$IDLE staking: fee-sharing for long-term holders
The waiting has come to an end, staking just got real!
The Idle Leagues worked around the clock to add more innovative token use cases, and today we are happy to unveil $IDLE staking.
IDLE is now a governance token with a value accrual mechanism. Users that lock $IDLE for a flexible period (up to 4 years) will get access to a fee-sharing stream.
Governance voted to distribute 50% of the protocol’s revenue streams to stakers in the form of $IDLE, increasing protocol ownership and Governance involvement of $stkIDLE holders.
All you need to know about $IDLE staking
During the last months, the community agreed upon implementing the Curve model with different threads in the governance forum. This model adds valuable utility to the $IDLE token, aligning stalkers’ returns with protocol growth, and designing a new module that goes hands-in-hands with the liquidity mining program.
Indeed, LPs can maximize their long-term commitment to Idle protocol and get additional rewards by depositing $IDLE accrued via LM.
What’s the difference between $IDLE staking and LP staking? LP staking enables liquidity providers to deposit $IDLE and $ETH in the SushiSwap pool and receive $IDLE rewards. The Governance voted for an incentivization program to foster liquidity provision and allocated 180k $IDLE over a 6-month period. The program is based on the Ampleforth geyser model and the multiplier is time-weighted.
While LP stakers are subject to impermanent loss, that risk does not affect $IDLE stakers. With this new initiative, users can join the fee-sharing by depositing $IDLE in a staking contract.
How long can holders stake $IDLE? Users can decide the locking period when staking $IDLE. The UI offers 4 options: 1 week, 1 month, 1 year, and 4 years.
It’s always possible to increase the locking period, even with the tokens already locked, while it’s not possible to cancel or reduce the lock once broadcasted on-chain.
How does the multiplier work? Stakers deposit $IDLE and receive $stkIDLE in proportion to the locking time and staked amount.
Users would achieve the maximum multiplier (where 1 $IDLE = 1 $stkIDLE) with a 4-year locking period. Lower locking timeframes would translate into a reduced $stkIDLE amount: e.g. 1 $IDLE would be worth 0.5 $stkIDLE with a 2-year lock, and 0.25 $stkIDLE with 1-year lock.
$stkIDLE owners receive a proportional share of the fees accrued by the protocol.
Do I have voting rights and can I vote for on-chain IIPs? The $IDLE staking contracts do not allow you to directly vote on-chain. To enable the voting feature, the current option would be to have a community multisig that receives the $IDLE voting power delegation for the staked assets.
Stakers can signal their preference on IIP proposals through a snapshot vote, and the multisig will then broadcast on-chain their decision.
The off-chain individual voting power will be proportional to the owned stkIDLE, and the multisig will report the using the full voting weight of the staked $IDLE.
What’s next for $IDLE staking
We want to go even further! We already have $IDLE staking V2 in the pipeline. Beyond $IDLE Stakers receiving a share of the protocol fees, the Idle Leagues are working on the following options for V2 staking:
- Staking a certain amount of $IDLE in order to boost voting power on the on-chain proposal and off-chain polls
- An option to stake $IDLE to boost the liquidity mining distribution of idleToken pools via voting and get boosted $IDLE rewards
This article represents initiatives decided by Idle Governance and executed by Idle Leagues.