Treasury lpt is not staked!

Look I know you may say “why didn’t you say anything back when this was being put in place” and so on but I didn’t have this much stake back then, I didn’t know better, I didn’t have to care this much

I am shocked to find out treasury lpt is not staked? I don’t need to count all the reasons to you why this is bad but groups have been trying to increase participation rate and I wrote this on Discord too that Telegram groups, Youtube videos, rewards are unlocked to encourage groups, all those we write on official telegram channel everyday… And our own treasury is not staked?? And it’s being crushed by inflation.

This means that if no extra token is staked on a given day, participation rate decreases just because of the lpt that was taken out of staking and put into treasury, which is not staked.

This must change immediately, if you ask me.
What’s it gonna take for someone to take on the job? How does it work? I know literally everyone in the core team is on Studio, busy with the new client right now

That’s not correct. Only 10% (the treasury percentage) of the minted tokens are not staked, 90% gets staked.
Simple example: 1000 staked, 1500 unstaked = 40% participation rate. 100 tokens get minted, 10% of those go to the treasury. Now you have 1090 staked and 1510 unstaked = 42% participation rate.
The participation rate definitely still increases even if the treasury is not staked :wink:
And if you stake it to get additional LPT, you could simply just increase the treasury percentage for the same effect (since additional stake reduces the amount of LPT the other stakers get). So IMO it’s not that big of an issue and not worth the additional effort/bureaucracy for staking it.

It basically only affects the participation rate (but only to a small degree), and for that the easier fix (I think) would be to adjust the calculations so that they ignore the LPT in the treasury contract.

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Yep, that calculation is right on and you’re right.
I think treasury is forgoing 700 lpt every day as of now (omg). Can you imagine how earlier it would have been filled up even with this high ceiling if it was staked? And all participants would have been better off because they would have had many more lpts and Os would have had many more lpts and more freedom to make their prices even cheaper…

Inefficiency and waste. Treasury not being staked is both of them. Please let’s turn staking on for the treasury (I know it’s not easy like flipping a switch now, but I’m hoping for the best.)This is very important… Please let’s stake our own treasury first while trying to explain everyone the importance of staking.

Better utilize those in the uniswap eth/lpt pool while idling, then part of liquidity could be removed instantly. Those funds would be earning swap fees and provide much needed liquidity for L2 LPT market

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Yes!!! Although Nico would probably have something to say to that too like “sandwich risk” or whatever and he’d probably be right (sigh)
No no. Let’s just stake it.

Thanks for raising this. Had a good discussion with Nico on this last week. I agree that the ecosystem is foregoing substantial yield. However, I am aware that this topic can have substantial consequences on the future of the network and protocol.

My initial questions are:

1. How do you suggest the treasury stake be allocated?
This is a deeply political consequence, that can have huge influence on governance, centralisation and control over how the treasury is allocated.

2. What are the consequences of staking the treasury?
My primary concern would be on the unbonding process. For context: there is a similar process with the Grant Node. Currently there is substantial complexity & delays when unbonding. This might be built into the LIP. (CC Sarah, perhaps you can say more.)

3. What percentage of the treasury should be staked?
Considerations could be given on whether it is 100% of the treasury or a lower percentage for more flexibility.

4. What are the security risks of staking the treasury?
Are there any vulnerabilities that might be exposed if it were to be staked. This would probably require a further audit, due to the size.

Staking the treasury is not just “free LPT”: The amount of LPT that gets minted each round is based on the inflation rate. It then gets distributed to those who stake. Now if the treasury is staked, the minted amount of LPT stays the same (since it’s solely based on the inflation rate), but it gets distributed among more staked LPT. So the end result is that Orchs and stakers will get less LPT if the treasury is staked.

So why bother with the difficult questions that come with staking and not just increase the treasury rate? It will have the same effect: Orchs and stakers get less LPT and the treasury more.