Burn unclaimed rewards with penalty

Hello,
I have a new proposal to the Lina fam.
I go straight. Let’s get burn unclaimed rewards and put penalty for next rewards. If actually rewards get expired after 2 weeks then those who didn’t claimed at time will lose those rewards forever and will lose 2% (more or less) penalty for the next weekly rewards. What do you think guys ?

5 Likes

Hmm… What do you think this would accomplish?

this is a very creative solution to one of the most commonly expressed concerns voiced by our community: total supply.

burning tokens rewards all LINA holders by reducing supply.

a disadvantage to stakers - they currently receive the rewards forfeited by those who did not claim. stakers who participate in the DAO would have to determine if the reduced supply is enough of an incentive compared to the increased weekly rewards received.

4 Likes

Is there any way for us to see on-chain what percentage of rewards are going unclaimed every week?

2 Likes

I just want to see how much impact this will actually have on total supply, as lowering staking rewards for everyone may make people unhappy. Especially if your claims are already barely covering gas fees at the moment.

Maybe this idea could be implemented with updates to the claiming system to allow users to save on gas.

1 Like

I think this could be a very effective and intelligent way to battle the high inflation of the platform. Especially because this happens when the price of the Lina token drop. The metrics @Majin mentionend should show how much impact this could have. I’m also very interested in the damanded data.

The problem I see, and learned the hard way… Sometimes technical issues can prevent you from claiming your rewards (on the edge). This is very frustrating now, and would be even more frustrating then!

3 Likes

I think its a great idea to burn unclaimed but penalty for next rewards shouldnt be considered. Punishement here is loosing the rewards, so wouldnt recommend to punish somebody twice in most cases not claiming the rewards is caused by bad market conditions and stakers shouldnt be punished for that extra. Its also fair to get rid of tremenodus amount of 10B think max supply is exaggarated. Lastly unclaimed rewards that could be subject to burn goes out not from marketing funds; foundation or anything but from pile of 4B tokens that are meant to reward stakers. So it is not damaging protocol but deflating max circulating supply. IMO idea is great and should be implemented like pronto. :relieved:

10 Likes

Yes the penalty I’m not for it too, just for the rewards is good.

1 Like

I join this idea too, I’m not favorable for the penalty thing but we could split the difference and say
e.g. 50% of unclaimed rewards are just burnt, 50% are redistributed on the claiming pool.

This could obviously be another proportion but you get the picture.

2 Likes

Hey all!

Some numbers for everyone to consider:

Feb 2nd :
Scheduled staking rewards: 16089537
LINA Rollover staking rewards: 7385794.520516955181780253
LINA Total staking rewards: 23475331.520516955181780253
LINA Fees accumulated: 1238.646160776684234628

lUSD Rollover fees: 453.299869257210132077
lUSD Total fees: 1691.946030033894366705 lUSD

Jan 26th :
Scheduled staking rewards: 16417894
LINA Rollover staking rewards: 7929220.159398203504948562
LINA Total staking rewards: 24347114.159398203504948562
LINA Fees accumulated: 1182.55096423143504975

lUSD Rollover fees: 1187.987939436329983238
lUSD Total fees: 2370.538903667765032988 lUSD

Jan 19th :
Scheduled staking rewards: 16752954
LINA Rollover staking rewards: 4884033.879595896712925965
LINA Total staking rewards: 21636987.879595896712925965
LINA Fees accumulated: 631.613712016581301803

lUSD Rollover fees: 696.34684113649560809
lUSD Total fees: 1327.960553153076909893 lUSD

Jan 12th :
Scheduled staking rewards: 17,094,851
LINA Rollover staking rewards: 4,628,301.92833514971462592
LINA Total staking rewards: 21,723,152.92833514971462592
LINA Fees accumulated: 2,623.93284983763384749

lUSD Rollover fees: 630.718070001599077481
lUSD Total fees: 3,254.650919839232924971 lUSD

Some thoughts, for your discussions (and I will assume the proposer is talking about a burn of LINA, not LUSD). I would advise that the community takes some time to digest what a potential burn would mean, i.e. approximately how much of supply would be burnt/week, how does this affect APY and also, maybe there are other options than a burn, like say it’s added to the allocated DAO funds. Etc etc.

Happy discussions!

8 Likes

As per above figures, current unclaimed rewards represent a 36% increase in rewards allocation to stakers.
Note that these figures may be a touch on the high side due to recent market sentiment however in general a burn would mean less APY to stakers.

1 Like

Thank you @Bowser_LinearFinance for providing the data. I think the data points suggests, that there are alot of rewards unclaimed each week (Would like to know why). I think the Idea of @Bowser_LinearFinance to add these rewards to the DAO funds is very good. It should have the same effect as burning those tokens short term. Then we can decide how this money can be applied effectively to improve the stability of the eco system long term.

I would like to see more data points. Is it possible to calculate the rollover from the data at https://github.com/Linear-finance/linear-weekly-rewards/tree/master/rewards ? I can write a script on my own, but I need the alogorithm to calculate the rewards without the rollover. Could do some charts of it.

I’m with Ark here in the long run it will be great for all holders. Short term pain but long term benifits. Reduce Max supply as much as possible or a percentage like 75% of what’s burnable leave the rest for the DAO and burn the weekly’s. All LUSD rewards should go to buy back Lina on the open market and put into DAO treasury or back to the staking.

3 Likes

as much as this sounds reasonable like I have mentioned before 4B of the max supply is for stakers, the rest 6B is already split for makreting team and development considering priority is CHAOS and ATHOS dont exaclty know what is the guarantee that funds gathered from the unclaimed rewards will help Linear development unless it will be clearly stated during voting that they will go for LINEAR development only, roadmap clearly states where priorities lies, rollups are the last on the menu. Lower supply wont take immediate effect on price but will play a role next run. Second thing when you start talking about Lina token after implementing burns you can categorize it as deflationary. Just the loose thought.

3 Likes

another view on matter: Linear protocol development should be main focus and the question why part of hodlers would want to sacrafice unclamied rewards for developement of the product that should have been developed in the first place. Yes we have to wait for starknet to launch first but that doesnt mean some things cannot be improved in the meantime (still dont see dark mode option :face_with_peeking_eye:). If u look at the situation right now devs want to kill not one not two but three birds with one stone, result many Lina users are not happy with users experience as no siginficant changes has been done since the end of q1 unless we count Vault and there are two products on the go that we have only heard off …off which neither is finished and both wont be connected to Lina directly or help in any way to make user expierence better.

2 Likes

I agree with you, the money should not directly flow into development of the protocol. There are other treasuries for that. But maybe we can think of a way to buy lusd to stableize the peg. In my opinion this is one of the biggest concerns for people who may trade on the exchange without being involved in staking. I would not trade with a stable coin which is not stable at all.
This is the kind of stuff I’m thinking of when talking about stableizing the protocol.

5 Likes

I like this idea once peg is fixed we will even gain more while buying off discounted, this could actually could strenghten our treasury so later we could have money for such actions. Like the way u think!!!

image

1 Like

We can think of a model where the same amount or 2x of lina is burned like we buy lUSD, because otherwise this could bring down preasure on the LINA price. No one wants that!

1 Like

Good discussion in here over a complex topic, great to see.

36% of rewards going unclaimed is a large amount of LINA. If we burned it every week the only people taking a financial hit will be the hodlers/stakers (us). The number of people that won’t claim will also rise as it becomes a better deal to just buy LINA on pancake than pay for BSC gas.

We do need to find a solution to the lUSD peg, but I’m not sure cutting rewards for those who have been in the trenches with this coin is the solution. Maybe burning 5-10% of rewards and strictly using it to help lUSD stabilize at 1$. I’m not for burning the full amount of rewards at this time, but will remain open to further dialog.

Thanks guys

3 Likes

Another solution would be to simply lower weekly rewards to slow down inflation rate.
And in other hand redistribute a portion of unclaimed rewards to the DAO reserve for further decisions to make.