HOPR Staking Evolution
Season 3 of the HOPR Staking Program will launch soon, and it will bring some major improvements: new baseline parameters, more NFTs, and a fairer distribution that makes sure active participants get more rewards than passive stakers and whales.
In the run-up to Season 3, we ran a thorough audit of the staking program and NFTs, and while we’re delighted with the concept and participation incentives, it’s clear that the distribution profile doesn’t currently match HOPR’s values. We hoped that the NFT Boost system would close the gap between smaller and larger stakers, but a handful of accounts still dominate.
In fact, the rewards paid to the top 10 accounts by stake (out of over 800) accounted for over 40% of the rewards. Several of these accounts have no NFTs and have not actively participated in our testnets or other initiatives. Some have NFTs, but only acquired on the secondary market — something we’re happy to see in principle, but not if it means someone getting tens of thousands of HOPR tokens more than the person who earned the NFT in the first place.
Obviously people who hold lots of HOPR tokens are signaling a strong belief in HOPR that we deeply appreciate. We don’t want to penalize investment, but we do want to shift the balance to something more community focused.
So what’s changing?
For Season 3, we’ll be adjusting the program in the following ways:
- Reducing the base APR from 18.25% to 10%
- Reducing the NFT boost cap from 1m to 150,000
- Eliminating HODLr type NFT
- Quickly introducing many new NFTs to allow people to rebalance their APRs
This will, very temporarily, reduce everyone’s APR. But don’t panic! To compensate for this, within the first week of the program there will be THREE ways to earn new NFTs which can make up the difference. There will also be a more regular flow of smaller boost NFTs going forward.
Once these balancing measures are complete. The staking distribution should be restructured to match our goals: active community members will receive more, while passive whale accounts will receive proportionately less, while still being amply rewarded for their investment.
Example Changes
Let’s take a look at how things would change under the new system for some typical account profiles.
As you can see, after the correction, the larger accounts see a significant drop (but still get a healthy APR), while the regular user actually ends up earning more.
NFT Initiative
So what will the first Season 3 NFTs be? We’re still deciding on the names and images, but we can share the mechanics already:
NFT 1: Restaking Reward
The most important NFT will be the first. This will be awarded to everyone who restakes from Season 2 to Season 3. There will be higher ranks available for people who stake more in Season 3 than Season 2 (simply staking your claimed rewards will count).
An important feature is this penalizes multiaccounting. Large account holders are welcome to split their stake to optimize the boost cap, but these new accounts will not be eligible for this NFT. (In general, multiaccounting is fine, but each account needs its own set of NFTs. And we prohibit multiaccounting in all NFT earning activities except testnets, where more nodes means more data.)
UPDATE: The Restaker NFTs have now been minted and sent out. To prevent gaming, only accounts staking more than 250 HOPR tokens at the time this article was published were eligible.
NFT 2: DAO mini-experiment
As part of our DAO analytics, it’s become clear that awareness and understanding of quadratic voting is low in the community. We’ll be running a small gaming / educational session on Snapshot to give a hands-on example of the power and quirks of quadratic governance. Everyone who participates will get an NFT, and there will also be HOPR token prizes as well.
NFT 3: AMA
Finally, because this is a lot to take in, we’ll be holding an AMA session with our founder Sebastian. To answer any questions about the staking changes and HOPR in general. Participants in the AMA will receive NFTs.
Together, these three NFTs will provide a way to quickly take your APR back to Season 2 levels, in addition to providing a fairer rewards distribution.
Into the Future
Ultimately, the goal is to transition the staking program to something closer to typical crypto rewards programs, and indeed HOPR’s own planned cover traffic reward mechanism: a fixed budget of rewards distributed proportionately amongst stakers. That’s still a way off, but we plan to transition there over the next few iterations of the program.
Going forward, with each new season of staking, the oldest NFTs will stop earning rewards. So this time the HODLr NFTs are being eliminated. Next time all NFTs from Season 1 will be removed. NFTs from Season 2 and Season 3 will still be valid. The rationale is the same as elsewhere: rewarding active, ongoing participation in HOPR initiatives. Active community members will always be able to keep their APR high, but it seems reasonable that people shouldn’t keep being rewarded with no limit for activities performed almost a year ago.
We’re excited for this new evolution of the staking program, which we feel will better capture HOPR’s community-oriented values. Stay tuned over the next few days for more details, and feel free to share any questions or feedback in Telegram.
Rik Krieger
HOPR Co-Founder
Website: https://www.hoprnet.org
Twitter: https://twitter.com/hoprnet
Telegram: https://t.me/hoprnet
Discord: https://discord.gg/dEAWC4G
LinkedIn: https://www.linkedin.com/company/hoprnet
Forum: https://forum.hoprnet.org
