I have been thinking about this a bit and would like to make a proposal that should not need additional rewards although not sure how complex this would be contract-wise.
The idea is to have two staking contracts, unlocked and locked. In the unlocked contract you would receive 50% of the the rewards and store the other 50% to distribute to the locked stakers the following epoch. I would set the locked contract to around 90 epochs (1 month ~) but it's up to the community to decide on that.
An example is worth more than the description above with a 0.6% rewards per epoch:
Epoch N:
Unlocked contract with 1000 OHM:
- Receives 6 OHM from the distributor
- Distributes 3 OHM among the stakers
- Stores 3 OHM for the locked stakers
Locked contract with 1000 OHM:
- Receives 6 OHM from the distributor
- Distributes 6 OHM among the stakers
Epoch N+1:
Unlocked contract with 1003 OHM:
- Receives 6.1 OHM from the distributor
- Distributes 3.05 OHM among the stakers
- Stores 3.05 OHM for the locked stakers
Locked contract with 1006 OHM:
- Receives 6.3 OHM from the distributor
- Distributes 9.3 OHM among the stakers (6.3 from the distributor, 3 from the previous unlocked epoch)
APY Effects
Base APY with 0.6% rebases is 69.950%.
APY Effects based on 0.6% rebases with (50% unlocked, 50% locked) with 50% penalty:
- Unlocked APY: 2.658% APY
- Locked APY: 1.823.169% APY
APY Effects based on 0.6% rebases with (20% unlocked, 80% locked) with 50% penalty:
- Unlocked APY: 2.658% APY
- Locked APY: 134.380% APY
APY Effects based on 0.6% rebases with (20% unlocked, 80% locked) with 20% penalty:
- Unlocked APY: 18.900% APY
- Locked APY: 90.800% APY
The 50% "penalty" should be a parameter that the community can decide and tweaked along the way. As OHM is auto-compounding the difference in the APY is huge but I would expect people to go for the locked contract if they want to stay for the long game.
Benefits:
- Does not increase the amount of OHM to distribute.
- The additional rewards for the locked stakers comes from the unlocked stakers.
- Incentivizes locking of OHM during the expansion phase.