Pause the staking reward program for stkIDLE holders

The following is an extract of the proposal posted on the Idle governance forum and focuses specifically on one of the proposals listed.

Summary

A proposal to pause the staking reward program for stkIDLE holders.

Proposal

1. Pause the staking reward program for stkIDLE holders

Currently, stakers are rewarded with a mechanism that distributes half of the fees generated (in IDLE) by the Senior Best Yield strategy. This mechanism has given a value-capturing feature to IDLE tokens, but on the other hand, it has fallen short of sustaining the token price through the buyback mechanism setup.

Since January 2021, Idle is distributing $IDLE rewards to stakers with IIP-10. Based on @8bitporkchop’s work on $IDLE staking, the protocol fees have been split as follows

• 50% to Idle’s stakers
• 30% to the Idle’s Rebalancer
• 10% to the Fee Treasury
• 10% to the Smart Treasury

With IIP-18 of January 2022, Idle DAO voted to deprecate Idle Smart Treasury and increase the percentage of fees flowing to the Fee Treasury. The January 2022 split currently in place is

• 50% to Idle’s stakers
• 30% to Idle’s Rebalancer
• 20% to the DAO Treasury

We should also note that the fee-sharing contract is immutable and based on Sushiswap v2, which has no liquidity, hence buying IDLE there, is sub-optimal due to high slippage costs.

Additionally, due to regulatory uncertainty, the current staking rewards do not align with the not-for-profit structure of the soon-to-be Idle DAO LLC, thereby increasing the complexity.

For the above reasons, Leagues suggest pausing the current staking rewards and instead, introducing new use cases for IDLE stakers.