To define the distribution of Chainlink Labs “BUILD” rewards, issued to staked Link token holders, staked as stLink in the stake.link protocol.
Rationale
SLURP-8 formalized stake.link’s SDL/reSDL tokenomics, with a multiplier of rewards based on lock duration. A similar approach should be taken with BUILD program rewards.
Motivation
With Chainlink Labs announcing they will be releasing details surrounding the BUILD claims mechanism in the near future, it is important for stake.link to have a plan. Having this framework mapped out will allow us to immediately market the stake.link platform as the only option for those not already in the “Community Pool” to obtain BUILD rewards.
While specifics for the claim mechanism are TBD, it’s important for us to proactively account for rewards given to both the community stakers as well as stake.link node operator partners. This distribution may very based on a variety of factors including BUILD participant preference.
Specification
“Rake” from the Node Operator distributions:
reSDL holders - 15% (Same as stake.link Link staking)
stake.link core contributors - 1% (stake.link Link staking is currently 3%. However, this covers the cost for on-going Chainlink automation jobs. There will need to be work done to build out the stake.link claims for each BUILD distribution.)
stake.link treasury - 2% (This amount keeps the total rake the same as Link staking, but aligns stake.link with the success of the BUILD partners. These amounts can be used for promotions, liquidity incentives, or a variety of other options in the future. They would require a project specific SLURP passing to access.)
“Rake” from the Community Pool distributions:
reSDL holders - 4% (1% less than stake.link Link staking)
stake.link treasury - 1% (Does not exist in stake.link Link staking.)
Every effort should be made for reSDL holders to claim BUILD rewards quickly after distribution through Chainlink Labs claim mechanism. Rewards should be available for claim for 120 days before unclaimed rewards are sent to the stake.link treasury.
Use of the 5% node operator delegation fee would provide a further income stream for node operators and help retain them in the protocol
A 3% core contributor fee that would help the team more easily cover gas costs across the protocol (which I understand has been an issue)
Provide simplicity as all fees would be aligned
I do see the value of sending 2% of the rewards to the Treasury for distribution but wonder if this is needed when the Treasury is still holding 28m SDL.
Depending on the size of the BUILD rewards we may also need to look at a threshold for eligibility or otherwise smaller holders’ rewards would be dust. Perhaps 10,000 reSDL? Such a threshold would also incentivise locking and token utility. But that is a future discussion.
To chime in, I would emphasise that without the technical details on how BUILD claims will work, it’s not possible to commit to whether the fee structure can be changed.
For example, current fees are engrained into the staking pool and the vault contracts, so if each respective vault has to claim its own BUILD token amount then it’d be technically infeasible taking into account gas constrains to have a new dedicated fee system outside of what’s already there.
I’m not against fee changes, but there’s technical caveats so keeping the same fee structure may be most plausible.
Would it be possible to add a reSDL claim threshold while still maintaining the current fee structure? The purpose for the SLURP is to formalize a benefit to reSDL holders. Imo, it is implied that reSDL holders are entitled to BUILD rewards but without a passed proposal, they are entitled to nothing.
Would it be better to edit this SLURP to state the current reward structure for build rewards will be exactly the same as Link staking rewards, and then possibly propose a SLURP revision once more details are known?
I don’t want to overcomplicate things, but clarity is important.
Appreciate you putting this SLURP forward; it’s a hot topic within the community, and I completely agree that we need a foundational thesis to build upon. I personally love the treasury idea.
Echoing @Jonny, I believe we can only make conjectural theses at this point, since no one knows exactly how CLL will design the BUILD rewards mechanism. I suspect it may resemble the existing LINK rewards system, which could likely result in gas-intensive solutions and probably require self-imposed limitations.
Meanwhile, the core team has done something, as we saw recently stakedotlink can make rewards available on Arbitrum. I wonder if this infra could eventually be leveraged for BUILD rewards.
A major concern I share with other community members is: How can BUILD rewards be integrated for stLINK token and reSDL nft holders on a technical level?
I’ve been pondering this issue and realized that AAVE V3 has implemented a time-based multi-reward layer for both aTokens and debtTokens.
Using already existing systems lets us solve this & will save the devs time and gas costs vs building out entirely separate systems, I’m for this solution!
SDL holders have more skin in the game and are more closely aligned with the greater vision of SDL that expands beyond stLINK. I believe shifting value slightly towards reSDL holders (to the point that it does not noticeably impact stLINK stakers) can let us focus on both at the same time, while inching towards giving core stakeholders slightly better incentives. It doesn’t have to be a zero sum game, very small concessions on one side of this equation can create magnitudes greater benefits for the other.
I’d like to revisit this, pending and with attention to how Chainlink Labs intends to architect the distribution.
The distribution of the BUILD rewards needs to consider the amount of stLINK, and reSDL in a given wallet; and needs to optimize BUILD rewards in our SDL ecosystem to those players in a substantive manner. (Initially, I had inserted the word dramatic; that is optimize BUILD rewards in a “dramatic” way, but I decided to tone it down, but perhaps it should be very dramatic.)
In the same way that elements scale, for example in Elden Ring, to maximum benefit, a formulaic determination should be made. A certain amount of reSDL augment the stLINK receiving “x” amount of BUILD rewards.
This will increase the value of SDL. This also has the potential to address certain historic factors that may be cited at times in the deepest of our discussions.
Given a=stLINK, b=reSDL, and c=BUILD Reward
(a)(b)=Build Reward distribution=c; hence, constant greater than 1 needs to be determined for “c”=BUILD reward distribution.
This is an opportunity for the protocol to consider historical items. This can of course be modeled; and of course, is pending and subject to allowing factors from the actual manner it which CLL attempts to deploy this.
