes for dApp Staking parameters.

Iā€™m not against anyone but Iā€™m against creating comments without meaningful impact, itā€™s just complaining. Iā€™m also aware when you say us, itā€™s SFY_Labs and all members related to SFY_Labs that are replying here. To also state, messages were not deleted by me but by other mods that are guardian the Rules of Engagement.

Again, this is about dApp Staking parameters to check the sentiment. If you donā€™t agree with this direction, please wait for the voting.

Iā€™m not going to use this thread to keep discussion with SFY team, Iā€™ll move forward with those contribution to what the Astar Foundation want to push as part of the Collective!

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Thank you, Maarten and the Astar Foundation, for opening up this important discussion on dApp Staking V3. Itā€™s clear that a lot of thought, research, and effort have gone into shaping the current model, and I appreciate the transparency in sharing the process behind it.

That said, while changes to the parameters of dApp Staking V3 are necessary to better align incentives and reduce inflationary pressure, we must approach this carefully. Adjustments to reward distribution, slot portions, and tier thresholds can have far-reaching impacts on both existing dApps and future ecosystem growth.

Any modifications should be based on thorough testing, simulations, and community input to ensure they donā€™t create unintended negative consequences. While governance referendums will allow for parameter changes, rushing into adjustments without proper assessment could disrupt the balance of the system.

I support the initiative to refine and optimize V3 rather than overhaul it entirely. However, I also believe we should take a cautious, data-driven approach, leveraging modeling and feedback from dApp developers and stakers to ensure the changes truly benefit the Astar ecosystem in the long run.

Looking forward to hearing more insights from the community on this!

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Thowing out some ideas that may inspire someone / generate conversation:

A: To encourage token lock up, maybe a system of if you keep tokens locked for example 2+ successive Build and Earn periods, you get a higher staking rate.

B: I am involved with another project with high inflation and they are now seriously considering implementing a hardcap. Slightly different scenario to Astar because the incentive for stakers in that project is that they will still earn transaction fees.

C: Reduce the staking rate for investors, but keep the same rate for builders. this is contingent that builder spending is heavily scrutinized and transparent.

Edit:

D: Maybe you canā€™t participate in on-chain governance unless you are in dApp staking.

But can we allow liquid restaking tokens such as nsAstr to be able to participate in governance? This further incentivizes token lock up

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Update on my side.
Sentiment poll has been opened!

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Thanks for opening the discussion regarding this, Maarten, letā€™s see what the community wants to support!

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A few thoughts from my side, as someone who worked on Astar, dApp staking v3 & Tokenomics 2.0 for quite some time.

I made a lengthy post to explain the design choices with dApp staking v3 & Tokenomics 2.0. I donā€™t want to repeat the same information here, even though majority of it is valid.

Some of the choices have proven to be wrong, but have or will be addressed.

Iā€™m sharing this as my opinion, and not that of Astar team/foundation.

dApp Staking v2

Before diving into v3, just a reminder how it used to work like - there was a fixed amount reward pool for each era, irrespective of current ASTR price, locked/staked amount, number of dApps, etc.

That meant that dApps which got in early would earn huge rewards. The less dApps there were, the better it was for the existing ones. A textbook example of the zero sum game.

Imagine a scenario where only a single dApp is registered, and only 1 ASTR out of 7 billion is staked. That dApp earns the entire reward pool each era. Today that would amount to ~230K ASTR per day, but back then it was even more.

Such mechanism allowed dApps with relatively meager staked amount to earn disproportional rewards. Low TVL (or staked amount), with huge emission for dApps - doesnā€™t sound like a good recipe.

Some individuals refer to this period as the age of greatness, when everything was better, more decentralized, more successful, etc. I couldnā€™t disagree more - the only thing that was better was that huge rewards were received for relatively small stake amount.

dApp Staking v3

Letā€™s quickly go over hits & misses of v3, from my perspective.

ā€˜Hitsā€™

  • much more sustainable inflation
  • dApp rewards & tier entry thresholds are adjustable to the price (7-day moving average)
  • zero sum game practically eliminated
  • stake-and-forget eliminated
  • foundation for dApp accountability with subperiods
    • however, only fully possible with the introduction of governance & the community council

ā€˜Missesā€™

  • no intra-tier reward increase (remedied after you425ā€™s proposal)
  • tier configuration which caused many people to be unhappy
    • tier4 meant to be symbolic as the entry point is basically worthless
    • tier1 unachievable with the current TVL
      • truth be told, we wouldnā€™t be having this problem if TVL was ~40-50%
    • the price drop from 0.19$ was hard on the threshold, pushing dApps into lower tiers and cutting rewards drastically
      • in hindsight, the impact should still have been felt, but it should have been much much less
  • the approach with loyalty staking & bonus reward hasnā€™t worked as intended
    • if we had governance and commitment from dApps to do something over a period, then it would have made more sense
    • although the incentive to stake during the Voting subperiod is good to have, staker should (and now will) be able to move their stake a few times at least, without forfeiting the bonus

Future Improvements

There are no concrete improvements in the pipeline at the moment, except for the ones already described:

  • move_stake extrinsic to preserve bonus when moving stake from one dApp to antoher
  • changing tier parameters via a referendum

In hindsight, perhaps the entire approach with dApp rewards should have been different. Just an idea but:

  • stakers lock their tokens and earn rewards
    • they can use this tokens to nominate a dApp, but they also donā€™t have to
    • dApp rewards scale with TVL
  • remove concept of periods/subperiods
  • dApps apply for a ā€˜dynamic grantā€™, and itā€™s either approved or denied using governance
    • community council & regular token holder can both vote/decide
    • the governance system would be more complex then it is now
    • grant amounts would be dynamic with respect to changing market conditions

I believe this would have helped with many issues weā€™re having.
And would have made the whole code base less complex :joy:.

Changing Tier Parameters

From the technical side, with the next Astar upgrade, weā€™ll be able to change tier params via a referendum, as Maarten already described. However, the aim should not be to just reduce thresholds, beef up rewards, etc. This will bring more selling pressure, and regular token holder isnā€™t likely to benefit.

With that being said, some things to keep in mind when changing params:

  • max number of tiers is 4, this cannot be increased without runtime upgrade
  • tiers can be eliminated by setting threshold to 100% TVL and percentage of assigned slots to 0%
    • convenient if we decide to reduce number of tiers
  • there are 10 ranks within the tier, this cannot be changed without runtime upgrade (check official docs for explanation what a rank is)
  • it is possible to ā€œalmost eliminateā€ tiers completely if tier thresholds & rewards are set in such a way that next tier has twice the threshold & reward as the previous one (with how things have been going, this will probably be my suggestion)

Anyways, just some thoughts (not stance or opinion of the Astar Foundation).

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Based on the outcome of the community vote: Proposal to adjust the dApp Staking parameters! changing parameters will be the next steps. Astar Foundation will propose a solution that will be evaluated by the community before making those adjustments.

We will use this thread to keep the community updates about the progress.

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