Gotcha. Do I understand correctly that this will lead to more RARI governance participation through delegation to the DAO, but not necessarily more individual delegate participation?
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More governance power will be available to RARI DAO by virtue of the DAO receiving undelegated token for redistribution to active delegates.
Additionally, one can imagine more individual delegates being incentivised to participate in governance (or delegate to someone) given that the rewards for staking are dependent on whether they delegate to someone who is actively participating in governance (which could be themselves).
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Thank you for the explanation and the analysis! We think deploying in Rari Chain will be a good strategic decision, as it creates an initial pool of users which are incentivised to bridge to Rari Chain, stake and participate in governance. Moreover, having stRARI in RARI chain can synergize with future rewards programs happening in the Rari Chain.
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I have one more question @coolhorsegirl
Currently, there’s a minimum $RARI lock-up period before delegation is allowed = 1 month.
Once we move forward with this initiative, will there still be any lock-up requirements?
Or will users be able to freely stake/unstake and delegate/undelegate, similar to many DeFi platforms?
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Users be able to freely stake/unstake and delegate/undelegate.
Technically, you could have an LST with with a lockup—this would require significant customisation—but it greatly increases the likelihood of a price spread if the arbitrage takes days or weeks to execute. We would highly recommend against this.
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Hello all — we have a further recommendation regarding which chain to implement staking on between Arbitrum One and Rari Chain:
We recommend that RARI DAO set up staking on Arbitrum One instead of Rari Chain. If staking is done on Rari Chain, the staked-but-undelegated tokens won’t be able to participate in governance, even if redistributed, as long as governance isn’t enabled on Rari Chain. Governance enablement on Rari Chain is dependent on Wormhole integrating with Rari Chain (so that MultiGov can be activated).
Until MultiGov supports Rari Chain, both DAO governance AND staking should live on only one chain, either Arbitrum OR Rari Chain.
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I believe these costs are quite expensive, looking to the fact that we can use these funds to build a better NFT infrastructure instead of focusing on governance. I believe these costs should be halved at least looking to the work that will be done and the amount of people that is actually going to use it.
So if I understand it correctly, these stRARI tokens will be usable in other applications?
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Wormhole said Q4, fdn checked in earlier this week but the contact is OOO so expecting an update next week. Will also provide an update of the next steps in the upcoming October 8 community call!
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So if I understand it correctly, these stRARI tokens will be usable in other applications?
Yes, after depositing RARI into the Tally Protocol, users will receive a liquid staked version of RARI (tRARI). This can be used elsewhere, like in DeFi.
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Thanks for answering all the questions!
Would appreciate an update on how Arbitrum is going to handle the redistribution of voting power.
Regarding possible staking rewards, is this something the foundation has dedicated funds for, or would you be in favor of inflating the token (if this is possible at all with the current setup) @addie?
I also have to agree with @forexus that the implementation cost is substantial, regarding that customizing the Arbitrum contracts will likely not be as much work as the initial setup (forgive me if this assumption is not correct).
However, I generally support the proposal and believe that a governance update is a key initiative for the DAO.
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I’m working together with the GWG to initiate a separate discussion on this topic.
We’ll likely share it here in the forum early next week.
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This is interesting but the costs are way too high to even consider it at this stage of the DAO with current treasury and income in my opinion.
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Hey all - I’d like to point out 2 parts of the above proposal I want to make clear as we get ready for the onchain vote:
1. Staking will happen on Rari chain.
I’ve consulted with the Rari Foundation technical team on the best place to implement staking, and we’ve come to agreement that it is Rari chain. Liquidity is not a factor, because stRARI can instantly be staked/unstaked. No need for a swap, because users can always swap one for the other 1-for-1.
2. We estimate that Tally will complete development for RARI staking implementation in November, given the onchain proposal is expected to go live later today.
Given debate has meant staking has stalled the onchain proposal a bit, the timeline in the proposal has been shifted slightly back. Enabling staking for RARI will require a separate onchain vote by the DAO.
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Proposal will go live shortly!
We have added a 10% buffer to account for volatility of the price of $RARI. If it is not needed, we will return the remaining buffer to the RARI Treasury within 1 week of receiving the RARI.
Tally is working with RARI Foundation regarding the best way to sell RARI with the least price impact.
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I appreciate the effort put into drafting this proposal and understand the intent behind introducing RARI staking to enhance governance participation and security. However, at this moment, I have reservations about proceeding with such a significant initiative, primarily due to our DAO’s current state.
Key Concerns:
- Resource Allocation in a Low-Revenue Environment: RARI DAO is currently facing a period of low activity and minimal revenue streams. Investing $100,000 USD worth of RARI into staking infrastructure and additional integrations seems excessive given our current financial position. Committing such a substantial portion of our treasury when there’s limited income generation does not appear sustainable. This is a sophisticated mechanism that assumes a level of protocol activity and treasury inflow that we simply do not have at the moment.
- Timing and Scope Mismatch: While I see the potential value of staking in the long term, the proposal feels too advanced for our current ecosystem. As a small DAO, with relatively low governance participation and few active proposals, introducing a complex staking mechanism could lead to more overhead and complications rather than solving pressing issues. We need to focus on simpler, foundational improvements before scaling up to such a level of governance sophistication.
- Lack of Immediate Need: The core motivation centers around increasing governance participation and security, yet we haven’t identified these as immediate pain points. Participation has been relatively manageable, and our small size allows us to directly engage and coordinate through existing mechanisms. Introducing staking and its complexities might not only be premature but could also distract us from more pressing issues—such as enhancing revenue generation or stimulating protocol growth.
Considerations for the Future:
That being said, I’m not against the concept in principle. If we reach a point where RARI DAO demonstrates more consistent revenue streams, greater community engagement, and a clear need for more sophisticated governance mechanics, I would be open to revisiting the idea. At that stage, a staking mechanism might add value by formalizing governance participation and improving security as outlined.
Conclusion:
For now, I am opposed to this proposal, as I believe it is too advanced and resource-intensive given our current ecosystem status. However, I am open to reconsidering my stance in the future should the DAO’s priorities and capacity evolve to support such an initiative.
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I support this proposal, and will be voting for.
I believe that RARI staking will give added utility to Rari token, and investing in governance infrastructure now will form a solid foundation for improved DAO security and incentivized governance participation.
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Hi,
I’m Raf, CTO at Tally here.
We’re sending the staking contracts to audit soon. The proposal suggested a November timeline the proposal to turn on staking, but unfortunately we weren’t able to secure an audit that wraps up in November. We are targeting a mid-December date for the onchain proposal to turn on staking.
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Thanks @rafso for keeping us updated. An audit wasn’t mentioned in the milestones I think, are you doing an audit specifically for the RARI contracts?
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Hi Raf,
Thanks for taking the time to let us know. It’s great to see the team prioritizing security by ensuring staking contracts undergo a thorough audit process.
Considering the tight timeline, I’m curious: what additional measures are being taken to ensure staking contract security ahead of the audit, considering the timeline now extends?
I look forward to your feedback!