So I wanted to make a post here to make the discussion in the Discord channel about the unstaking period more visible.
There were some suggestions in the protocol discussion channel on Discord that cancelling the 7 round unstaking period for Lpt could get participation rate higher since the tokens would be practically liquid when staked and participants would be able to react to market movements almost instantly. This could solve every issue regarding participation and inflation and I personally believe it would do that instantly. In even a single round after this has changed, Livepeer participation rate could be over 50% and very possibly much higher even.
There is one important issue that was mentioned though: Since there is no explicit slashing mechanism for bad outputs through Livepeer, that 7-round unstaking period was meant to discourage bad output indirectly because after a bad output, price would drop and the O that put out the bad output would also incur losses by the time their stake was out. Now this, is a big one, makes a lot of sense and I don’t have any counter arguments to this.
Thanks for addressing this topic. My concern is that this type of protocol pivot would allow for massive volatility on the chart. With the current market conditions, I’m not interested in having more volatility on the charts. But that’s just my two cents.
Agreed, each pump will be extinguished immediately, also inflation and rewards will drop significantly and there wont be any premium for staking the tokens. I like the current 7 day lock period. It makes sure that ownership goes to the longterm supporters rather than pure speculators.
Also playing with all parameters at once is not a wise idea. You can never predict how market will react to that, inertia is quite big here.
Well, it still looks like something must be done though. Inflation -unnecessary inflation- is not gonna solve itself. Right now, network is paying too much to everyone involved and the way it’s going, Lpt will keep making lower highs as weeks and months pass. Participation rate is normally supposed to increase 0.1% every 2 days with the amount that tokens are being emitted but as you see it’s not doing that because that excessive inflation is being sold everyday. This tokenomics mechanism may be good in theory but it’s not working with this amount of revenue. You could say, “participants are recieving that inflation so they are better off overall.” Yeah I don’t know. It feels like this is going in a way that says “We’ll continue this as long as it does, make the best of it and go our own way after it’s all over.” because this may not be sustainable in this form. Right now, it’s like participants are abusing degens but one day they might just stop buying and all participants would incur higher losses because of that.
Everyone is making too much money off Lpt, right now. Money that they don’t deserve because actual revenue is nowhere near to justify that. Please fix this (as good as it could be done because we all know the ultimate fix is to increase the revenue).