Staking Rewards for DAO Governance Participants

As the owners of a decentralized virtual world, the Decentraland community members should strive to increase its own participation in the platform’s governance.

Having the DAO as our participative organ, the progress we make towards this objective can be measured as the number of people that are actively involved in the DAO, as well as the stake devoted towards that. Unless these numbers increase, the project remains subject to attacks from opportunistic actors, and drastic changes could pass without real buy-in from users.

This proposal provides a solution to this problem, whereby the DAO taps on its MANA reserves to provide staking rewards to those who become an active part of the governance.

Currently, MANA holders must wrap their MANA, turning it into wrapped MANA (wMANA), with which they can suggest proposals and vote on other people’s. However, perhaps due to the friction inherent in using the dApp to do so, the level of participation has remained somewhat low across the board.

The proposed solution is having the DAO provide staking rewards to those who stake their tokens and become active participants in the governance. The DAO would periodically provide an amount proportional to the size of the stake. This amount is a Stake Reward Parameter that can fluctuate over time, and which is set by the DAO itself. Initially it could be set at 4,400,000 MANA per year, or 15% of the annual DAO budget. Depending on the amount staked, therefore, DAO participants could expect an APY between roughly 5-20% (in each extreme, the amount of MANA wrapped would respectively be 88 and 22 million MANA).

Additionally, there should be a Minimum Governance Parameter, explained as the minimum frequency of activity (e.g., 4 months) that would make the DAO deem a person who stakes eligible for the rewards. For example, the DAO could determine that those who vote at least once every 4 months are deemed active members of the DAO governance, and are therefore eligible for the staking rewards. It’s important to note, however, that abstaining is a valid form of participation.

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Not sure what would be the right amount for the rewards, but this is a great idea. We need to start taking governance in our hands!

I don’t think it’s the role of the DAO to give staking rewards, the DAO is to make choices and fund projects, not for staking, there are some projects for that, such as Coumpound, Aave, etc…

You would give MANA to people having already lot of MANA instead of funding projects for Decentraland, which is counterproductive I think

This is worth participating in and getting share reward in the process of participating in governance. Many mana holders just want to invest, they don’t care about governance, so for users who are willing to participate in governance, on the one hand, they need to replace mana with wmana, and on the other hand, give rewards

Staking MANA on MakerDAO helps you secure a loan. The way I see this, it’s in the DAO’s best interest to incentivize MANA holders to deposit their MANA and bootstrap itself into existence.
Ultimately, we want the DAO to be deciding on the things you mention, but we need an active base of participants first. Currently a lot of MANA is not in use.

It will just incentivize people to deposit MANA, not to participate to votes and decisions which is the goal of the DAO, so there will be a lot of wrapped MANA but a super low participation percentage.
Currently, for a vote to pass we need at least 20% of the wMANA supply to express opinion, I doubt we will ever reach 20% of participation if the only objective of people is to get staking rewards.
The way I see the DAO bootstrapping itself is to create interesting votes which attract people to deposit, we will soon be able to vote to ban names and decide streets names, it’s a first step to get the DAO active, but as more decisions will be possible, more people will deposit MANA with itself without any incentive other than participate to Decentraland decisions

More participation on the DAO is required for Decentraland to continue evolving. Incentivising votes is a good idea, however I’m not sure the incentive should be monetary. People should want to vote on topics related to the platform because they care about its future more than their own. It’s important that we create and distribute informative material to make the voting process as quick and accesible as possible. This is something the team are already aware of and working hard on. I believe there will be a lot more activity on the DAO once users can propose and vote on ideas with ease.

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I think we should redirect some of the fees from the marketplace to DAO participants. By this I dont only mean staking, but also voting, same as Kyber does with their DAO and their protocol fees. This will foster participation, specially in these days of high gas prices, we can’t expect people to participate voting if each time costs them significant $ and they don’t get any compensation. I’m not saying redirecting 100% of the marketplace fees either, but burning them all is like sharing the profit with ALL the mana holders, even those who don’t participate in the community, the free-riders. I think it’s a better to give a little more to the ones who actually participate.

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I think it’s a good idea to redirect some of the marketplace fees to the DAO but not to pay the people, we could perhaps implement meta-transactions to allow gas-less votes on the DAO to improve participation and the redirected fees could fund that (it’s gas-less for the user, but someone still have to pay for it).
Funding the DAO is a must if we want it to live beyond the MANA grant it was given.

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I agree that is not sustainable to subsidize participation in the long run, but it has worked pretty well for certain projects like Synthetix to do some 4 to 8 weeks reward programs to incentivize gathering liquidity where it was needed. Maybe we could do such a program in the beginning to foster people locking their mana and land in the dao, and then gradually decrece it. Many companies pay for user acquisition in their early stages, but of course it’s not something that can be sustained for ever. Also I think using NFTs (land and estates) for staking/rewards would be a first time in the industry.

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