Simple Summary
To encourage more token holders to stake and to bring the unbonding_time in line with other ecosystems, we propose reducing the unbonding period to 21 days.
Abstract
This proposal aims to reduce the friction associated with staking DYDX by reducing the unbonding period from 30 days to 21 days.
The 21-day period was chosen in consideration of the trusting period of IBC-enabled chain, which was discussed in a separate forum post. The trusting period for IBC clients on counterparty chains is set at two-thirds of 30 days, equating to 20 days. This trusting period determines how long an IBC client accepts proofs from a counterparty chain as valid without requiring continuous verification. To ensure security and prevent issues such as double-spending and state divergence, it is important that the unbonding period aligns with these constraints. Setting the unbonding period to 21 days ensures sufficient security while still improving staking flexibility.
Motivation & Rationale
The percentage of staked DYDX has been decreasing, reducing overall network participation and security. Since the changes in protocol revenue distribution were implemented, more holders have opted to keep their DYDX liquid rather than staked, possibly due to concerns about long lock-up periods. Other Cosmos-based chains with higher bonded ratio, such as Cosmos Hub (~57%) and Osmosis (~45%) have a 21-day unbonding period, indicating that this duration effectively balances staking flexibility and network security. We aim to reduce some of the friction associated with staking DYDX by reducing the unbonding period from 30 days to 21 days.
Specification
We propose updating the unbonding_time parameter on the dYdX Chain to 504h0m0s (21 days).
Next Steps
We invite community members to review this proposal. If there is no strong objection, we plan to submit the on-chain proposal on Thursday, February 27, 2025.