[MRC-1] Mars Hub Staking Rewards

Summary

This proposal aims to 1) obtain 9M MARS from the community pool funds and 2) Use these MARS to help secure the Mars Hub by rewarding Mars Hub stakers for a period of 12 months.

Abstract

We propose here that Mars Hub stakers are collectively rewarded 750,000 MARS per month for a total of 12 months (i.e. a total of 9M MARS). We also propose here that the Mars Community approve a spend of 9M Mars from the Mars Community pool to fund these rewards.

Motivation

Protocol revenue at launch will likely be low and so the rewards to stakers will also be low. To ensure the integrity of Mars Hub isn’t compromised, validators and stakers need to be rewarded well (in the form of additional Mars governance power through MARS) to foster a secure and healthy validator ecosystem.

Specification

It is proposed that 12 months of rewards be implemented pursuant to this proposal.These MARS rewards would be taken from the community pool on Mars Hub and rewarded directly to validators/stakers on the Mars Hub.

Risks

The main risk associated with this proposal is that the proposed rewards could be insufficient to create the targeted level of security. In the event this were to occur, additional MIPs should be submitted to amend the incentivised staking program

Implementation

This proposal, if successful, will be binding and enforced as it requires only on-chain infrastructure and can be implemented automatically upon the voting period elapsing. To do so, the MsgCreateSchedule message shall be executed. This will automatically obtain the required funds from the community pool and distribute the rewards to stakers every block

Disclaimers/Disclosures

This proposal is being made by Delphi Labs Ltd., a British Virgin Islands limited company. Delphi Labs engages in incubation, investment, research and development relevant to multiple ecosystems and protocols, including the Mars Protocol. Delphi Labs and certain of its service providers and equity holders own MARS tokens and have financial interests related to this proposal. Additionally, Delphi Labs is one of several entities associated with one another under the “Delphi Digital” brand. Delphi Digital’s associated entities and/or equityholders or service providers of such entities may hold MARS and may have financial interests related to this proposal. All such entities, service providers, equity holders and other related persons may also have financial interests in complementary or competing projects or ecosystems, entities or tokens, including Osmosis/OSMO. These statements are intended to disclose relevant facts and to help identify potential conflicts of interest, and should not be misconstrued as a complete description of all relevant interests or conflicts of interests; nor should they be construed as a recommendation to purchase or acquire any token or security.

This proposal is also subject to and qualified by the Mars Disclaimers/Disclosures. Delphi Labs may lack access to all relevant facts or may have failed to give appropriate weighting to available facts. Delphi Labs is not making any representation, warranty or guarantee regarding the accuracy or completeness of the statements herein, and Delphi Labs shall have no liability in the event of losses or damages ensuing from approval or rejection or other handling of the proposal. Each user and voter should undertake their own research and make their own independent interpretation and analysis of all relevant facts and issues to arrive at their own personal determinations of how to vote on the proposal.

5 Likes

In full support of this proposal. Whether this amount is sufficient will depend entirely on whatever price $MARS settles at post-airdrop.

2 Likes

Hi,
Great proposal, good way to secure simple dumping for legacy Mars holders.
What would be the difference in reward for validator vs a staker? And can this then be made visible?

1 Like

I support this to keep the legacy investors engaged more in the security. Are we considering locked staking periods for additional rewards up to 12 months. Similar to the lock drops for the genesis launch. 3 → 6 → 9 → 12 months?

Full support of the proposal. This is key to ensure that the network is viable / attractive for those participating until protocol revenues are at a sustainable level to take over / aid.

1 Like

I think this is a challenging question to answer and would require modelling numerous scenarios as there are many variables to consider.
Its highly dependant on the validators business model and the costs that entity incurs. A stakers cost is probably a “risk free rate” the allocated capital would receive if they weren’t to stake, the commission that validator would charge and the risks associated with the valididator the user has delegated to (obviously subjective and very hard to quantify).

No this proposal doesn’t indicate a tiered rewards program.

I support this proposal

2 Likes

This seems like a reasonable way to kickstart network security and demand by offering short term incentives to active network participants. A lock mechanism would be great if it could be implemented, but this may not be technically feasible?

Agreed. Staking rewards will have to be implemented in order to push through the vast unlock coming from the Terra Classic airdrop. While there may be short term pain, in the long run it is better to face lower dilution a year from now than to be a stakeholder in the low mcap/high FDV Samcoin trap.