A sufficient amount of staked tokens is necessary to guarantee the security of the Kleros protocol against attacks. By KIP-37 and KIP-46, the community approved a staking rewards program with the goal of increasing the amount of PNK staked in the Kleros protocol.
There is currently nearly 115M PNK staked according to Klerosboard.
As the program is near to an end, the goal of this proposal is to extend it for one more year in 2023.
Extra Staking Incentives
In the Kleros protocol, jurors are already rewarded for their work with arbitration fees when they get drawn in a dispute. However, 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.
I propose to extend the program for 12 months starting in January 2023. Each month, jurors will receive a total of 1,000,000 PNK each month in proportion to the time and amount staked in that month. The proposed allocation is 90% on mainnet and 10% on xDAI.
The tokens will be distributed using a Merkle Drop contract.
There may be a seasonality of the distribution (like once per week/month).
The computation of rewards may use snapshots as long as those are taken at least once per day (i.e. if tracking every stake/unstake events is not easy, it is possible to look at snapshots of staked balances and use those to determine how to split the rewards for that period of time).
The goal of this proposal is to incentivize PNK holders to continue staking their PNK and thus securing the protocol. At current values, the program has a reward of a 9% APY (labeled in PNK).