Paradigm voted no on this proposal. Realize how important it is that the community can interpret the outcome of votes, especially when they’re split, so wanted to share our rationale here.
Facilitating higher voting participation is crucial. We’ll make better decisions and discourage crypto-economic attacks. Hope we can all agree on those goals and appreciate the work that @prose11 +co have done to push us to make progress.
However, we’re not sure that staking rewards are a sound near-term solution:
- Staking rewards do not directly incentivize meaningful governance participation, like voting (let alone thoughtful voting).
- Staking rewards may not pull that much MKR off lending markets. Holders can still tokenize and lend locked MKR. Even with a lockup, provided the rewards yield isn’t insanely high, the only effect may be to raise the borrowing costs a little bit – inconsequential for an actual threat actor.
- We agree with @g_dip and @equivrel that delegation is a more credible near-term solution to low voter participation. Staking rewards would also influence the incentives to delegate, so we’d prefer to revisit them after (or as a component of) implementing delegation.
This post does not constitute investment advice or a recommendation or solicitation to buy or sell any investment and should not be used in the evaluation of the merits of making any investment decision. It should not be relied upon for accounting, legal or tax advice or investment recommendations.