PNG staking with USDT dividends

I’ve seen a lot of posts concerning the problems with price drops of PNG. The drop is caused because emission rates are high and because there is currently no unique financial use case for PNG. Staking has been proposed but with dividends in more PNG, which in my opinion is circular in structure and frankly, a little silly.

I propose to encourage staking of PNG by paying out dividends in USDT. In my opinion using USDT as dividends is better to stabilize the price because, if the USDT dividends are at a steady rate, it allows for the calculation of % dividend in USD and calculation of fair value of PNG. If the price of PNG drops, the dividends in USDT would become higher which would encourage buying of PNG and staking.

The USDT can come from using a small amount of the trading fees from all pairs. If I understand it correctly trading fees are at 0.3% of which 0.05% has been reserved for possible alternative usage.
I propose to start out with using 1/30th (0.01%) of all trading fees for PNG staking rewards and see how that goes. This small amount doesn’t impact trading fee rewards for LPs much and creates incentive for staking PNG and also incentive for PNG holders to increase swap volume. If it works correctly than increasing swap volume would directly increase staking dividends and PNG price.

I also would propose a dividend vesting period of, say, 7 days to discourage frequent changes in staking. In such a scheme, USDT can be withdrawn after 7 days of vesting. And PNG staking withdrawals would lose the USDT dividends from the previous 7 days. Those lost dividends could be added back to the overall dividend pool.

If the dividends do not encourage much staking than the % could be increased up to the max of 0.05% but it is probably best to start out small. If the overall platform swap volume increase even that small percentage should provide a very healthy dividend.

I like the idea of staking PNG, but I actually would prefer the reward in PNG.

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You can buy new PNG with earned USDT. The upside is that if the price drops you can buy more PNG.

But It is the same the other way around :smiley: You can buy USDT with the PNG, and if PNG goes up (what we hope and assume) you can buy more USDT :wink:

The price is not likely to go up with 175k new tokens every day and no real use case.
In case of rewards in PNG, if the price drops both the value of the stake and the value of the rewards go down. It’s a vicious circle.
In case of rewards in USDT, the rewards will counteract a price drop because the value of the rewards remains the same.

where does the USDT originate from?

From the total trading fees from all pairs. According to the Lite paper up to 1/6 of the trading fees is available for other use besides paying the liquidity providers, such as paying for marketing, developers, etc. I propose to use part of it to reward PNG stakers. It has to be put up for a vote.

in that case no, this 1/6th is meant for other stuff. building more tools and ongoing development on the dex

The Lite paper doesn’t specify what the funds could be used for:

“The community will also have the ability to enable the Pangolin fee switch. This fee switch can divert .05% of all swap fees to a designated address. Swap fees will remain fixed at .30%, but liquidity providers will only receive at most .25% of these fees. This provides the community with the opportunity to acquire extra funds to support any significant community initiatives. The Pangolin fee switch is subject to a 90-day timelock delay and is disabled by default.”