Stake Management Part 1
Bonding Period & Slow Release
Co-Authors: Tracie Myers & Luis C. De Leon
Bonding Period
- Period of time for the staked tokens to mature.
- Suggestion: 26 Eons (1 Eon = 7 days, total days = 182).
- Subject to change through governance in the network.
- After stake is deposited, it cannot be taken out before the end of the bonding period, once it has reached maturity.
- In the case of unstaking during the bonding period a portion of the stake is burned while a portion is returned; however, there is a cap on how much can be unstaked which is directly proportional to how long the stake has been in the network.
- Percent of days staked = caped percent to unstake
- The inverse of the percent of days staked = percent burned
- Total returned = percent unstaked - percent burned
- When additional POKT is staked during a bonding period a new bonding period occurs.
- If the new bonding amount is > old bonding amount
- New bonding period = ((Days left in new bonding * percent of new stake) - Days left in old bonding) / ((number of times new stake has been added) + Days left in old bonding)
- If the new bonding amount is < old bonding amount
- New bonding period = ((Days left in new bonding * percent of old stake) - Days left in old bonding) / ((number of times new stake has been added) + Days left in old bonding)
- If the new bonding amount is > old bonding amount
- Why have a bonding period?
- Bonding is the “cost” of using the network.
- If users are able to stake and unstake based on the market price of the native POKT token, this could destabilize the Pocket Network.
- Advantages
- To avoid unstaking right after they joined the network.
- Provides stability for the network.
- To have a flexible mechanism to unstake in case of market upswings.
- Provides a systemic way of burning POKT in case of market upswings, which helps to keep inflation in check.
- Disadvantages
- The user’s stake is locked and could face penalty to unstake early.
Slow Release
- This mechanism starts the moment the user’s bonding period has completed.
- Users are capped on what amount they can unstake by a certain percentage.
- Suggestion: 60% once per Eon (7 days)
- POKT unstaked = (Total staked * 60%)
- Percentage subject to change through governance in the network.
- Suggestion: 60% once per Eon (7 days)
- A user can unstake once every Eon (once every 7 days).
- If a user stakes more POKT after their bonding period has ended this triggers a new bonding period to start.
- Advantages
- Ensures there is not a mass loss of infrastructural capacity within the network.
- Helps stabilize the token price.
- To disincentivize unstaking.
- To have a flexible mechanism to unstake in case of market upswings.
- To avoid users unstake 100% of their stakes at one time.
- Allowing people to unstake before a bonding period has elapsed incentivizes users to unstake in case of market upswings, diminishing the infrastructural processing capacity of the network.
- Disadvantages
- The user can not immediately have access to all of their stake.