We, Crypto Learning Club, stand opposed to the delegation of the community’s treasury through an external liquid staking provider, as it threatens the long-term prosperity of dYdX.
Even though we initially backed Proposal#44, upon reflection, we have decided to oppose both Proposal#47 and Proposal#49.
Delegating the community’s treasury through a liquid staking provider leads to a reduction in the Annual Percentage Rate (APR) for currently staking users. This arrangement favors only the liquid staking provider and certain validators selected to receive stakes from the LSP, raising significant concerns:
1. The decrease in APR may diminish the attractiveness of dYdX tokens, making it more difficult to attract new stakers.
2. It could create a sense of inequality among validators.
To ensure dYdX’s long-term growth, it is essential to boost the number of active traders and increase the token’s value.
Yet, reducing the APR for stakers to temporarily increase validators’ fees does not serve the community’s best interests. Validators should see their profits rise with the growth in transaction fees as the trader base expands substantially.
Moreover, validators not chosen by the LSP encounter discord due to the absence of delegations, potentially leading to conflict. A united effort among validators to maintain the chain is much preferred.
While we do not oppose the concept of Liquid Staking, leveraging the “Community Pool” for such purposes is problematic. It is imprudent to implement changes that do not benefit the traders/stakers.
Presently, it appears that validators and the LSP are prioritizing their interests. We need to reconsider from the perspective of contributing to the long-term development of dYdX and its users.
Admittedly, there may be security enhancements as a result of this delegation, but we believe that the negatives far outweigh any possible positives.
Additionally, at the time of the initial post, we anticipated the APR to drop from 21.32% to 18%, but dYdX’s trading volume is heavily influenced by market conditions and has yet to stabilize.
Currently, this month’s APR stands at 18.85% (dipping to a mere 13.17% this week!).
Considering that staking 20M dYdX from the treasury could consistently lower the APR by 2-3%, this change is hardly beneficial for stakers.
With less than five months since the release of v4, we suggest starting with a smaller amount experimentally or waiting until the platform’s growth stabilizes before making such a significant change.