dApp staking rewards changes

[FFR23]

Discussion to increase the dApp staking rewards for tier 4

Justification:

Currently tier 4 may aswell not exist

No project is making tier 1

Proposal is to change it to a 3 tier system.

Solution:

Combine tier 1 and tier 2 and they receive current tier 1 rewards

Tier 3 receive current tier 2 rewards

Tier 4 receive current tier 3 rewards

(Open to discussion / suggestions on the above)

Closing Thoughts:

dApp staking is no longer an incubator for smaller projects and there is minimal on chain activity or development

This change should coincide with the new more strict requirements for projects engaging in dApp staking

[tora0515]

I’m glad to see this discussion being raised.

While the motivation and intent behind the dApp staking system is in the right place, I think the current structure doesn’t effectively encourage or incubate new projects sufficiently.

So we have a concept that is well meaning but an execution that is lacking.

I see two main issues:

1. The lack of non-early adopter teams in the ecosystem.
2. Structural issues in how the v3 system is designed.

Observations on lack of Non-early Adaptor Astar Projects:

1. Teams led by early adopters dominate the higher tiers or rankings within their respective tiers.
2. Many of these projects benefit from a few large backers who re-stake almost immediately at the start of the new period, further cementing their positions.
3. dApp governance is largely done by a few Astar insiders instead of the broader community. This is not meant negatively, just objectively we are seeing low turnout and those that do turnout are often ambassadors or core members vs regular users or even those that stake.

Challenges in the System’s Design:

1. New Projects Struggling to Gain Ground:
   New teams often start in Tier 4 where rewards are far from sufficient to support meaningful incubation or development.
2. Uneven Competition:
   New projects must compete against well-established teams that are already near or at development completion. This results in a situation where projects needing funds for growth are at a significant disadvantage, while well-established ones are effectively “grandfathered in.”
3. Unused Spots and Tier Cut-offs:

• Many spots across all tiers remain unfilled, raising questions about whether the system promotes new project development.
• The Tier thresholds are miss-calibrated:
  I don’t believe we’ve seen an actual project in Tier 1. The closest project that is in Tier 2 would require an additional stake of 65 million Astar (a 25% increase), and the next project would need more than double their current staked Astar.
  Similar gaps exist between Tiers 3 and 2, where the top project needs need roughly 25% more and the second needs 100% more staking to move up.

4. Distribution of Rewards by Tier

• There is greater than a 10x increase between Tiers 3 and 4. The idea is that there should be motivation to push teams to jump from tier 4 to tier 3. But we are not seeing this as stakers do not have an incentive to change their behaviour: It is easier to restake on the same thing that you know, then to research every project in the program and assign your stake accordingly.

Possible Solutions:

1. Redistribute Astar Rewards:
   Should more rewards be allocated to lower tiers at the expense of higher ones? Would this be fair to projects that have already earned community support or achieved success? Would this promote more teams to build on Astar Network if they new there was support?

2. Optimize Tier Spots:
   Should the number of spots in each tier be reduced to reflect the current volume of projects, permanently or adjusted every year/period? Are these spots unused because Astar hasn’t done enough to attract new builders, or because the current incubation rewards are insufficient?

3. Adjust Tier Thresholds:
   Should we lower the staking requirements for each tier? Could this incentivize new projects, or might it lead to unintended inflationary effects? Or should we create tiers relative to the total number of projects? Always X number of projects in Tier Y and only allow Z number of projects to join?

4. Redistribute Rewards per Era
   Is Tier 1 too expensive and can that be redistributed to the lower Tiers? Is it fair or equitable to increase Tier 4 and Tier 3 rewards to make the program more beneficial to newer projects/teams? How will this effect the inflation rate?

These are just some ideas, not an exhaustive list, but what I could come up with while my kid tries to smash their hands on my keyboard. So I hope we can generate more discussion and hopefully come up with a system that promotes project growth.

[Juminstock]

Hi @FFR23, thanks for creating this post in the Astar forum, it is such an important and never ending topic of conversation because we will always be looking to improve the system.

Also, thank you @tora0515 for raising these points which are extremely true, accurate and well explained.

Yes, we have definitely seen a decreasing amount of projects wanting to be included in Astar’s dApp Staking. As an ambassador I have been in charge of advising some projects in my region that wanted to be included, but the community simply voted against it and the teams decided to go to other protocols… this was clearly a mistake on our part.

Like tora on these points, I think that the stakers have no motivation to do research on projects that are at lower levels (Tier 3 and 4) so they simply prefer to do re-staking on projects that they already know and that they know have not had problems. For me our five main actions to execute to improve the system should be:

1. plan and design a dynamic that increases the participation of stakers in projects that are in lower Tiers. How? I imagine something like Astar publishing them in their social networks as soon as they are listed, make micro-campaigns by Astar to boost participation or, donate a small amount to the marketing of such projects.

2. Increase the methods of obtaining the $ASTR token. I have witnessed how difficult it is for some users who are newbies or who come from other protocols to obtain the token that drives our economy, either because they do not want to use Binance or any CEX, or because they do not understand how DEXs work. That is why, designing multiple applications that allow us to make an effective onboarding of this is vital to increase the use of this token.

3. Better the dApp Staking V3 system itself. I have read multiple times from many developers and community members that they are not satisfied with the current model, and as @tora0515 mentioned above, there are unused seats, very low rewards (Tier 3) and hard to reach seats (Tier 1). How? I don’t really have enough knowledge on this part but, @you425, it’s great and could give us good ideas.

4. Make the participation process clearer. As I mentioned above, I was in charge of advising several projects to be included in the dApp Staking and no matter how much I explained it and had meetings with the teams, there were doubts about the processes, so I think we have the obligation to make clearer what developers and stakers should do.

5. We need global events to help us spread the word about this system and increase participation. Meetups, workshops, talks at external events and more, we need to increase our presence globally and spread the message of the existence of our dApp Staking system.

These are my thoughts on the subject.

[you425]

Thanks for the proposal, I agree with you.

As I have posted in several threads before, I think now is the time to adjust each parameter.

dApp staking v3 - tier algorithm adjustment proosal

I certainly like the idea of changing the Tier setting in the first place. However, my suggestion was to make the rewards on the way from the current tier to the next tier as linear as possible. The current implementation does not do that (of course, if the community thinks this is fine, this is fine too). Why should we not set different percentages? I think the most appropriate thing to do is to change both the Tier parameters and the percentages of ranks per Tier. As a concrete example, h…

I think it is reasonable to change the assignment of each slot rather than reduce the Tier. There is very little development cost since it is only a change in parameters. My previous suggested parameter changes would be as follows

Slot Portions

• Tier1: 5% → 4% (-1%)
• Tier2: 20% → 16% (-4%)
• Tier3: 30%
• Tier4: 45% → 50% (+5%)

Rewards

• Tier1: 25% → 22% (-3%)
• Tier2: 47% → 40% (-7%)
• Tier3: 25% → 30% (+5%)
• Tier4: 3% → 8% (+5%)

Simulation($ASTR=$0.06)

Or reducing the overall number of slots would be useful.

[Matt]

I completely agree with the approach of redistributing the slot portions and rewards percentages across the tiers to create a more linear and balanced progression. The proposed changes effectively address the current uneven reward structure by making adjustments that are both fairer and easy to implement, given the low development cost. The suggestion to increase Tier3 and Tier4 rewards while slightly reducing those for Tier1 and Tier2 ensures broader participation and engagement, benefiting the community as a whole. Moreover, incorporating simulations adds transparency and provides a clear view of the potential impact, making this proposal a practical and well-considered solution.

[pitcoin777]

I don’t believe major changes will be made to the dApp staking system at this time. The transition from V2 to V3 took nearly 12 months of research, testing, and development before being implemented on Astar main net. These are not as simple to modify as they might seem. However, I do like the suggestions and think it’s relevant for tier 1 dApps to receive a higher percentage.

@Juminstock

1. plan and design a dynamic that increases the participation of stakers in projects that are in lower Tiers. How? I imagine something like Astar publishing them in their social networks as soon as they are listed, make micro-campaigns by Astar to boost participation or, donate a small amount to the marketing of such projects.

This point is a bit controversial… I recall that at the beginning of Astar Network’s mainnet launch, ambassadors, the core team, and Astar’s official profile began promoting dApps and NFTs entering the ecosystem. There were some collections that rug-pulled the community, and holders started blaming Astar for promoting these projects. From the community’s perspective, if Astar was promoting them, it meant the projects were reliable (and to some extent they were, but we are dealing with people/teams, not just contracts). I think this is delicate, and perhaps the Foundation has guidelines about the type of marketing that official profiles can do.

@Juminstock

4. Make the participation process clearer. As I mentioned above, I was in charge of advising several projects to be included in the dApp Staking and no matter how much I explained it and had meetings with the teams, there were doubts about the processes, so I think we have the obligation to make clearer what developers and stakers should do.

The Council is working on developing and updating the guidelines to streamline the onboarding process and ensure that all information about the dApp staking application process is consolidated and easy to understand. Could you share your experience and the challenges you faced (via DM on Telegram, please)? It would be really helpful for us. When I was part of Astar SpaceLabs, onboarding dApps was quite challenging because there was significant difficulty in understanding how the dApp staking mechanism works.

[Juminstock]

@you425

Or reducing the overall number of slots would be useful.

I like the simplicity and visuality of your explanations, mate .

@pitcoin777

This point is a bit controversial… I recall that at the beginning of Astar Network’s mainnet launch, ambassadors, the core team, and Astar’s official profile began promoting dApps and NFTs entering the ecosystem. There were some collections that rug-pulled the community, and holders started blaming Astar for promoting these projects.

This is a good point, pitcoin, thanks for bringing it up. The problem is that we have seen countless times how people in the community attack Astar for what other projects do, so I totally understand your point.

I would love to find a point of balance in all of this.

@pitcoin777

The Council is working on developing and updating the guidelines to streamline the onboarding process and ensure that all information about the dApp staking application process is consolidated and easy to understand. Could you share your experience and the challenges you faced (via DM on Telegram, please)?

What great news! Glad to hear this is being worked on. Of course I will share with you the challenges I faced, I will compile them all and share them with you very soon :D.

[FFR23]

I don’t believe major changes will be made to the dApp staking system at this time. The transition from V2 to V3 took nearly 12 months of research, testing, and development before being implemented on Astar main net. These are not as simple to modify as they might seem. However, I do like the suggestions and think it’s relevant for tier 1 dApps to receive a higher percentage.

This is a lazy excuse if this is how the core team feels. The system is nowhere near perfect and NEEDS to be refined. We now have actual production data of V3 being live and not theory / hypothesis.

I really hope the core team are gathering feedback from teams in regards how they feel about the current setup. (but i doubt it)

There has been only negative feedback given in this forum, and the general consensus is that dApp staking no longer incubates smaller projects.

The current implementation is flawed and Astar is failing (we have no users, governance, dead projects everywhere).

We need to work on this incase the Sonium hype doesn’t materialize.

[Dino]

The lazy core team is gathering feedback, but I personally don’t see anything new compared to e.g. 6 months ago. I did a few lengthy posts explaining the reasoning why the system works like it works back then.

One such post, where I tried to summarize everything can be found here: dApps Staking v3 - proposal - #159 by Dino.

Currently there is 2.2B ASTR locked in dApp staking.
Total issuance is ~8.3B ASTR.
That’s ~26.5% TVL.
Total APR for staking (with bonus) is ~21%.
That’s pretty high for an established & not highly speculative product (ofc, my opinion).

The TVL, which is good for the network, should be higher.
Will beefing up slot rewards help with this?
I don’t believe it will.

The feature for moving the stake around, without loosing the bonus, will be available soonish. This should give the much needed dynamic to the system that has been requested - it’s actually something that should help projects earn better rewards.

[pitcoin777]

Thank you for updating the community, @Dino.
Technical changes require significant resources and months to implement, as they need to go through Shibuya, Shiden, and finally, Astar.

I believe that moving staking without losing the bonus rewards will be an additional incentive for users! In my community, Brazil, I feel this is a significant pain point. This will be a great help.

[FFR23]

This is why we’re cooked…you’re not taking into account that projects need funding to build.

There’s another dimension here that isn’t captured in your data - so yes it’s lazy

Edit: ok lazy is harsh, more like inefficient.

I promise you teams in every tier (especially 4) are crying out for a better system.

How can we expect any users on Astar if there is no development happening?

Incase you havn’t looked, it’s a ghost town right now, so clearly your data / parameters are wrong

[DrCAO]

Thank you very much for this proposal, one thing I want to mention is that there are Astar from the fundation that will be used to stake and support the early projects who are new, I think that can help a little bit, but yes, I agree that it is still not enough for most other new projects in tier 4 and there should be enough reward for them to keep building and move to tier 3, right now, they are mostly rely on the astar staking from user, and if we consider the tech part, maybe we could have some additional astar that can be used to support the tech dev part.