Authors: StableLab / Kaf
Reviewers: Anna Riabokon (RARI Foundation)
- Summary
This proposal seeks approval to authorise the staking rewards distributor contract to spend up to 15,000 RARI from the DAO treasury to fund Phase 2 (months 5–8) of the governance staking programme on Rari Chain. These funds will be used to deliver the second tranche of staking incentives, which target a 15 % annualised APR for an estimated 300 000 RARI migrating and delegating to Rari Chain. The staking incentives programme itself was approved via RRC‑34: Enable RARI Staking, and the reward amounts for each phase were outlined in RRC‑43: Rari Staking Incentives Program. After the Phase 2 rewards have been distributed, the programme will be paused to allow the DAO to reassess the incentive structure and governance alignment before committing any additional rewards.
- Background & Motivation
Migration and Staking Incentives
Rari DAO is migrating governance from the Ethereum mainnet (veRARI) to Rari Chain (stRARI). To bootstrap adoption of the new L3 and align token holders with delegates, the DAO approved a one‑year staking programme with diminishing APRs: 25 % for Phase 1, 15 % for Phase 2, and 10 % for Phase 3. The goal is to attract roughly 300 000 RARI (matching the amount locked in veRARI) to the new staking contract.
Phase 1 allocated 25 000 RARI for rewards and successfully attracted ~140 k RARI in TVL. However, the realised APR (~56 %) was well above the 25 % target due to lower than expected participation, and approximately 4 200 RARI in rewards remained unspent. Community feedback and the Season 1 report indicate that participation plateaued and oversubscription raised questions about cost‑effectiveness. Continuing into Phase 2 at a lower APR allows the DAO to honour its commitment while reducing emissions and providing time to recalibrate the programme.
Phase 2 Objectives
- Lower APR: Reduce the annualised yield from 25 % to 15 % to conserve the incentive budget and encourage sustainable participation.
- Encourage delegation and governance engagement: Reward stakers who delegate their voting power and participate in on‑chain governance.
- Pause after Phase 2: Once the Phase 2 rewards are fully distributed, the staking programme will be paused. This pause will allow the DAO to analyse updated metrics (e.g., voter turnout, delegate participation, distribution of staked RARI) and consider dynamic or participation‑linked reward structures before launching any further phases.
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Proposed Mechanics
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Reward formula and amount
- The reward amount for Phase 2 is calculated using the approved formula for the staking incentives programme:
RARI incentives = 300 000 × Target APR × (Phase duration ÷ 12 months. - With a target APR of 15 % and a four‑month duration, this yields 15 000 RARI for Phase 2.
- Any unspent rewards from Phase 1 (~4 200 RARI) will be returned to the DAO treasury or rolled forward at the DAO’s discretion.
- Staking rewards distribution
- Rewards are distributed proportionally to the amount of $RARI staked. Participants must delegate their staked RARI to an eligible delegate to earn rewards.
- The staking contract will emit rewards linearly over the Phase 2 period. Once the 15 000 RARI cap is reached, emissions will cease and the programme will automatically pause.
- Treasury actions
- Approve: The DAO treasury will execute an approve() transaction to grant the staking rewards distributor contract permission to spend up to 15 000 RARI from the treasury.
- Set reward amount and notify: The staking rewards distributor contract will be called via setRewardAmount(15 000 RARI) and notify() to start the emission schedule (as in the Phase 1 proposal).
- These calls will be bundled into a single proposal on Tally to ensure atomic execution.
- Pause mechanism
- The proposal will specify that no further staking rewards will be authorised after Phase 2. Once the 15 000 RARI are distributed, the staking incentives contract will not receive additional funding unless a future proposal explicitly approves Phase 3 or a redesigned programme. This ensures the DAO retains flexibility to redesign or discontinue the programme based on updated governance metrics and community input.
- Considerations
- Budget utilisation: Phase 1 used ~20 800 RARI of its 25 000 RARI allocation, leaving ~4 200 RARI unused. Funding Phase 2 with 15 000 RARI keeps total emissions within the 50 000 RARI staking budget approved in RRC‑43.
- APR overshoot: Lowering the target APR and pausing after Phase 2 addresses concerns about runaway APRs and budget exhaustion. If TVL remains below the 300 k goal, realised APRs may still exceed 15 % — underscoring the need to reassess incentive mechanics.
Governance alignment: Phase 1 data showed that increases in staking did not proportionally translate into voter turnout or delegate participation. Future incentives may need to tie rewards to governance activity (e.g., voting, creating proposals) to better align incentives with DAO objectives.
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Next Steps & Timeline
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Forum discussion (7 days): Share this proposal with the community to gather feedback on the Phase 2 reward amount and the plan to pause after its completion.
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On‑chain submission (mid‑December 2025): Submit the proposal on Tally with the approve(), setRewardAmount() and notify() calls.
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Execution: If the proposal passes and the veto period elapses, the treasury will transfer 15 000 RARI to the staking rewards distributor contract. Rewards will begin streaming immediately until the allocation is depleted.
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Pause & reassessment: After Phase 2 concludes, the staking programme will pause. StableLab and the Foundation will compile a Phase 2 report and present options for redesigning or terminating the incentives programme based on updated data and community feedback.
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Summary
Funding Phase 2 of the staking incentives programme with 15 000 RARI aligns with the reward schedule approved in RRC‑43, reduces the APR to 15 %, and honours the DAO’s commitment to support the migration to Rari Chain. Pausing the programme after Phase 2 allows the DAO to evaluate participation, governance engagement and budget utilisation before deciding whether to proceed with Phase 3 or adopt a redesigned incentives model. Community feedback is essential to finalise the amount, timing and conditions of this proposal.
Links
Governance
RRC-30 – Enhancing RARI DAO Governance (migration to Rari Chain)
RRC-34 – Enable RARI Staking (deployment of staking contract)
RRC-43 – RARI Staking Incentives Program (12-month incentives program, approved 16 May 2025)
RRC-45 – Fund Phase 1 of RARI Staking Rewards (authorises up to 25 000 RARI for Phase 1)
Analytics