P3 - WCT Staking Redesign

Abstract

Perpetual Stake with User-Triggered Unlocking & Discrete Duration Options

Summary

We propose a redesign of the WCT staking mechanism to simplify usage, improve reward predictability, and provide greater flexibility to users. This includes the introduction of Perpetual Staking Positions with User-Triggered Unlocking Periods, a set of discrete duration options for creating positions, and preserved support for the current decaying model as an optional path.

Current Implementation

This chart visualizes the current staking mechanism, where two positions—Position A (12-month duration) and Position B (6-month duration)—are created simultaneously at T₀. Upon creation, both positions immediately enter their respective unstake periods. From that point forward, their stake weight begins to decrease gradually each week until it reaches zero, at which time the position becomes unlocked.

The unlock timing is determined solely by the duration set at creation: Position B unlocks at T₀ + 6 months, while Position A unlocks at T₀ + 12 months. As shown in the chart, Position B maintains a consistently lower stake weight than Position A throughout its lifecycle, reflecting the shorter commitment period.

Proposed Improvement

The chart compares two staking positions initiated simultaneously: one with a 6-month unlock period and the other with a 12-month unlock period. Both positions are unstaked at the same time. Throughout the staking lifecycle, the chart illustrates that the stake weight of the 6-month position remains consistently lower than that of the 12-month position. Additionally, it highlights that the 6-month position becomes fully unlocked 6 months earlier than the 12-month position, emphasizing the trade-off between shorter commitment and reduced stake weight.

Background

The current WCT staking model presents several pain points:

• Stakeweight Decay from Day One: Stakeweight starts decaying immediately after a position is created, reducing user incentives over time.
• Maintenance Overhead: To maintain maximum stakeweight, users must frequently update staking positions.
• Reward Complexity: Decay-based rewards make it difficult to calculate expected yields without specialized tools or knowledge.
• Over-flexible Duration Input: Users currently must select a precise duration between 1–104 weeks, which complicates the staking decision-making process.

Proposal

1. Perpetual Staking Positions

• Users can stake WCT into perpetual positions that do not decay over time, maintaining full stakeweight until the user chooses to unstake.
• These positions remain active and productive indefinitely, offering a "set-and-forget" staking experience.

2. User-Triggered Unlocking Period

• Users can initiate an unlocking period whenever they decide to exit their position.
• Upon triggering, the stakeweight will decay linearly over the selected unlocking duration, at the end of which the position becomes fully withdrawable.

3. Discrete Duration Options

To simplify both position creation and exit logic, we propose replacing the flexible duration model (any value between 1–104 weeks) with a curated set of predefined options:

• 4 weeks (≈ 1 month)
• 8 weeks (≈ 2 months)
• 12 weeks (≈ 3 months)
• 26 weeks (6 months)
• 52 weeks (12 months)
• 78 weeks (18 months)
• 104 weeks (24 months)

These discrete values provide consistency and clarity, enabling users to better understand the impact of their staking choices and compare rewards across options.

4. Preserving Optionality

While the new model simplifies and enhances staking for the majority, we recognize that some users may prefer the original behavior (i.e. decay starting from position creation). To respect this:

• Users will still be able to immediately initiate the unlocking period upon staking, mimicking the existing flow.
• This ensures full backward compatibility and user choice, making the staking system more inclusive and customizable.

5. Migration Path

In order to ensure that this staking redesign does not impact existing staking positions we will be treating these staking positions as already unlocking therefore they will not be become perpetual as the staking contract is updated. This way there isn’t any requirements from stakers to manage or update their positions so tokens will be unlocked as soon as the decay completes.

If any staker wishes to turn their staking position to perpetual staking then they have the possibility to re-stake after the contract is updated which will cancel their current unlocking period. Afterwards they will need to initiate the new unlocking period that will begin decaying again.

Redesign Benefits

• Simplified UX: Clearer options and no forced updates reduce friction for less experienced users.
• Constant Stakeweight: Eliminates unnecessary reward decay until users are ready to exit.
• Flexible Exits: Unlocking periods remain customizable with fixed durations and predictable timelines.
• Backwards Compatible: Advanced users retain access to current decaying mechanics if preferred.

Implementation Considerations

• Smart Contract Updates:
  • Enable creation of perpetual positions.
  • Introduce user-triggered unlocking with fixed duration choices.
  • Maintain support for initiating the unlock period at the time of staking.
• Frontend Enhancements:
  • Update UI to clearly present perpetual vs. unlocking state.
  • Add dropdown selectors for the predefined durations.
  • Visualize estimated rewards and unlocking timelines.

Call to Action

We encourage all stakeholders to participate in the upcoming vote and share their thoughts on this redesigned staking model, which aims to improve staking experience.

Next Steps

1. Protocol team to review and scope smart contract changes.
2. UX team to design updated staking flows with new model.
3. Initiate onchain vote and broad communication campaign.

References

1. Whitepaper: https://whitepaper.walletconnect.network
2. Staking Portal: https://staking.walletconnect.network
3. Token Upgrades: https://governance.walletconnect.network/t/network-token-upgrades/28