Proposal: GoodDollar Staking Lock-up for Savings & Growth

#1

Author: Letecia

Date: December 8, 2024

This proposal introduces a new feature to the GoodDollar staking system: a lock-up period for staked G, ranging from 6 months or 1 year. This incentivizes long-term savings and encourages responsible growth within the GoodDollar ecosystem. The proposal aims to address the current lack of a mechanism to encourage long-term savings in the GoodDollar staking system, where users currently have the option to withdraw staked G$ readily.

Proposed Solution:

Implement a lock-up period for staked G$, giving users the option to lock their funds for 6 months, 9 months, or 1 year. The longer the lock-up period, the greater the potential rewards. This feature would encourage users to consider the long-term growth of the GoodDollar ecosystem and incentivize responsible savings.

Benefits of Lock-up Staking:

  • Increased Savings: By providing a structured savings option, the lock-up feature encourages users to commit to long-term savings goals.
  • Enhanced Ecosystem Stability: Locking up G$ for extended periods contributes to the stability of the GoodDollar ecosystem by reducing the volatility of G$ supply.
  • Increased Network Participation: The potential for higher rewards incentivizes users to actively participate in the GoodDollar network and contribute to its growth.
  • Improved User Engagement: The lock-up feature provides a new way for users to engage with the GoodDollar ecosystem and actively participate in its development.

Implementation Plan:

  • Phase 1: Development and Integration: Develop the necessary code modifications to the GoodDollar staking system to enable lock-up periods. Integrate the lock-up functionality into the user interface, clearly displaying options and associated rewards.
  • Phase 2: Testing and Deployment: Thoroughly test the lock-up feature to ensure its functionality and security. Deploy the feature to the GoodDollar platform after successful testing.
  • Phase 3: User Education and Promotion: Create educational materials explaining the benefits of lock-up staking and the different lock-up periods. Promote the new feature through various channels, including the GoodDollar website, social media, and community forums.

Reward Structure:

The reward structure for lock-up staking should be carefully designed to incentivize longer lock-up periods. Here are some potential options:

  • Tiered Rewards: Higher rewards for longer lock-up periods (e.g., 6 months = 5% APY, 9 months = 7% APY, 1 year = 10% APY).
  • Bonus Rewards: Additional rewards for reaching specific milestones (e.g., a bonus for locking G$ for a full year).
  • Early Withdrawal Penalties: A small penalty for withdrawing G$ before the lock-up period ends to discourage premature withdrawals.

Metrics and Evaluation:

The success of this proposal will be measured by:

  • Growth in locked G: Track the amount of G locked up in the new savings feature.
  • User engagement: Monitor the number of users participating in lock-up staking.
  • User satisfaction: Conduct surveys and gather feedback from users regarding their experience with the lock-up feature.
  • Impact on ecosystem stability: Analyze the impact of the lock-up feature on the overall stability and growth of the GoodDollar ecosystem.

Conclusion:

This proposal presents a valuable addition to the GoodDollar ecosystem, promoting responsible savings and long-term growth. By implementing this lock-up feature, we can incentivize users to contribute to the stability and success of the GoodDollar network.

Appendix:

The appendix will include a detailed budget breakdown, a plan for user education and promotion, and a detailed analysis of the potential impact of the lock-up feature on the GoodDollar ecosystem.

Call to Action:

We encourage the GoodDao to consider this proposal and support the implementation of a lock-up feature for GoodDollar staking. This initiative will strengthen the GoodDollar community, foster long-term engagement, and contribute to the overall success of the GoodDollar project.

4 Likes
#2

This seems like a good addition to the system. Would that be added to GoodDapp or to the Wallet?

Two remarks:

  1. At the moment the staking on GoodDapp is only for the happy few who understand a lot of how crypto works. So if we could make it easier for the end user to work on it that would help a lot. Can it become maybe a simple button at the bottom of the GoodWallet?

  2. At the moment the value of G$ is so low that there is no incentive to save. Let’s say you have claimed G$ everyday for a year. Than you have something like G$ 18.250 in your wallet which is about 1 US dollar currently.
    You could put that in savings mode for another year and than you would have 1 dollar and 10 cent. To put it mildly. With those figures you will not get any substantial amount of people onboard.

In other words. As long as the GoodReserve is not there to support the G$ value this proposal is not adding any value. Don’t get me wrong. I like the idea of the proposal, but the priority should really be to first get the GoodReserve up and running. That is a bottleneck for every other development at the moment.

#3

Thanks, I appreciate your feedback.

Regarding the integration of the lock-up feature, I agree that user-friendliness is paramount. While initially envisioning integration into GoodDapp, I’m open to exploring a simpler implementation as a button within GoodWallet, as suggested. This would significantly improve accessibility for a broader user base, aligning with your goal of making the system more user-friendly.

I understand your concern about the current low value of G$ and its impact on the incentive to save. You’re right; with the current value, the potential returns from lock-up staking, even with a 10% APY, might not be significant enough to attract a substantial number of users. This highlights the critical importance of the GoodReserve, as you mentioned.

Therefore, I propose we consider this lock-up staking feature as a phase 2 initiative, contingent upon the successful launch and stabilization of the GoodReserve. Once the GoodReserve is operational and the value of G$ increases, the lock-up feature will offer a compelling incentive for long-term savings and increased user engagement. This phased approach ensures we prioritize the most critical bottleneck first.

In the meantime, we can begin preliminary design work on the user interface (UI) and user experience (UX) for the lock-up feature. This would allow for a smoother and faster integration once the GoodReserve is in place. We can also start developing the educational materials to prepare for the feature’s launch.

I remain confident that the lock-up staking feature will be a valuable addition to the GoodDollar ecosystem, but its success is intrinsically linked to the success of the GoodReserve. I look forward to collaborating with you on this and other initiatives to strengthen the GoodDollar community and foster its long-term growth.

1 Like
#4

Thank you for your thoughtfull response. I think it’s a good idea to regard this as a phase 2 initiative and to start preparing now already to speed up implementation later on like you suggested.

Hopefully GoodDollar can launch the GoodReserve soon so we can start working on growing it. Growing the GoodReserve is by far the best incentive to get more real users onboard.

That said, I am not really into all the technicalities. But can the staked/locked G$ become part of the GoodReserve somehow? So that the locked up G$ makes the GoodReserve grow?

#5

@senryu Integrating locked G$ into the GoodReserve is a compelling idea that could create a synergistic effect. By using the locked G$ to bolster the GoodReserve, we not only increase the reserve’s size and stability but also provide a more tangible benefit to users who participate in lock-up staking. Their locked G$ directly contributes to the overall health of the ecosystem, creating a stronger incentive for long-term commitment.

This integration would require careful consideration of the mechanics. For example, we need to define how the locked G$ is allocated to the reserve (e.g., a percentage of the locked amount), how it’s accounted for in terms of governance and transparency, and how any potential returns from the reserve are distributed to the lock-up stakers. This would need to be clearly outlined in the revised proposal for Phase 2.

Exploring this integration could significantly enhance the attractiveness of the lock-up staking feature and strengthen the connection between user participation and ecosystem growth. I’d propose we dedicate a section of the Phase 2 proposal to detailing this integration, including a risk assessment and a clear explanation of the benefits and potential challenges. This will allow for a thorough discussion and ensure a robust and beneficial implementation.

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#6

@letecia Yes it would be great if someone of the programming team can respond about the technical feasibility of this. Can this be programmed in the wallet and or the contracts? Maybe it gets too complicated?

Next, if it seems possible to implement it would be good to get an estimate of how much work this would be and much this would cost. With such an estimate we will be able to decide wether this is a good investment of time and money now.

1 Like