Konijntje - Sperax Community Manager.
May 23, 2023
Simple Summary [TL;DR]
Creating an option for early unlocking SPA tokens - for a penalty that benefits stakers and burns SPA in the process. I’l call it the Early Exit system.
At Sperax and other projects, we often see the question if it is possible to unlock tokens earlier then the lock time ends. Of course the answer is no. Maximum locking time increases rewards and is a sign of trust from the user. It is not that we lack compassion for users who are in need to unlock, there can always be circumstances that users may want to choose for this option. But rules are in place to protect and strengthen the Sperax ecosystem, and users know the rules when they start a lock.
But what if we could help these users who want to unlock, while also helping the Sperax ecosystem in the process?
I would like to propose an implementation of a “Early Exit” system, where the user may exit their locked SPA positions for a penalty.
What happens with the penalty that is imposed on the user who wishes to unlock early? I propose that half of the $SPA is burned, and half is distributed to loyal stakers who remain staked. This creates additional burning of the $SPA token, and creates an additional revenue stream to people who remain staked. Basically the same as we are doing for USDS buybacks. Lastly, the user who needs to unstake due to circumstances, has the option to do so, with getting more tokens back the longer he is staked.
Of course, it’s nice to hear everyone’s thoughts if they like this idea or not, but if you do, the biggest remaining question is the penalty amount. What is reasonable to start with, and towards what percentage does the penalty decrease if the user is very close to unlocking? I was personally thinking to start with 70%, no matter the lock period set by the user. This percentage decreases the closer you get to unlocking, and perhaps it’s good to have 1% remaining when the unlock is two weeks away or so.
Furthermore, the question is if there should be a minimum lock time until this early exit system is unlocked, and if there should be a maximum lock time until it remains the same percentage until the unlock is there.
I am not a tokenomic designer or math genius though, so feel very free to make suggestions here!
None yet, need some help from devs if this proposal is liked enough to be moved to a vote, and is finalised in specifications.
Thanks for reading and I am looking forwards to your feedback!