Current staked amount is OK but could be better

Currently there is more than 13M$ worth (106,753,000 PNK according to klerosboard ) of PNK staked. This looks good in absolute numbers and relative to liquidity (even with an infinite amount of capital, an attacker wouldn’t find enough PNK for sale on exchanges to buy this much) but in term of % of the supply it’s not that high (~14% of the supply is staked).

Extra incentives for staking

Jurors are already rewarded for their work with arbitration fees when they get drawn in a dispute. However simply staking in courts with a low amount of disputes per staked PNK (like the general court) doesn’t provide a high amount of financial rewards while those stakers are still securing the system. We’ve seen with the recent trend of yield farming that providing tokens to stakers works in increasing the value staked (see Uniswap and SushiSwap as the most prominent examples).

Proposal

We propose to set up a juror incentive program which will reward staked jurors in proportion of their stake. For the year of 2021, jurors will receive a total of 1 000 000 PNK each month in proportion of the time and amount staked in this month.

In addition, any address which staked PNK before 01/12/2020 will receive a retroactive distribution of 1000 PNK.

Details:

• The proposal is retroactive.
• The tokens will be distributed using a Merkle Drop contract.
• The distribution will start as soon as technically possible.
• There may be a seasonality of the distribution (like once per week/month).
• The computation of rewards may use snapshots as long as those are taken at least once per day (i.e. if tracking every stake/unstake events is not easy, it is possible to look at snapshots of staked balances and use those to determine how to split the rewards for that period of time).

Rationale

The goal of this proposal is to incentivize PNK holders to stake their PNK. At current values staked it would correspond to a 11% APY (labelled in PNK) for PNK staking. We expect this to drop (to a 1 digit value) as it would create extra incentives for staking and the total amount of PNK staked would increase diluting the rewards. It would also improve the user experience of jurors staking small amount and not being drawn, often removing the negative feeling of “staking for nothing”.

The 1000 PNK for every address which staked before December would give a small boost in the chances of being drawn for jurors with low stakes but who still demonstrated their interest participating. The amount stays modest to avoid incentivizing the creation of multiple addresses for the purpose of retroactive airdrops (i.e. expecting other projects to conduct similar airdrops and creating addresses for this purpose). The date is set before December as at this time no one had the knowledge that such proposal would be made.