Proposed by Tamashi ( @tamashi_papa )
If you undelegate LUNC you are currently staking, It will be locked for 21 days. This option provides you an extra choice other than 21 days. The options are “21 days, 14 days, 7 days”. The initial state is still locked for 21 days. steker pay USTC to choose 14 days or 7 days. All paid USTC will be burned.
By creating The options the hurdles to stake can be lowered and the staking rate can be expected to improve. This proposal will increase demand for both LUNC and USTC. USTC is burned so it helps repeg.
Shortening the lock period (Shorten)
We can choose the lock period, but that can only before pressing the undelegate button.
A normal undelegation has a lock period for 21 days, but you can select (shorten) the lock period by using the “Shorten button”.
We can shorten the lock by any amount of LUNC and select the amount of LUNC to shorten.
After 7 days are selected and once payment is completed, it is not possible to select 14 days.
This is the UI image and operatabilities look like below.
USTC amount required for payment
Select 14 days: USTC amount required for payment is “equivalent to 3% of total LUNC entered for period change”
Select 7 days: USTC amount required for payment is “equivalent to 6% of total LUNC entered for period change”
The calculation standard is “(21×2)/14=3” and “(21×2)/7=6”
If you want to reduce the lock period of $100 worth of LUNC to 14 days, you pay $3 worth of USTC.
If you want to reduce the lock period of $100 worth of LUNC to 7 days, you pay $6 worth of USTC
Some people may be concerned that these 3% and 6% payments are too high, but think about it. If you don’t want to pay, you don’t have to pay. If you do not pay, it will be locked for 21 days after undelegation, and nothing will change from the current situation.
The current staking rate is about 20% APR for LUNC and USTC combined. A 3% payment is equivalent to 1.8 months, and a 6% payment is equivalent to 3.6 months, even if we shorten the lock period for all staked LUNCs. Paying with staking rewards is also quite possible. It is similar to the staking method where the interest rate of the reward changes depending on the period. However, the longer the staking period, the “relatively” cheaper the payment.
This proposal would help adding USTC burning mechanism to the infrastructure of the chain.