Participatory Staking: Revolutionizing Governance in the Blockchain Ecosystem

At Vabble, we are always seeking innovative solutions that push the boundaries of blockchain technology. This year, we introduced a new concept of participatory staking that incentivizes governance and rewards within a DAO ecosystem.

Traditionally, staking models serve as a tool to support network operation. Yet, staking in most projects often ends up as a ‘lazy workload’, where users stake their assets to earn rewards without contributing to the functionality of the network. In contrast, the concept of participatory staking takes the common staking model and evolves it into a highly dependable function of the DAO, so much so, the DAO does not work unless users who are staking participate in decision-making.

The reason for such a hybrid model is to mitigate the laziness traditionally seen in staking functions which usually becomes an extractive process and does NOT support a network. The idea of staking in its truest form is to support a network. In a lot of project cases, such as Ethereum, staking is necessary for the chain to continue operation; however if a project does not need to support a blockchain, then the staking function is meaningless and users only stake to receive a reward for locking an asset. This could be viewed as a function of price manipulation. If the staking function of a project is NOT supporting a network or other function, then we can assume the staking function is there to apply constraints on the staked assets underlying price.

Let’s look at traditional staking models (Not used to support networks):

1. User purchases Token or NFT.

2. User stakes for X period.

3. User receives rewards during the period.

4. User unstakes.

5. User does not receive any further rewards.

In between step 2 and 4 of the above list, it is possible a project may also include such staking privileges as:

1. Access to a private group

2. Access to further initiatives

3. etc

However, ultimately, the staking function in this example is a simple method to reduce the supply of X asset, and through marketing, demand increases resulting in the price of the underlying asset increases.

Vab DAO does not need the staking function to support a chain. However, we do need the staking function to support the full operation of the DAO’s governance, meaning users make decisions on proposals and changes. We do not support the idea of staking for the sake of offering 1000%+ APY’s.

Our staking function is participatory, meaning if a user stakes then a user MUST perform a governmental action in order to receive their reward on their staked asset. These actions include:

1. Voting on proposals

2. Creating proposals.

In creating a staking function that requires the participation of a user in order to receive a reward, we potentially mitigate various bad actors. And more importantly, users are staking to ensure the DAO is operational and that stakers are doing their “job” by participating as part of the governmental body of the DAO because essentially, a staker owns the DAO and is a committee member of the government of the DAO.

If that user decides to stake and does not participate, then the user (committee member) is a useless actor and should not receive a reward.

Also, an important point is that the weight of a stake does not affect the weight of vote. In order to create a fair model where whales (large token holders) don’t control the voting power of the government, voting is 1:1 per user. However, a user’s volume of stake does affect the rewards a user receives. This is a trade-off where the weight a users stake does not affect decision-making to keep the DAO pure but it does affect the rewards a user receives.

The reward function of the DAO is based on a pool. The more a user stakes, the more of that pool they own. We have created systems in the UI that will allow a user to see what percentage of the pool they own, what the median pool ownership is, and thus what rewards they will receive during their staking period.

It is only fair the more a user stakes the more rewards they will receive. Larger holders receive rewards accordingly and smaller holders have the tools and resources to increase their positions and become a larger holder by working and compounding.

We believe participatory staking will evolve from this initial notion and become a standard throughout the blockchain ecosystem where staking hasn’t or will not support a network but can reproduce situations, like with networks, where staking is supporting other fundamental operations, or at a minimum, incentivizing the participation in fundamental operations to expand the ecosystem.

Join us in this exciting journey as we revolutionize staking and make our mark in the blockchain ecosystem. https://www.vabble.com/