TEMP-Check SLURP-45 | Adopting Seasonal Approach for future BUILD Reward Distribution for stake.link

SLURPs
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The launch of Chainlink Rewards Season Genesis is incredibly exciting news! It marks a new era for ecosystem participation and rewards, starting with the Space and Time (SxT) distribution kicking off May 8th. This and all future BUILD Reward Distributions present a fantastic opportunity for stake.link to foster the narrative of a multi-yield protocol and token.

While thinking about how we best structure our own SLURP-40 and the respective Addendum in light of this going forward, I wanted to propose an approach that leverages the strengths of stake.link as a LIQUID staking protocol while embracing the spirit of following and upcoming Chainlink Seasons:

Pending TEMP-Check / Governance Decision

  1. For the Initial BUILD Distribution (Aligning with Season Genesis):

Core content of this SLURP-45

  1. For Future BUILD Distributions (Aligning with Subsequent Seasons): Switch to Time-Weighted Averages (TWA)

    • Proposal: Starting with the next BUILD distribution cycle following this initial one, let’s transition to using a Time-Weighted Average (TWA) calculation for stake.
    • Why? As we move into recurring reward seasons, TWA better reflects sustained participation and commitment over time, aligning perfectly with the “seasonal” concept Chainlink is introducing. It rewards consistent supporters fairly.
    • Flexible TWA Period: Crucially, the averaging period for TWA should reset for each new BUILD distribution cycle and match its frequency.
      • If BUILD rewards align with a monthly Chainlink season cadence, we use a TWA calculated over that month.
      • If it’s quarterly or every 6 months, the TWA period adjusts accordingly.
      • This ensures fairness and accurately captures participation within each distinct reward season.

Looking Ahead:

This two-pronged approach allows us to kick things off by celebrating the liquidity and accessibility of stLINK, while setting a clear path for rewarding ongoing commitment in future seasons using TWA, mirroring the evolution of the broader Chainlink Rewards program.

SLD is set to embrace Chainlink Rewards Seasons! By adopting the proposed model, we can ensure our BUILD distributions are timely, fair, and strategically aligned with both stake.link’s unique value proposition and the rhythm of the Chainlink ecosystem.

2 Likes
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Am I correct in understanding that for the next season, assuming it runs from 06 May - 31 July for example, then the total build drop will be apportioned over those 3 months, as opposed to the existing 2.5 yrs history of SDL?

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Under the assumptions mentioned yes the timeframe for the specified season would be those 3 months.

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sounds like it

I agree with a weighted average approach here in general though. There have been, and I suspect may still be in the future, pretty heavy incentives for the original SDL members. Of course I would like there to be another allocation or weighting bonus for long term members but at some point we have to be realistic with expectations. The original SDL crew can’t have such a heavy monopoly on rewards and incentives that it disincentivizes new participation.

My suggestion to balance this would be a protocol wide TWA + seasonal TWA. What those factors are is up for debate. For example, a 10% weight on protocol wide participation and then 90% for the rewards season gives you your total allocation. Just show up for the season? You’re capped at 90%.

1 Like
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2 cents:

The overhead strategy of stake.link is to continously stake more LINK, create stLINK, and grow protocol TVL.

I understand the intent of SLURP-45 is meant to reward sustained participation for stLINK stakers through calculating BUILD with a TWA.

On the other hand, this system design could unintentionally make it harder for new users to justify moving their LINK into stake.link.
If we’re trying to grow adoption, especially with Chainlink Rewards Seasons kicking off, adding that kind of complexity or delay in earning rewards might be a deterrent.

One of stLINK’s biggest strengths is its simplicity and liquidity, TWA kind of works against that.
I think the TWA/nonTWA debate is basicly a question of choosing between a strategy tailored to keeping stLINK liquidity vs gaining stLINK liquidity.

It might be a better strategy to opt for the solution which is better tailored to attracting new participants, rather than going for the solution for keeping existing participants.

Once a participant stakes and then leaves stake.link, the TVL remains, given liquidity in curve or pp. Increasing the userbase should be prioritized over incentivizing keeping the userbase. The userbase will stay either way, as there is no space in the native pool.

Complexity is a tax on growth, lets not slow down adoption just to fine tune retention mechanics, especially when the retention mechanic can be handled more elegantly by reSDL.

I think the DAO should contemplate focusing on long term participation through locked SDL instead of subzidizing stLINK more than is required to grow the userbase.

That way, we’re not penalizing users for choosing to move their LINK to liquid staked with their stLINK -the value prospect of BUILD rewards are made available to the user instantly, as the full value prospect of weekly rebases has been made available to the end user instantly.
The value prospect is consistent across all verticals.

At the same time we are giving meaningful rewards to those who are committed to the protocol long term through SDL. It keeps things clean: stLINK is the accessible entry point, SDL is the commitment layer. That separation could make the whole system easier to understand and more compelling for new users, while still rewarding long-term believers through their commitment made through staked and locked SDL.

-Do not increase incentives stLINKers simply holding stLINK
-Instead increase incentives for reSDL stakers

I am behind SDL no matter which BUILD payout structure we pick as a DAO. Either way, I thought there should be made a proper argument against TWA, before deciding this is the payout structure we choose.

More stLINK → more TVL → more fees → more demand for SDL → stronger DAO.
This is the flywheel, and it starts with more stLINK.

1 Like
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Both points are strong for certain. I see the value in rapid growth of new users for certain, but, speaking as one of those new users, I think it’s completely fair to consider a TWA keeping tempo with chainlinks’ own seasonal cadence. Heck. I was personally fine with a TWA that stretched from the original 5 May snapshot, but I don’t want it to feel too punishing for newcomers either. I think matching CLL’s seasons and resetting the TWA is a fair balance.

1 Like