I wonder whether bringing locked staking could help Mina Protocol to have better tokenomics without changing much.
I am sure everyone agrees on the benefits of soft staking. It’s a good incentive for the investors to stay in MP, it creates a positive social perception and also sometimes results in free advertisement (coming on top of staking lists). Yet, it comes with some disadvantages as well. The most obvious is, soft staking doesn’t convince the market participants that the staked supply will remain still if the price surges. Therefore, high staking rate might be looking like a masquerade ball to some. This alone is repressing the token price quite a lot, imho.
Should MP introduce locked staking, I bet a big portion of the existing investors would take that deal (just like the ETH staking craze) as the community truly believes in the future of MP. This would reduce the de facto circulating supply immensely and give confidence to the market.
Those who lock their tokens won’t only be expecting a staking reward but also (and much more importantly) a right to participate in the airdrops, ICO’s and IDO’s of the projects that will be built on MP. Even an equation like “the longer&more the tokens locked, the higher the priority you get in the aforementioned projects” could be drawn.
If I am not completely mistaken, market participants really like projects where some of the once-freely-circulating supply is being locked (not the early investors’ and team members’ locked tokens) by their holders purely for their faith in the project. It creates a strong conviction and leads to more adoption.
Note: Most of the text above was originally written as a response to Evan’s post on a similar topic. As I think locked staking deserves to be discussed in more detail, I opened this topic with basically the same arguments I used there.