Summary
The Shyft DAO would like to propose a Shyft community vote on the launch of “SHFT staking”, the next phase in Shyft’s Byfrost roadmap.
The launch of SHFT staking will provide token holders the ability to bond and stake their SHFT tokens and receive rewards in return.
Motivation
The Byfrost bridge will be distributed to participants that run validation nodes across a variety of blockchain protocols and aggregate the last-available secure blocks based on each blockchain’s security thresholds into a single aggregated merkle tree block header.
This aggregated merkle tree block header is then distributed to each of the connected blockchain protocols, enabling asset portability, identity passporting, et al.
Much like how a POW system rewards miners in tokens for single-network security, the Byfrost Bridge rewards participants for being these validating aggregators of ecosystem security and transportability (reward).
Through the launch of SHFT staking, the Shyft DAO seeks approval from the Shyft community to give SHFT token holders the opportunity to prepare for the launch of the Byfrost bridge and practice securing the bridge by staking their tokens.
As a reward for taking their SHFT tokens and preparing for the security of the Byfrost bridge, the proposal will have SHFT token holders receive staking rewards in the form of SHFT tokens.
Proposal
The Shyft DAO proposes to start a staking initiative where SHFT holders can bond and stake their SHFT tokens and receive a reward for their contribution to the preparation of the Byfrost bridge security.
A staking contract will be deployed on the Shyft Network mainnet for SHFT token holders to stake their SHFT. (Details for the staking contract can be found here, contract will be fully audited by Zokyo before going live)
The Shyft DAO Treasury and Economic committee proposes:
2.1 million SHFT staking reward allocation per staking cycle at launch.
28 days duration per staking cycle at the end of which each SHFT token holder who staked will be able to claim their rewards.
Rewards will be allocated based on the amount of SHFT tokens staked and the duration for which the SHFT tokens are staked, relative to all other stakers.
Important considerations:
SHFT token holders may begin to stake at any moment during the staking cycle. Their reward will vary based on how long their SHFT have been staked. For example, if Bob stakes 100 SHFT on the 1st day of the cycle and Alice then stakes 100 SHFT on the 15th day of the cycle, and each leaves their SHFT staked for the remaining duration of the cycle, Alice will receive rewards that correspond to one quarter of what Bob will receive, since Alice’s stake received 25% of the total pool - 50% of the total reward for the remaining 50% of the time left in the staking cycle.
The incentive amount for a particular cycle is fixed at the beginning of that cycle; the Shyft DAO Treasury and Economics Committee may adjust the incentive amount for future cycles, and regulate it up or down as needed, without prior notice.
Once staked, SHFT tokens may be unstaked by their holder. Upon successful unstaking, tokens will remain bonded for 28 days. In other words, the SHFT holder will need to wait an additional 28 days before they can transfer the SHFT tokens to another wallet.
Staking can be facilitated from any wallet that supports SHFT, including Metamask or Ledger Nano S and X.
Feedback Period
The feedback process begins now and is expected to end at 20:00 UTC on 12/04/2022. After this, a Snapshot vote is expected to be put up at 21:00 UTC on 12/04/2022 if, in accordance with the rules established for the creation of proposals, there is sufficient interest and support for the proposal from the community.
Following the feedback period, the voting period will last for 5 days thereafter (i.e. until 19:00 UTC on 17/04/2022) for the community members to cast their votes in accordance with the rules established for voting.
Actions
For: Shyft staking mechanisms will be deployed to the Shyft mainnet with these parameters.
Against: Shyft staking mechanisms will NOT be deployed to the Shyft mainnet with these parameters.
