RR2 - Phase 3 (Staking) [EDITED]

This is Phase 3 of RR2, see Phase 1 and 2 for previous proposals related to RR2.

In the first post outlining RR2, we proposed that it be possible to stake $RARI tokens in the protocol for different lengths of time in order to receive “activated” RARI, which gives you governance rights as well as RARI rewards if you participate in governance.

Over the last couple months, we’ve made progress of these concepts and would like to share some updates with the community. Below are some notes on where we are today, feel free to comment below on your preferences.

  1. We propose that the minimum staking period be two months, and the maximum staking period be 2 years.

  2. We propose that the amount of activated RARI given to stakers scale exponentially with the staking period. Ie, the longer your staking period, the more voting power you receive relative to the amount of tokens locked.

    Below is a visualization of voting power / RARI rewards received for three similar models, we would love to know which one the community thinks we should start with: https://docs.google.com/spreadsheets/d/1JxVfCzDHsF3rnN4mYGaOc2cVdlSV32_j_zO87olix8c/edit?usp=sharing

Some Simplified Example

  • The examples below assume Model 3 on this sheet
  • This model also assumes a total of 723,000 RARI staked (representing 20% of circulating supply), staked for 12 months (total aRARI ~ 451,000)
  • This model assumes 10K RARI per week distributed to governance participants (and assumes 4 weeks per month)
  • This model also assumes that all RARI stakers participate in governance
  • The model assumes that the activated RARI balances stay constant over time (in reality, they will be decreasing over time since aRARI tokens convert back to RARI)


  • Locks 1000 tokens for 2 months since she has a short time horizon
  • She receives 503.47 aRARI
  • In the first month, she will receive (503.47/451,000)*40,000 RARI = ~45 RARI, representing an 4.5% return


  • Mark locks 1000 tokens for 24 months
  • He receives 1000 aRARI
  • In the first month, he receives (1000/451,000)*40,000 RARI = ~89 RARI, representing an 8.9% return

These are super simplified examples, but they are just meant to demonstrate at a high level the longer staking incentives, and the opportunity to earn governance rewards on your RARI. We look forward to hearing your thoughts!


let’s put this to snapshot

Awesome work! This has my support 100% I like the Model 2 governance curve

that sounds great, we also expect incentives for NFT trades with $RARI.

It seems that model 3 is best suited to incentivize longer term stakes since the curve is not as steep as model 1 or 2 over the same period of time. As a result, to get the maximum return, or return potentially worthwhile to the staker, this one would promote longer term stakes if that’s preferable.

I’m assuming that the voting power from staked RARI is unavailable until the stake ends. This would be better if it’s preferable to further incentivize longer stakes and therefore longer required activity in the process before exiting. That said, simply staking RARI does not guarantee positive participation or any specifically desired behavior other than the locking up of tokens to earn voting power.

Though, it would be interesting if a staker who could not receive their voting power or initial stake until after a stake ended received a weighted claim token based on the size and duration of their stake. I have no immediate practical idea of what this would be used for, but I like the idea of “play with your stake” to facilitate a way of doing something other than voting that could still be meaningful. Maybe voting at a reduced percentage compared to the actual voting power received from a completed stake as a practical use case. However, perhaps more fun ideas would be around gambling, buying, or selling this weighted claim token, thus creating a secondary market for active stakes and a variety of ways to acquire them. Though there would need to be a better way because this would likely lead to only all or nothing acquiring events :thinking:. Just a random thought that I probably put too much time into.

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In terms of these models, the example you provided shows 4.5% monthly return or around 50% per annum for 2 month lock-in. That’s a bit much for governance participation in my opinion.

Model 1, using your scenario, would provide about 8% APY for 2 month lock-in and about 65% APY for 6 month lock-in. These numbers are much more reasonable. You could also consider a curve between model 1 and model 2 - something around 15% APY for 2-month lock-in.

An easy mental model for this is that staking should, at the very least, keep up with the inflation of the token so that stakers maintain their ownership share of the protocol.

Those who want to stake will need to make sure that they will be able to generate some profits, despite the inflation of the token. Thus, either the inflation should be reduced or staking should be implemented in a way that would be fair for both governance participants and artists.

I have created my complete betting model, so I have questions about this model. How do I calculate my reward if I start cooking a steak on the third day of the week? How to reward participants to keep their tokens in pools (for example Uniswap RARI / ETH)?

Let’s take another look at my betting model https://docs.google.com/document/d/1W6PpRnALfMZi3m2dAhvfCt7uEJTODs3vo5YWGDJ7p-Y/edit. Calculates the reward taking into account the time and amount of the block. Therefore, I would like to add additional criteria for the staking amount so that only active participants remain.

Approximate criteria:

  • blocks not less than 100
  • Has a status on the platform not lower than a community member
  • Votes at least once a month for the community’s proposal.
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I have a new concern about going with model 3 - it looks like we can extremely incentivize 2 months staking continuously re-staked.
I start to lean towards Model 2

This is an update on staking.

  • A minimum 2 month staking period and a default maximum staking period of 2 years will be given as options to users. Users will be able to stake for longer in advanced settings.
  • Model 1,2,3 are still being considered, and after some internal debates, we are leaning towards Model 2 (discussed below).

In addition to the relationship between the locked tokens and the amount of voting power, there is another aspect to all of this which we did not get into, namely, the token locking and unlocking mechanism. Below are three examples which demonstrate the possibilities. Option 1 shows tokens which are locked for the entire staking period, and unlocked at once. Option 2 shows tokens that are locked, and vested linearly. Option 3 are tokens which are locked for a period, then linearly unlocked:

What complicates this decision even further is the fact that Rarible may want to issue different kinds of vesting tokens to different entities (for example: investors might have a linear vesting contract similar to Option 2 above). In order to consolidate these different options, a flexible staking contract was created, which allows parameters to be set to create any of the options above. In this vesting contract, you can set a Cliff period, and a Vesting period of different lengths. By default for stakers, vesting will have a period of 0 duration (ie, Option 1).

Below are some examples of what the amount of voting power looks like for Option 1. The diagram below shows voting power for a 2 year lockup:

In contrast, below is a diagram for a 1 year lockup. Notice how the voting power is lower, due to the exponential relationship between token locking period and voting power:

The same mechanism applies for vesting tokens. As you add vesting duration to the chart above for example, voting power increases for longer vesting periods (see the following two graphs):

For those interested in playing around with the model, see this sheet which you can paste into your own workbook: https://docs.google.com/spreadsheets/d/1JxVfCzDHsF3rnN4mYGaOc2cVdlSV32_j_zO87olix8c/edit#gid=1200684553

We will be proposing in Snapshot to move forward with Model 2, along with the staking equations outlined in the google sheet (written out below):

cliff multiplier = (0.2 + 0.8 * (months_cliff / 24) ^ 2)

vesting multiplier = (0.2 + 0.8 * (months_vesting / 24) ^ 2)

your voting power = your_locked_token * (cliff_multiplier + 0.5 * vesting_multiplier)