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Mark Carey 🎩🫂
@markcarey
The Staking Safety Valve is a new feature of /streme V2. WHY? Staking rewards are great. Streaming staking rewards are even better. That said, it's important to recognize that staking rewards are a form of token emissions: tokens that are earned, but not "bought". In V1, some /streme coins enjoyed significant trading volume while others had very little trading volume. This will also be true in V2. For low liquidity tokens, the staking rewards can grow over time to significantly outnumber the amount of "bought tokens". It's normal for stakers to want to sell some of their tokens. When they do, however, it can sometimes result in the removal of all the ETH in the liquidity pool (because very few tokens were "bought"). Later, others try to sell and they cannot. HOW? The Staking Safety Valve aims to mitigate the issue described above by limiting the staking rewards stream until liquidity is built up through actual buying of the token. All stakers will still receive a proportional share of the rewards starting immediately after they stake. But the firehose flow of staking rewards is initially reduced to a garden hose flow. Once the liquidity has built up, the Valve can be opened and the firehose flow will then boost the reward stream to all stakers. Note: the Staking Safety Valve won't be able to prevent every case of liquidity drying up for a token. But we hope it will greatly reduce cases like the scenario described above. We'll likely have to refine the mechanics over time to find the right balance. Feedback is always appreciated.
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