Liquid staking for $ENS

[estmcmxci]

@nick.eth

I like the idea of locking tokens for increased voting power (and potentially, for staking rewards)

Wild Card Idea : Why not create an ENS economy by introducing an internal currency? This currency could be used for ENS-specific purposes, such as discounts on domain registrations and renewals, or for other resources valuable to builders. Delegates could lock their tokens and, in return, receive an increase in voting power. The DAO wallet would match their locked ENS tokens with a proportionate amount of the internal currency. Additionally, staking rewards and yields could be paid out in this internal currency.

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@dennison

Basically token holders are faced with the choice:

“Hold the token, vote, and get nothing”

Who are these rational actors? When you hold ENS, you have a right to participate in the governance of ENS DAO. That’s not “nothing”.

@dennison

Correct, would it be productive to instead think of this of paying active token holders for the act of governance?

Maybe… in an internal currency though.

@dennison

(I’ll punt the convo for what counts as active participation for now)

Actually, I think it’s more important for us to first define what being an ‘effective delegate’ means: what delegate activity is considered valuable to the ENS DAO? (Props to @jengajojo for posing this question during the Meta-Governance Working Group call.)

@dennison

We believe that DAO tokens today, as they are purely “governance tokens” are valued in the market based upon a speculative premium that itself is based on the assumption that one day the DAO will return value to the token holders.

That’s an interesting point. So, essentially, the only reason anyone would want to participate in the governance of ENS DAO long-term is to cash out? Alright, I guess people are entitled to do that and might as well, but why can’t we think of a way to make it more worthwhile to hold onto ENS as a governance token than to sell it for liquid currency? Is the only solution a financial one, or can we think of a more ingenious one?

@dennison

Token holders who were once delegating are leaving ENS, and a significant share are moving their tokens to exchanges for sale.

How many of those token holders are ‘effective’ and value-aligned delegates?

@dennison

as we can expect delegated votes to continue to fall

Why so pessimistic? We have barely begun to discuss—perhaps we will come up with an elegant solution that seeks to identify and reward delegate activity, such as @AvsA’s ENS matching proposal.

@dennison

Sorry if this seems to have hijacked your thread, happy to move it elsewhere.

This has been great, thank you.