(Skip to the bottom for technical aspects of the proposal.)
The purpose of this proposal is to ensure that the SPS DAO has a viable strategy for providing rewards distribution for years to come. After my recent post exploring a more sustainable approach to rewards, a DAOn Hall with Matt and Dave as well as many conversations with SPS stakeholders, I've put together a proposal based on that feedback to present for the DAO's consideration.
I'd encourage everyone to approach this proposal with an open mind, provide actionable feedback if you desire to do so and most importantly to consider that this proposal is built on compromise to ensure that we all have rewards going forward and that there is no perfect solution that everyone will agree to enact.
The strategy that this proposal aims to implement is similar to my original suggestion of endless exponential decay, but is modified to have boundaries in place that help to mitigate some of the rewards decline. The reason for this is that some of the top stakeholders feel that substantially cutting the rewards over the next 12-24 months while we're trying to market and grow the ecosystem could have a negative impact on our chances at success as well as reduce the incentives of our current player base to stay engaged.
This modified strategy aims to create a compromise where we create a roughly 3 year runway for our exhausted reward pools so that we don't have to be concerned about any abrupt drops and the decline will be much more gradual than the one that I was suggesting with endless exponential decay. Some pools will still have a much longer runway than 3 years as we'd be making this change earlier in their lifecycles.
The main difference with this modified strategy is that after 3 years we will have to start providing rewards, which to be fair we'd have likely needed to start supplementing rewards after 2 or 3 years with my suggested solution anyway as they would be trailing off significantly at that point. In short, we get the benefits of extending our rewards runway without dedicating a large portion of the tokens to the low end of the endless exponential distribution model.
If this proposal passes, the SPS DAO will reallocate the remainder of the unused tokens from our LP incentives rewards pool in the following ways:
The distribution function will be changed as follows:
- Z = MAX(X*0.7, MIN(Y*0.05, X*0.9))
- Z = New Monthly Reward Allocation
- X = Current Monthly Reward Allocation (See table below for reference.)
- Y = Reward Pool Balance
If you'd like to see tables of how this impacts each rewards pool specifically click here.
Additionally, to help further incentivize staking and offset the rewards reduction, the Splinterlands team has agreed to help bolster Voucher incentives by releasing at least 10 Voucher exclusive cards and one exclusive cosmetic item that can only be purchased with Vouchers per year. This should also help Land as each of the Voucher exclusive cards will have its own auction cycle.