Staking Rewards Idea/ proposal for the future of Mina

MIPs (Mina Improvement Proposals)
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This is a part continuation from the discussion here around staking rewards.
https://forums.minaprotocol.com/t/tokenomics-review-and-recommendation-introduction-of-token-locking-and-treasury-funding-for-mina/6543/79

MY BACKGROUND
I have been involved with Mina in many areas from almost the very beginning, mostly as a community leader and zkIgnite participant and several Mina Foundation funded proposals. I run zkok.io @minacryptcom twitter account and previously ran minacrypto.com.

It is important to note that my understanding of Mina’s mechanisnm is fairly limited and it is a reaction from the Tokenomics report by Economic Design which I feel from a technical perspective may be sensible, from a marketing perspective is the exact opposite of what is needed to change the current widespread negative perception.

WHAT I WOULD LIKE
It would be great to get feedback on this idea from a technical and non technical perspective.

BASIC PROPOSAL
Remove all staking rewards for people who are not running a node.

PURPOSE
To reduce supply and reverse negative sentiment

LOGIC
Right now Mina is in a negative spiral of increased supply and lower price. The current APR and additional Mina for long term holders is becoming increasingly irrelavant in this environment.

I am sure if you asked the average holder if they would like 100 Mina at $1 per Mina ($150) or 150 Mina at 50c per Mina ($50) they would opt for the former.

By creating a much lower supply the idea is to motivate holders to stake their Mina and reverse the negative spiral that is currently happening. They could see Mina as a better store of value

From a marketing perspective reducing supply is a very powerful tool and could bring old holders back to Mina and new investors interested in its potential. It also gives way to new discussions and a chance for many marketing opportunities.

OPINIONS WANTED - TECHNICAL PERSPECTIVES
What are the potential negative aspects to this from a technical perspective?
Is it possible to do?
What would be the security implications?
How does this affect a treasury for the foundation (could a % be allocated to fund this)?

OPINIONS WANTED - COMMUNITY PERSPECTIVES
I realise this idea takes a mental jump
Do you think this is a good idea?
Would you be happy with less Mina overall, but a potential price rebound on what you have?
Do you think this would make Mina more attractive to new holders?
Any other thoughts / ideas?

Mina needs new ideas and direction in order to be saved from obscurity. Please leave your feedback (good or bad). A hard fork is coming and the Community has the power to make things better.

THANKS!!
@hgedia @Trivo @bkase @lamps @AustinBaggio @DFST @dannywillems @Ducca
@EmreNOP

2 Likes
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Add you guys here
@Atombob @yAntPower @Philipp @45930 @garethtdavies @chrlyz @crackerli @mrrphy @Marc2234 :backhand_index_pointing_up:

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@mrcnk @masha.m @Joaquin @Demigeek @EmrePiconbello :backhand_index_pointing_up: :backhand_index_pointing_up:

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Are you suggesting removing the ability to delegate MINA?

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Really it’s just a starting point for debate, but no… People can stake as now,. They just don’t receive rewards.

It obviously takes a bit of a mental leap, but it could be true that the reduction in supply and potential price increase from good marketing and a shift in perspective could create a strong loyal community with a shared goal who would stake anyway.

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I’m not sure this would have it’s intended outcome. There is no delegation in Ethereum for example, so I would expect it would devolve into liquid staking tokens stMINA (see Lido, RocketPool etc…) if economically viable.

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Thanks for your feedback Gareth, assists great to hear your perspective.

Do you have any other ideas that could reset the current negative sentiment, price decline and increased supply? I think Mina needs something radical.

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I strongly believe it’s a demand side issue not a supply side one. Real adoption needs real utility.

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Yeah agree 100% but in the meantime i feel we have to change the negative mentality around Mina with headline changes that can reverberate across the zk/crypto community.

I think the term right now is 'sleepwalking into oblivion ’

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People won’t just place bets. They have their own hopes and assumptions. In fact, this sentence contains your hopes and assumptions. It is unlikely that this proposal will have a positive impact on price.

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Thank’s for your comments.. Ok but let’s ask ourselves why are people staking now? The rewards could have been 400%+ in the last 6 months and you would still be down on your investment.

The price and ranking is falling, circulation is increasing, community sentiment is very low. There’s no magic bullet on the horizon. The current way isn’t working, changing the narrative could reignite interest and get Mina back on the front page until those much needed products are built.

I’m not sure this is exactly the right way but what are the alternatives?

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What we need on Mina is apps using Mina.
Without it the price will keep dropping in my opinion and that will happen both woth higher and lower staking rewards.

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Thanks Marc, i agree zkapps are needed too.

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Disclaimer: I work at o1Labs. Opinion is my own. Nothing in the post should be considered financial advice.

As a token holder, I would not opt in to reducing my own staking rewards. I value the accrual of staking rewards highly.

Personally, I don’t think it fits the Mina ethos to engineer a financial trick to get “back on the front page”. Also, removing supercharged rewards seemed to have no effect on token price previously, so idk why this proposal would be any different.

I do understand the urge to do something to improve morale, but I think it’s important to do the right things. Consider the following:

  1. o1Labs and MF are joining forces. It’s not yet clear to the community what the impact of this will be, but it’s a good thing. Both groups of people have historically worked very hard to make Mina great, but it’s been like a right and left hand operating independently. Together, we can work toward a shared goal. This will be the first time that one company has led the engineering and the marketing for Mina in a few years.
  2. o1Labs is working on Mina for the long term. As we announced today, we’re going to make Mina twice as fast if our MIP is approved. This is just a step towards a larger goal. We’re continuing to make the protocol more performant, making o1js more powerful, developing programmable cryptography tools. We literally show up to work every day and build Mina.
  3. Mina has a small but mighty community. I don’t want to be overly rosy about the current state, but how many of our peers in market cap have such an active community? You are motivated enough to be making proposals like this one. You’re chirping on all our socials to make us be more communicative. This works! Brandon has been tweeting a bit more lately, and he told us to make him continue. Look at the technical discussion on the MIP today. Gareth and DFST had technical feedback nearly immediately. Clearly there is something more than just price action keeping people around.

I don’t think we can fix any problems in our community by directly targeting token price or tokenomics. People came to our community in the first place for cutting edge technology. We were telling a story about radical inclusion, lowering barriers to entry for participation in the blockchain, creating a community where everyone has a voice. More recently, we’ve told a story about ZkApps. If sentiment is low, then I think it’s because we haven’t delivered on these stories. My take is: keep being a net contributor in the community. Keep making people feel like they belong here, building Mina with us. When o1Labs is not delivering on what we say we will do, call us out and hold us accountable. With that said, I don’t think changing the token emission rate will have any effect on sentiment.

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I have already mentioned this on X, and I’ll say it again, that coins and tokens, as well as other things, appreciate in price, when people see value in them.

If there is no value, there is no demand. Price drops. Everything is simple

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Thanks for your opinions, i really appreciate you taking the time to contribute. I want to respond, please don’t take these comments personally, I know how hard you work for this project and it is because of people like you that I still believe in Mina. I am saying them because i care so much.

As someone who talks to people in the Mina community on a daily basis I am really concerned that without serious action in the near future Mina will be finished as a credible project. I don’t say this lightly, It’s not so much sentiment is low, it’s more like people are just leaving the project and not coming back.

When you are an employee of MF or O1 you receive a pay check at the end of the month, but holders don’t have that luxury and it is easy to forget that Mina can be just a small part of someones life. When you have been watching your investment decrease dramatically over a long period would you still want to be part of it ?

Trading volumes are very very low, ranking has gone from around 50 to around 200. Brandon is tweeting occasionally, but where are the faces of Mina? The community is getting smaller and smaller and yes, there is still passion there, but what are the funding opportunities for devs now? What are the challenges in building a product with Mina? how many new people are finding Mina each month and getting involved?

New zk and crypto projects have excitement, airdrops, grants and momentum. Once someone has gone somewhere else, it is very difficult to get them back again.

Does a regular holder of Mina care now that O1 is handling the engineering and marketing again? Rightly or wrongly from an external perspective it looks like cost saving, a step back and that mistakes were made to separate in the first place. They are just looking at the price decrease, and see founding members leaving etc.

What does making Mina twice as fast mean to a non technical person? Actually, nothing. I know from a technical perspective what achievements have been made, but this is not a new project now and people are asking after 4-5 years where are the products and exciting projects they can use today?

I am not sure I agree that people are so excited about staking rewards.Why would they be when their investment is losing value every day?

Removing supercharged staking rewards didn’t have much of an effect as Mina was in a very different situation at that time.

From a holders perspective Mina has a few big problems

  1. People think the supply is too high.
  2. It has taken too long to achieve anything usable by a non technical person.
  3. The price is going lower and lower

I am not saying removing staking rewards is a magic bullet, but something dramatic is needed to change the optics and this could be a huge opportunity for the marketing departments to bring a whole new narrative to Mina that would be genuinely exciting to the entire zk / crypto space.

Eg. People stake with Mina because they really believe in the project.
Mina for the comnunity, by the community.. etc, etc.

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I respect your opinion and want to see the mina price rise as much as eveyone, but unless you have some other solution to insentiervise people to buy mina, no rewards for stakers is a bad idea.. What we need is a healthy ecosystem and Defi with liquid staking pools locked to obtain other tokens on Mina. Something similar to pancake swap on BNB and others. Then no staking rewards or a higher deduction in rewards might be feasible..

Also as a side note, I know mina offers more than other blockchains but I don’t see why we can’t follow the same path as other blockchains while we wait for the uniqueness of what mina and zk apps can offer.

Variety is the spice of life.. As they say

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Thanks for adding your thoughts.. I totally respect you opinion and agree about the healthy ecosystem, but i would say that we needed these things 18 months ago. Even now that ship isn’t on the near horizon.

Also who is going to build these projects?

This is just an idea and a start for action. What do you mean when you say we follow the path of other Blockchains?

I added this after :backhand_index_pointing_down:t3:

Can you give some reasons why you think removing staking rewards is a bad idea?

Ok, so some people might leave their tokens on the exchange, but if there is upward momentum then there’s a good chance a strong community will choose to support node operators and decentralisation.

This could also reignite their interest in the project and become involved in other areas.

I can understand the apprehension for staking providers (i am also one myself) but maybe something like this is the only way forward.

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I mean why add the complexity of zk.. To an dapp.. Granted I’m not expert but does a DEX actually need any zk elements.. Why can’t it just be a DEX and not a zk dex… Like other blockchains… Why does everything on Mina have to be a zkApp. Surely you can have a standard dApp. I’m sure there is a reason for this, if so I would very much appreciate it if someone could explain why?

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Thanks for the comments, i guess what makes Mina special is the way it uses zk in it’s consensus mechanism.