Juror incentive program

Proposal
#1

Current staked amount is OK but could be better

Currently there is more than 10M$ worth (94,017,700 PNK according to klerosboard) of PNK staked. This looks good in absolute numbers and relative to liquidity (even with an infinite amount of capital, an attacker wouldn’t find enough PNK for sale on exchanges to buy this much) but in term of % of the supply it’s not that high (~12% of the supply is staked).

Extra incentives for staking

Jurors are already rewarded for their work with arbitration fees when they get drawn in a dispute. However simply staking in courts with a low amount of disputes per staked PNK (like the general court) doesn’t provide a high amount of financial rewards while those stakers are still securing the system.
We’ve seen with the recent trend of yield farming that providing tokens to stakers works in increasing the value staked (see Uniswap and SushiSwap as the most prominent examples).

Proposal

We propose to set up a juror incentive program which will reward staked jurors in proportion of their stake.
For the year of 2021, jurors will receive a total of 1 000 000 PNK each month in proportion of the time and amount staked in this month.

In addition, any address which staked PNK before 01/12/2020 will receive a retroactive distribution of 1000 PNK.

Rationale

The goal of this proposal is to incentivize PNK holders to stake their PNK. At current values staked it would correspond to a 27% APY (labelled in PNK) for PNK staking. We expect this to drop significantly (to a 1 digit value) as it would create extra incentives for staking and the total amount of PNK staked would increase diluting the reward.
It would also improve the user experience of jurors staking small amount and not being drawn often removing the negative feeling of “staking for nothing”.

The 1000 PNK for every address which staked before December would give a small boost in the chances of being drawn for jurors with low stakes. The amount stays modest to avoid incentivizing the creation of multiple addresses for the purpose of retroactive airdrops.

Note that at this stage it’s just an idea for community discussion.

10 Likes
#2

The idea seems good to me. However I fail to see how this does not incentivise holders to split their holdings in chunks of 500 PNK each and stake with those in general court. Isn’t that something we want to prevent? Or do we want to do some PoH check?

1 Like
#3

This is in proportion of amount staked.

Only the one time 1000 PNK would be per address and because it looks at staked addresses before December people would have needed to have done this before this post.

1 Like
#4

I think this is a very clever incentive.

Big enough but small enough. Just right.

4 Likes
#5

Ah that makes more sense. Thanks for clarifying. LGTM.

#6

Maybe also includes some incentives for voting in kleros governor - governance involvement is also important to a decentralized platform.

3 Likes
#7

Sounds like a nice idea. Just wondering where the distributed pnk would come from?

#9

It would be from the “airdrop” allocation.

1 Like
#10

Please allocate some airdrop to Kittyswaps.org, we are early startup and need help from Kleros community.
Juror incentive program is really helpful to PNK.

1 Like
#11

Sounds good Clément! Long time lurker here with a decent amount of skin in the game. I think a program like this will help Kleros reach its goals.

A couple of questions:

  1. How did you decide on the reward size of 1m PNK per month?
  2. How does the team intend to get the message out there for this incentive program?
  3. I am a firm believer that Kleros has better chances to succeed as a grassroots initiative, reaching far and wide to attract as many jurors as possible. Is there a plan in place to prevent the big whales from hovering up most of this reward?
  4. When can we get this to a vote?

Thanks for your time and continued effort to push the boundaries of this project. Onward and upward!

1 Like
#13

It was chosen such that taking into account the increase in the amount staked due to the program itself, we would get some APY roughly similar to the APY of staking ETH in ETH2.0.

As usual with the blog, Twitter and telegram if it gets approved.

For now without identity system, there can’t be a way to prevent whales of getting a significant part, which is OK as they also contribute to Kleros security.
In the future, we could explore some non-linear rewards with Proof-Of-Humanity.

We’ll put it to vote in the next voting batch.

3 Likes