[SIP-00005] - Updating Staking Rewards Boosters

proposals/00005-adjusting-staking-reward-boosters.md

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+---
+number: '00005'
+title: Updating Staking Rewards Boosters
+authors: Leo Chen ([email protected])
+sponsors: Ramtin Seraj ([email protected])
+created: 2025-01-04
+type: Standard
+status: Draft
+supersedes: 
+superseded-by: 
+extends: 
+---
+
+## Summary
+
+This SIP propose increasing the reward boosts when community
+ members decides to stake and secure the network for a longer 
+ time windown. 
+
+[forum discussion link](https://forum.story.foundation/t/proposal-update-staking-rewards-boosters/552)
+
+## Motivation
+
+The current staking reward multiplier structure is as follows:
+
+- Flexible staking: 1.0x
+- 90-day fixed staking: 1.051x
+- 360-day fixed staking: 1.16x
+- 540-day fixed staking: 1.34x
+- Locked token staking: 0.5x
+
+These multipliers were initially designed based on the 
+compounding effect of rewards, with a slight bias toward 
+incentivizing long-term staking. However, given the current 
+inflation rate and competitive staking models in the crypto 
+market, the existing structure may not provide sufficient 
+incentives for long-term commitment.
+
+## Proposal
+
+We propose updating the staking reward multipliers to the 
+following structure:
+
+- Flexible staking: 1.0x
+- 90-day fixed staking: 1.1x
+- 360-day fixed staking: 1.5x
+- 540-day fixed staking: 2.0x
+- Locked token staking: 0.5x
+
+This revision aims to significantly enhance incentives for 
+long-term stakers while maintaining a balanced reward 
+distribution. The proposed adjustments provide a more 
+substantial differentiation between short-term and long-term 
+commitments, aligning with industry best practices to attract 
+and retain committed stakeholders.
+
+### Rationale
+
+- Enhanced Long-Term Staking Incentives: The updated 
+multipliers offer a more compelling reward structure for 
+stakers willing to lock their tokens for extended periods, 
+promoting network security and stability.
+
+- Competitive Positioning: The revised staking model ensures 
+that our staking mechanism remains competitive in the 
+evolving crypto landscape, where higher multipliers for 
+long-term staking are becoming more common.
+
+- Inflation Neutrality: This proposal does not alter the 
+overall token emission rate or inflation ratio, ensuring that 
+the total supply dynamics remain unaffected while improving 
+reward efficiency.
+
+### Drawbacks
+
+N/A
+
+### Alternatives Considered
+
+N/A
+
+### User Impact
+
+By implementing these changes, we can foster a stronger, more 
+committed staking community while maintaining long term 
+economic sustainability within the ecosystem.