Season 1 Staking Program Report

[Kaf_StableLab]

Background & Context

The Rari DAO is in the middle of a major migration from the Ethereum mainnet (where RARI governance operates through veRARI lockers) to an Arbitrum-based L3 (Rari Chain). This shift was authorised by the DAO through RRC-30 and aims to improve governance efficiency, reduce gas costs, and give the protocol room to scale.

To migrate, veRARI holders must unstake, bridge, and delegate their tokens on Rari Chain. Without sufficient incentives, many users might hesitate to make this transition, so the DAO approved a one-year staking programme that offers rewards to stakers who delegate their voting power.

The programme is designed not only to facilitate migration from mainnet but also to attract new participants and strengthen overall governance engagement on Rari Chain. The programme’s overarching goal is to attract roughly 300 000 RARI (matching the amount locked in the veRARI contract) to the new staking contract. Staking incentives are therefore both a technical necessity for migration and a way to boost governance participation and token utility.

Executive Summary

• Context. The Rari DAO is migrating governance from the Ethereum mainnet (veRARI) to the Rari Chain (stRARI). To bootstrap adoption of the chain and align token holders with delegates, the community approved a twelve-month incentives programme in April 2025. The proposal allocated 60,000 $RARI from the treasury to fund staking rewards and bridging quests. The goal was to attract approximately 300,000 $RARI to the new governance contract and offer a target APR of 25 %, 15 % and 10 % across three four-month phases.

• Overall TVL & rewards. Using on-chain data from the public Metabase card (RARI staked), we analysed daily total staked and cumulative rewards from 11 Jun 2025 to 18 Oct 2025. During this extended period:

  • Peak TVL was ≈140 494 RARI (30 Aug 2025). Average TVL was ≈105 000 RARI with 135 831 RARI staked at the end (18 Oct 2025). This represents ~45 % of the 300 000 RARI target.
  • 20 800 RARI in rewards were distributed, implying a cost per staked RARI of ~0.197 (≈19.7 % return over the 4-month period, equivalent to ≈56 % annualised APR).
  • The realised APR (annualised rewards ÷ average TVL) is ≈56 %, more than double the Phase 1 target of 25 %.

• Flows. Net inflows totalled ≈ 169,000 RARI, while outflows summed ≈ 34,000 RARI, indicating that most stakers remained throughout the period. Inflows spiked in June and early July as the programme launched and then stabilised after mid-September.

• Insights. Early oversubscription pushed realised APR well above the target. In Phase 1, 20,800 RARI were distributed — ≈ 83 % of the 25,000 RARI Phase 1 allocation (≈ 42 % of the annual 50,000 RARI budget) — leaving ≈ 4,200 RARI unused within the phase.

• A significant portion of the rewards went to a relatively stable base of stakers. Additional metrics (number of stakers, delegation behaviour, governance participation) are needed to evaluate alignment between staking and governance engagement.

Methodology & Data

• Data source. Daily on‑chain totals were exported from the “RARI staked” public card on Tally’s Metabase. The data set contains date, total_staked and cumulative_rewards_distributed fields from 11 Jun 2025 to 18 Oct 2025.

• Calculations. We converted dates to UTC and computed:

  • Average TVL: mean of daily total_staked.

  • Peak TVL: maximum daily total_staked.

  • Rewards distributed: difference between final and initial cumulative_rewards_distributed.

  • Realised APR: (total rewards ÷ average TVL) × (365 ÷ days).

  • Cost per RARI staked: total rewards ÷ average TVL.

  • Net inflows/outflows: sum of positive/negative daily changes in total_staked.

  • Weekly flows: aggregated inflows/outflows per ISO week.

• Limitations: The dataset does not include number of wallets, individual stake sizes or governance participation. Without these metrics we cannot compute retention by cohort, Gini concentration or cost per delegate. Future reports should integrate additional on‑chain queries and wallet‑level data.

Key Results & Visualisations

Source: Metabase

Total staked over time

The total staked RARI grew rapidly in June, plateaued around mid-September, and reached ≈135 831 RARI by 18 Oct 2025, with a peak of ≈140 494 RARI in late August.

Cumulative rewards distributed

Rewards accrued linearly, reaching ≈20 800 RARI by 18 Oct 2025. This represents ≈83 % of the 25 000 RARI allocated for Phase 1, leaving ≈4 200 RARI unspent within the phase. Given that Phase 2 targets a lower APR (15 %), run-rate spending should decline, reducing the risk of overshooting the annual staking-rewards cap (50 000 RARI).

Governance metrics

At programme launch in mid-June 2025, governance activity on Rari Chain was near zero as staking and delegation contracts had just been deployed. By early July, the Rari Governance Dashboard reported 126,404 delegated RARI, 388 active stakers, 25 active delegates, and 18 unique voters.

By the end of Phase 1, these figures had increased to 196,792 delegated RARI, 751 active stakers, 26 active delegates, and 42 unique voters. This represents roughly a 56 % increase in delegated tokens, a 94 % growth in active stakers, and more than double the number of unique voters, while the number of active delegates remained stable.

These results confirm that the staking programme significantly improved on-chain participation and community engagement, though governance power remains concentrated among a few delegates, an aspect that requires continued monitoring in subsequent phases.

Weekly inflows and outflows

Weekly inflows were concentrated in the first four weeks of the programme (mid‑June to early July), accounting for most of the 169 k RARI of net inflows. Outflows remained modest (≈34 k RARI), suggesting strong retention.

KPI Summary

Metric	Value	Notes
Duration analysed	11 Jun 2025 – 18 Oct 2025 (130 days)	Extended data cut as of report date
Initial TVL	≈2 RARI	Programme started from near-zero stake
Final TVL	≈135 831 RARI	~45 % of 300k goal
Average TVL	≈105 000 RARI	Mean daily stake
Peak TVL	≈140 494 RARI	30 Aug 2025
Rewards distributed	20 800 RARI	42 % of 50k annual budget
Realised APR	≈56 %	Annualised return vs. 25 % target
Cost per staked RARI	≈0.197 RARI	Rewards ÷ average TVL
Total inflow	≈169 000 RARI	Sum of positive daily changes
Total outflow	≈34 000 RARI	Sum of negative daily changes
Rewards per net inflow (spent/inflow)	≈0.153	20 800 ÷ 135 000 ≈ 0.153
Net inflow per reward	≈6.5 RARI	Each RARI of incentives attracted ≈6.5 RARI of deposits

1. Overshooting targeted APR. The realised APR (~56 %) far exceeds the Phase 1 target of 25 %. This is because ~105 k RARI were staked on average—about one-third of the anticipated 300 k. Since rewards were fixed (25 k RARI over four months), fewer stakers meant higher per-wallet returns. If participation remains below the target, the programme will be more expensive per RARI than expected and the budget could deplete early.
2. Strong initial growth then plateau. Inflows were front-loaded in June as holders bridged and staked. After early August the TVL stabilised around 130–140 k RARI and incremental inflows slowed. This suggests that the initial marketing push was effective but subsequent momentum waned.
3. Retention appears high. Outflows (~34 k) were small relative to total inflows (~169 k), indicating most participants kept their stake through the initial 4-month phase.
4. Partial progress towards 300 k target. By 18 Oct 2025 only ~45 % of the desired 300 k RARI were staked. Additional incentives or marketing may be needed to attract the remaining veRARI holders.
5. Budget utilisation. As of 18 Oct 2025, 20 800 RARI have been distributed, leaving ≈29 200 RARI out of the 50 000-RARI annual staking budget (≈58 % remaining). Recalibrating to the Phase 2 target APR of 15 %—rather than 25 %—implies an estimated ~95 RARI/day in emissions, yielding ~307 days of runway (29 200 ÷ 95 ≈ 307), i.e., through ~21 Aug 2026 from 18 Oct 2025. This comfortably covers the remainder of the 12-month programme, contingent on comparable staked base and participation.

Strategic Considerations

1. Dynamic reward schedule. Instead of fixed rewards, adopt a dynamic rate (e.g., percentage of average TVL) or a decaying function to align incentives with participation and avoid unexpectedly high APRs.
2. Link rewards to governance participation. A governance participation pool is already set; the next step would be to adjust its parameters — either increasing its allocation or reducing rewards for passive stakers — to ensure incentives drive active voting and delegation rather than mere staking.
3. Cap per-wallet rewards or use quadratic weighting. To mitigate concentration, introduce caps or diminishing returns for very large stakes, and provide higher effective yields for small/medium holders.
4. Enhance analytics. Collect wallet-level data (number of stakers, stake distribution, delegate addresses) and governance metrics (turnout, proposal participation) to measure alignment with KPIs.
5. Communications strategy. Continue targeted outreach to veRARI holders who have not yet migrated, emphasising improved yields and governance impact. Provide clear guides on bridging, staking and delegation.

Limitations

• Incomplete metrics. The dataset analysed only includes aggregated staked amount and cumulative rewards. It lacks wallet‑level metrics, price or liquidity data for stRARI, or governance participation statistics. Consequently, analyses of distribution (Gini), delegate activity or cost per active voter could not be performed.
• Short observation window. Data covers the first four months of a twelve‑month programme. Later phases may show different dynamics and APRs (15 % and 10 %) as budgets decrease.
• Off‑chain factors. Market events (RARI price volatility, competing yields) and marketing efforts also influence staking behaviour but were not assessed.

Appendices

Resources

Governance Proposals (Tally)

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

Tally Metabase public card – “RARI staked”

[forexus]

During my visit to Tally, the dashboard displayed over 160,000 RARI staked (inclusive of distributed rewards), a figure that subsequently stabilized with minimal fluctuation.

I question whether intensified marketing efforts would have driven meaningful increases in unique users, veRARI holders, delegates, or overall staking volume. In my view, such outcomes would have required robust marketing backing directly from the Rarible team.

While the APR was undeniably attractive, the prevailing RARI price renders continued staking rewards inadvisable. Furthermore, the ecosystem lacks a healthy liquidity pool and an efficient mechanism for bridging substantial quantities of $RARI from RARI Chain to Ethereum or Base. I observed no discernible impact from the staking campaign on the RARI price even without a healthy liquidity pool.

While I personally like how staking was set up on Tally, the question arises, should we continue the rewards on RARI Chain? Gas costs on Ethereum are not really high anymore (still higher) and we might have a better chance to attract new people.

[LAD]

Thank you, @Kaf_StableLab, for this report. The report shows a 5.6% voting rate despite an increase in stakers from 388 to 751 and just one increase in active delegates. Based on this and the strategic considerations outlined, we recommend tying rewards to actual voting, proposal creation, or delegate participation, and implementing a gradual reward decay. Even though the DAO still has 58% of its reward budget remaining, if passive stakers increase and active participation doesn’t grow, the high returns will persist, reducing the program’s efficiency regardless of the APR reduction.

[Jaf]

IMO the strategic considerations make a lot of sense long-term. I’m just thinking that putting all this in place might take time (and extra costs maybe). And since the program keeps running meanwhile, it could actually flip the outcome a bit when those changes finally roll out.

[Money]

I agree. I think letting phase 2 finish its cycle makes the most sense while the initiative is revisited.

[Kaf_StableLab]

Thanks @forexus, @LAD, @Jaf and @Money for your comments, all excellent points.

Only Phase 1 rewards were actually funded on-chain through RRC-45. Those emissions will continue to stream automatically until the remaining rewards are fully distributed. However, no funds have been added for Phase 2 yet, which means the DAO still has full flexibility to pause or redesign the program before committing any additional rewards.

Given the current data, with higher-than-intended APRs, limited growth in participation, and sufficient budget remaining, it seems reasonable to pause and reassess the incentive structure before proceeding with another phase.

If there’s general agreement from delegates and contributors, the next step would be to put up a short proposal to formalize that pause and outline parameters for a potential redesign later on.

This would prevent unnecessary emissions while giving the DAO space to recalibrate the staking model around governance participation and long-term sustainability.

[Money]

One thing to ponder is if there is value in maintaining some sort of Phase two staking even if at a lower set rate to continue to maintain staked tokens and prevent a selloff cause by halting program suddenly for a pivot?

[Kaf_StableLab]

Good point, definitely something to keep in mind as we figure out the next steps.

[GozmanGonzalez4]

I went through the report, and one thing that really stands out is how familiar this pattern feels if you’ve lived through other DAO migrations. The early rush, the inflated APR because the pool isn’t yet saturated, the strong retention from the initial believers, and then that slow, quiet plateau when the excitement wears off and the people who haven’t moved yet need more than numbers to finally take the step.

The overshoot on APR didn’t surprise me at all. Whenever a programme sets emissions assuming a target TVL, reality almost never matches that straight line. We saw the same thing back in the early veRARI days: the people who show up on day one get a far higher return than the model intended because the rest of the cohort arrives late or never arrives at all. And if the goal is to bring 300k over from mainnet, it’s obvious the current mechanics alone are not enough to push the rest across the bridge. People need frictionless guides, hand-holding and clear incentives that speak beyond APR.

What I actually found encouraging is the retention. You don’t get that kind of stickiness unless people see long-term value in the ecosystem, not just a farming opportunity. That’s something many DAOs miss, and it tells me the foundation laid on Rari Chain is already resonating with the folks who moved early.

Where I think the programme still needs a sharper edge is governance alignment. Right now the staking numbers look healthy, but the conversion rate between “staked” and “meaningfully participating” is still too shallow. If the DAO really wants this migration to be more than a technical shift, the incentives need to reward the behaviours that strengthen the chain: consistent delegation, turnout, and active governance.

A dynamic reward schedule would honestly save the DAO a lot of headaches. Fixed emissions are great on paper, but they create distorted APRs whenever participation doesn’t line up with projections. A flexible approach that responds to actual TVL would give everyone a more realistic view of returns and prevent these huge spikes that attract the wrong type of short-term capital.

In all, the programme clearly moved the needle, just not far enough yet. The momentum from June carried the chain through the first phase, but the next phase will need more intentional communication and smarter incentive shaping if the DAO hopes to reach that full 300k migration target. It’s a solid start though, and the data at least gives a clear direction for tightening the strategy.

[Money]

To follow up on this per our call, IMO we should honor our initial commitment, finish out this Phase 2 and plan out next steps while that wraps up.
I think we need to maintain clear communications to those who have staked ahead of time rather than after the fact. It’s keeps the integrity of the DAO unquestioned. And, demonstrates our willingness to adjust and change via planned out strategies.
Thanks @Anria for emphasizing the need to act on this. I think a change is needed, we just need to act on it in the best manner possible.