Create a single side KAR staking pool

Karura Proposal
#1

Hello All.

TL;DR

  • Create a staking tab which would allow to stake single side KAR
    -Allocate 4,000,0000 KAR out of the rewards reserve for staking reward for a period of 6 months,

Before All, I would like to mention that I have been part of the project’s community from the Mandala festival, and I’m a big believer in the approach and the vision of the team going forward.
One of the main things I’m supporting is the democracy and governance system (some is already in place, some is expected to).

With that said, like in any functional democracy- criticism can and should be made, this is not in order to create FUD, but rather to put things out on the table and to try to find solutions in order to keep the community core happy and drivin moving forward.

Due to the fact the following numbers are slightly concering-

  • DEX TVL on Ausust 20th was 32.5M$ Pre LKSM and BNC pools. This is still the TVL of the DEX, even a bit lower.
  • PHA was suggested to be added 74 days ago, we have not recieved any technical update from either teams.
  • SDN was suggested to be added 48 days ago, same as above.
  • New KAR wallets created per day is on a massive decrease.
  • Over the course of the last 3 months, BTC, ETH, KSM, DOT have been on a bullish run whilst KAR token is on a negative trend and does not show signs of growth but rather is under a lot of selling pressure.
  • KAR use cases are rare to non existent. Kar is not a must have token for the DEX (due to bring-your-own-gas), Governance voting is rare and mostly technical, and LP’ing is only optional with 2 pools-
    KSM/KAR- most crowdloan participents are already exposed to KSM price movement with their original contribution.
    KAR/KUSD- Low risk/ reward pool.

Bette mentioned the other day that we might re-visit the original tokenomics and explore an option of changing from a Fixed supply to Inflating economy (which would be blessed imho, at least for the first few years).

My suggestion is the following-

  • Allocate 4% out of the 10.25% rewards reserved to KAR single side staking purpose, i.e - 4,000,000 KAR.

  • Create a staking dashboard which would start with a starting APR of 50%, that can be decreased down to 30% as the number of KAR in staking grows.
    (APR’s were calculated in accordance to KAR tokenomics, release/vesting Schedules, and taken in to account tokens in CEX’s).

  • have the pool run for a period of 6 months or until the allocated amount of tokens are distributed (they should be approximetly in the same time).

  • Optional- Allow only Karura’s crowdloan participents to take part (this has its pros and cons, would love to hear opinions on it).

Why should we vote yet to this?

  • Rewarding loyal hodlers of KAR and keeping the token holders happy even if KAR is losing value.
  • Allowing more time to mature technically and introduce new innovations.
  • decrease selling pressure and create a strong usage for KAR.
  • Allowing time for the team to consider the original fixed supply tokenomics and write a possible suggestion to change it.
2 Likes
#2

Can’t agree more.
KAR lack utility at current stage. Single side staking pool would contribute to the token lock and holder reward.
A fixed allocation is one option, another one is to allocate a certain percentage of karura’s revene (from dex/lksm/kusd modules) to the pool, which will bring rewards continiously. However the first option seems more suitable at the moment as the karura’s revenue is too low due to the low activity currently. I believe with more assets flood in in the future, the second option will work.

#3

short term incentives wont help. imo they will increase selling pressure after that short term time frame.

if you are bullish you just buy more at the current low prices.

the polkadot/kusama ecosystem are literally just starting to evolve.

aca and kar also depend on more projects being onboarded (for example a btc bridge).
if you arent aware of that you might have not done your research.

it makes more sense to put out meaningful incentives once the projects have evolved more and can attract more users for other good reasons.

also the “bring your own gas” feature still uses Kar for gas but just converts your token to kar automatically (kar is being purchased on the dex).

changing the tokenomics because of slow early price movement is a no go for me and will scare other investors away.

2 Likes
#4

With great respect to both you and all fellow community members.

I understand your perspective but I disagree with the fundamental motivation behind it, it’s execution and it’s long term value add to the platform as a whole.

Q: Should we change tokenomics to inflationary so people can get staking APY on their excess coins / should we just give coins away via a single sided staking pool.
( I see both of these as the exact same thing )

My perspective:

  • Fundamentally, if something has value, you don’t give it away for free. Giving coins away for free DOES lower the value of the total supply of coins.

  • I hear the argument in the discord, that “Kar needs a use case” then they go on to say how we should turn on staking even though this via:

(I) Changing the Tokenomics to bring in some staking/APY/inflation , this would have NO security features, as we get all our security from KSM. Therefore making it useless and just a way to get a couple of extra coins. So adding staking wouldn’t NOT add a use case.

(ii) single sided staking, this is literally just taking money from your right pocket, putting it into your left, then saying you’ve make a profit. With the added disadvantage that we could use those KAR coins for something useful which could add value to users, e.g. LP’s rewards, some sort of game to bring brand awareness, lower TXs fees / remove them. There are many ways we could spend the coins that would bring real value to the project.

^Remember it’s the Token holders that own the treasury funds, meaning we all already collectively own the money in the treasury.

  • Kar’s use case is the EXACT same as RobbinHood’s stocks use case, you GAIN OWNERSHIP. You control the network and treasury funds << THIS is where our value is, even if people don’t have the interest to vote. RH stock does not and probably will not ever pay a dividend.

  • Lastly, and I think what most of us are here for. Making $$$.

If you’re in Aca/Kar for the long term ( 2 years + ) then you would hate the idea of increasing total supply of coin it will destroy the exit price we all want to get out at. why ?

Why does BTC have value ? Because it has a capped supply.

Why do most of the DeFi Farm coins trade high on issuance then fall like stones in water? Because they have no capped supply and crazy inflation.

E.g. I buy 10 Cake @ 20 USD stake them @100% APY.
1 year later, sure I have 20 CAKE but the price is now 8 USD as there are literally 75+% more coins on the market ( as literally everyone stakes their coins )

Remember: if you’re making 20% APY a year staking, BUT the inflation rate is 19% a year then you are ONLY making 1%, it doesn’t matter if you have 20% more coins, your ‘real interest’ is only 1%.

While I understand there are many users that quite frankly don’t care about the math of the situation and just want to slowly see more coins in their wallet ( I’ve been there it is cool )

But if you’re on the side of looking for a “major liquidity event” out of this project i.e. you wanna get rich baby :wink:

Then we should avoiding staking or wasting coins in the short term and focus on long term Value, User Experience, integration with other projects, more pools, more products for users. This route is more painful, slower, and involves patience on the side of the investor.

KAR being a get rich quick project IMO is just a poor way to progress on this journey to becoming a DeFi HUB / Crypto-Bank

With great respect for all members of the community,

Kind regards,

TheOyster

:watermelon:

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