The DAO: Is it worth changing our vesting periods?
We’re excited to share that our DAO voting phase has commenced. Your active involvement has always and always will play a vital role in shaping the future of the Synapse Network. Before you make your vote, let’s delve into the specifics of the second question presented to our community members.
Our premise
After asking the first question in our DAO, we suggested that after the migration of the tokens to a new network, we should reduce the vesting periods to 50% of the time corresponding to the remaining time in staking. However, this proposal was met with different opinions from our community, whose preferences are extremely important to us.
The proposal was based on the fact that we wanted to ensure full transparency for all users of our platform and thus allow them to shorten the staking period alongside a series of changes that will take place on our platform to make this transition both painless and profitable (such as our previously discussed network change, for example).
Moreover, the DAO’s second question was about changing the staking model to prevent increasing token inflation and to provide a more transparent staking model. As we wrote in that article, the proposed changes are a response to current market trends and are a way for us to prepare a solid foundation for the upcoming bull market, with the provision of transparent staking rules understandable to both existing and new community members.
Since the community has expressed its approval of both the first DAO questions:
Are you in favor of introducing the $SNP token to a different, currently popular network and discontinuing the cross-chain token model? For example, Base, ZkSync, Polygon 2.0, or something else 🙂
As well as the second:
Are you in favor of stopping the growing supply of $SNP tokens by changing the current staking model and simplifying the entire staking path?
We would like to know your opinion on the vesting period’s possible changes and propose some solutions that in the end might be even healthier for the entire project ecosystem than what we had planned.
We are also looking to take another step towards the deflation of Synapse’s token, with the added bonus of having our solution come directly from the Synapse Network community initiative, thus solidifying our commitment towards full transparency and communal decision-making.
The question
Are you in favor of keeping the current (i.e., not shortened) vesting periods after the transition to the new network?
Due to the numerous voices circulating in the community regarding the maintenance of the currently remaining staking times after the transition to the new network, we decided to put this aspect of our DAO revolution to the community’s vote.
The solution proposed in the question is to maintain the current staking times after the transition to the new network and change it to the vesting periods needed to be able to claim the Synapse Network token.
This means that $SNP tokens currently locked in staking would be claimable based on linear vesting in the same timeframe as the end of the staking at the time of the transition to the new network.
In this case, tokens currently locked in staking would be locked in linear vesting after transiting to the new network.
Moreover, each user would see two vesting paths:
- One with the tokens they previously held in staking, where linear vesting would correspond to the length of time remaining in staking
- A second linear vesting with staking rewards, which would begin once the pool of tokens from the staking is fully released
In this case, staking awards would be counted as follows:
- Staking rewards earned up to the snapshot date according to the selected staking path
- Staking rewards according to the new staking path corresponding to the time remaining until the staking should be completed based on the initial date
This means that each user would get the full pool of staking rewards, but from the day of the snapshot, the rewards would be calculated according to the new staking.
We believe that this solution will allow us to be fully transparent, and ensure that all stakers receive the staking rewards they have earned while getting users used to navigating the new staking solutions in a clear and orderly manner.
What if I vote for this change?
Let’s use a simple example to better explain what will happen if you vote for this change. Please bear in mind that this is just an example and the data is just exemplary.
Joe put 100,000 $SNP in the 36-month Staking pools within the Periodic Tier on the day we announced the staking solution.
The snapshot took place on the 1st of December 2023.
Tokens locked in linear vesting after the change: 100 000 $SNP
Time of linear vesting: the remaining time till the end of the staking, in this example: 15 months
Tokens locked in linear vesting based on staking rewards calculated according to the old staking rewards: 350 000 $SNP
Time of linear vesting for staking rewards: ⅓ of the initial staking schedule, in this case: 12 months
Staking rewards locked in the vesting pools based on remaining time till the end of the vesting period: 12 500 $SNP
On what basis will the staking rewards APR be calculated in vesting corresponding to the old staking method?
The % of APR that will be awarded in vesting for staking awards will be equivalent to the initial staking period.
This means that if a user’s initial staking period was 36 months, the APR from post-migration awards will be 10%.
What is more, the vesting time for staking rewards will correspond to 1/3 of the initial staking period. It means that if your initial staking time was 36 months, your vesting period for staking rewards will remain 12 months. [36 x ⅓ ]
Let’s put an example here:
Joe staked 100,000 $SNP tokens on the 1st of March 2022 using 36 months Periodic Tier. The snapshot took place on the 1st of December 2023. The remaining time till the end of the staking is 16 months.
Therefore, he will get:
- 100 000 $SNP locked in linear vesting
- 350 000 $SNP in staking awards based on the old staking, locked in linear vesting with the cliff that will be equivalent to the vesting for tokens from staking
- 12 500 $SNP staking awards based on the new staking
All those tokens will be locked till the end of the vesting period of the tokens that were put in the staking and will be distributed in the linear vesting once the staking tokens vesting period is fully over.
The total amount of tokens you will get: 462 500 $SNP
Time for a full token unlock: 27 months
Okay, so what will the vesting period look like?
- 100 000 $SNP linear vesting in 15 months [approx 455 days]: approx 219.7 $SNP unlocked daily
Staking rewards (total):
- After 455 days: 350 000 $SNP [100 000 $SNP x 21 months x 200% APR] based on the old staking rewards put in the 12-month vesting period: approx. 958.90 $SNP daily
- Also after 455 days: 12 500 $SNP [100 000 $SNP x 15 months x 10% APR] based on the new staking: approx. 34.20 $SNP daily
- It means, that after the end of the staked tokens vesting, you will get the total amount of 362 500 $SNP in the vesting schedule according to the ⅓ of your initial staking time.
What if I vote against this change?
Then, our initial proposal showcased in the initial DAO vote will proceed.
In this case, the vesting period will be reduced to the half of remaining staking time, but not less than 3 months. In this case, you will get the staking rewards based on your initial staking, but without the remaining time after the token migration.
How will it look in practice? Let’s take an example:
Joe put 100,000 $SNP in the 36-month staking pools within the Periodic Tier on the day we announced the staking solution.
The snapshot took place on the 1st of December 2023.
Tokens locked in linear vesting after the change: 100 000 $SNP
Time of linear vesting: the remaining time till the end of the staking, in this example: 7.5 months
Tokens locked in linear vesting based on staking rewards calculated according to the old staking rewards: 350 000 $SNP
Time of linear vesting for staking rewards: ⅓ of the initial staking schedule, in this case: 12 months
Staking rewards locked in the vesting pools based on remaining time till the end of the vesting period: 0 $SNP
Total amount of tokens you will get: 450 000 $SNP
Time for full token unlock: 19.5 months
How will the allocations be calculated?
Allocations for upcoming sales will be calculated based on the tokens you currently have in our vesting pols and have not claimed yet, as well as those you have already claimed and put on the new staking pools.
This means that nothing will change for you in your daily use and you will be able to continue to invest on our platform without difficulty.
However, it is worth noting that the SNP Power needed to calculate the allocation due will already be calculated based on the new staking, while also taking into account the tokens previously held.
Initial schedule
The voting period starts today and will run until 25.11.2023, 5PM UTC.
Your participation is crucial, and we remind you to carefully read our questions before you cast out your vote.
How many DAO tokens do you have to cast your vote?
Check the snapshot info here
Tokens were distributed directly to your wallets on 27th of October.
Your Vote Shapes Our Path
Your participation in this DAO voting process is vital in shaping the future of the Synapse Network. Don’t miss this opportunity to make your voice heard and contribute to our continued growth.
If you would like to get some more information about the DAO questions, check out our official Telegram channel.
About Synapse Network
Synapse Network is developing a cross-chain investment and start-up acceleration ecosystem based on blockchain technology to give everybody an equal chance to contribute to great upcoming projects and to do so early on. We are bridging the gap between the traditional & crypto market. The idea of the Synapse Network technology goes beyond the standard offer of launchpads available on the market, becoming a true technological brand providing tech solutions.
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