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RE: Unstake SPS Early with Penalty

in #spsproposal6 months ago

Staking does not equal locking necessarily, I firmly believe that is a false equivalency. For example I was informed Cardano is apparently not locked for staking, and there are various DeFi protocols out there that offer early unstake.

I agree locking does help with short term scarcity and the price stability of a token, but it does not help with the long term scarcity of the token, nor the innate value of a token.

You seem to mention price and scarcity a lot, but it is all within the context of the short term. If someone wants to sell, they will sell. Would you rather someone sell 100% of their holdings over 4 weeks or 95% right now, burning 5% in the process? I would think any rational long term holder would prefer to see a 5% burn, since short term price is completely irrelevant to a long term holder. Short term scarcity or false scarcity does not help with long term price of a token since it can always be dumped at a future date, only burned tokens is out of circulation forever.

You also mention the "disastrous repercussion on our global economy and on the future of the flywheel itself", but the price of SPS is completely unrelated to the "flywheel", that is purely dependent on the price of DEC.

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While I get you are trying to justify a 5% sink as a good thing over a long period of time but the reality is that the game itself should the be one creating those sink to help reduce daily that SPS and DEC supply. We should not have to implement such a thing to justify it being a 5% sink.

Secondly, Yes I would rather bots selling 100% over 4 weeks and keeping the price of SPS stable VS allowing them to dump on us daily with a 5% sink where they can just stake for a few days at 10%+ APY in order to counter that sink and simply bypass any fees while tanking the price of SPS.

I also don't understand where you tell me that I'm looking at this from a short term perspective when clearly, this entire proposal is a short term pump and dump tool getting in place right in time for the next bull run to make sure everyone can dump at the highest instead of keeping that 4 weeks component as a tool to avoid that downward pressure and making sure that staking stay an important commitment to the game in the long term as I do see.

My point here is that what will make SPS keep is value is that mix of if you decide to stake it in order to gain APY% and in order to have as much as you can staked SPS to gain more reward from playing the game.

It should remain a commitment so that when you decide to unstake, there is a both a lost of value coming from unstaking in terms of rewards and APY% but also a lost in time that avoid people chasing green candles and just doing daily trade.

I would agree to such madness only with at least a 20% fee on early unstaking to avoid any traders to use such a tool to do day trading.

As for the 4 weeks themself, considering how many time the SPL team did push back on delivering, if we were to have such a thing in place, we would have a 0.0001SPS right now form all the panic selling from the weak hands out there that would have took that 5% lost just to sell away from the game while them being force to sell over 4 weeks mean they can also take that time to reflect on the new reality of what is changing and potentially have them change their mind half way (yeah life is like that, some people are emotional and act on FUD or on frustration and such a tool in place make sure these people get some time to cool off and it does protect the price of the token.

I'm still voting No to this as I don't see 5% as big enough to justify such a pump and dump mechanism that can and will be used for margin trading and market manipulation which will have repercussion on the overall short, medium and long term market then the 5% burn it provide.

The SPL team should be the one creating more sink, not us via the DOA creating potential long term impact on the value of SPS when we could simply wait for the team to finally deliver everything they have left on the to do list that will organically fix this non issue you are trying to solve by creating other issues.

Don't get me wrong, I got nothing again trying to find good ideas and trying to improve the DAO and find ways to create value for SPS but IMO this one break the fundamental of a system that is in place to protect SPS value overtime.