I was digging deep into dApps staking and want to get some thoughts from others on dApps staking.
Based on the current model and infographics, currently the following economics model applies:
- Reward ratio of 50:40:10 going to validators:dev team:nominators
- If inflation is at 10% and let’s say 100% staked (not realistic by the way), that means nominators will only get 1% staking reward while inflation is at 10%. This would mean stakers would have a real return of -9%
- If 50% staked (more realistic) and inflation is still at 10%, the distribution at 50:40:10 ratio will give stakers 2%, still a real return of -8%
I believe that in order to incentivize nominators to stake, we’ll need to get the basic return for stakers to be on par with inflation or slightly better.
That means at 50% staked and inflation of 10%, nominators will need to have 50% of the reward pool to generate reward at the same as inflation at 10%. That’s a rather high number.
In a different scenario where it’s 40% staked, the economics can allow stakers to have 40% of reward pool to generate equal staking reward of 10% to be on par with inflation of 10%. This leaves 60% of staking rewards pool to be allocated to validators and dApps devs.
There’s an ideal balance somewhere. I think this economic model needs further discussion and fine tuning. Any thoughts?