[UNFI Staking] Should there be an increase in the maximum amount of UNFI that can be staked?

UNFI holders can help manage tokenomics and influence the APR from staking rewards.

Background

UNFI staking on Ethereum began on January 1, 2021. At the time, a maximum of 500,000 spots were available for UNFI holders to stake. It did not take very long until all spots were taken. This locked a significant portion of UNFI’s circulating supply into staking.

UNFI staking was designed so that as it reached maximum capacity, the APR on staking was higher for all stakers. Initially, ~40% APR was offered at maximum UNFI staking capacity. UNFI referendums had not yet been launched. So Unifi responded to social media requests for an increase in the maximum UNFI staking capacity. In April 2021, the maximum staking capacity was raised to 600,000 staking spots. The APR at maximum staking capacity was also adjusted to ~36%.

Points of consideration

Over the last few months, UNFI staking has routinely been full. Unifi consistently receives many requests from the Unifi Community on social media to increase the staking maximum.

In late September 2021, Sesameseed will be completing the SEED to UNFI and UP conversation This will include a distribution of the UNFI that had been locked in SEED’s redeem value. This SEED to UNFI and UP conversion process was overwhelmingly approved by UNFI holders in a prior referendum. As UNFI from that process is distributed, increasing staking capacity will present any new UNFI holders deliberating over what to do with their tokens with the more preferable option to participate in staking.

Current stakers may also be able to compound their rewards as a result of the increased capacity. Compounding allows UNFI stakers to earn a higher APR than the simple APR displayed on the dashboard.

Based on the above information, Unifi is seeking guidance from UNFI community governance on the matter of increasing the maximum capacity of UNFI staking. If this referendum is approved by UNFI holders, Unifi will create another multiple choice staking referendum. In that referendum, UNFI holders will select the new increased maximum capacity for UNFI staking.

Referendum Question

Should there be an increase in the maximum allowable amount of UNFI that can be staked?

Yes - Open more spots for staking!

No - Do not change the UNFI staking maximum