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HIP 124: Securing IOT Governance Through Staking Rewards

Summary

This Helium Improvement Proposal (HIP) aims to increase voting turnout. It suggests to achieve this goal indirectly by paying rewards for locking IOT, thus reducing the cost of acquiring voting power (veIOT).

Motivation

The primary motivation behind this proposal is to increase the overall utility of the IOT token and foster greater participation in the network's governance processes. Presently, many IOT holders lack the incentive to engage in voting, resulting in low voter turnout. By rewarding users for staking their tokens, we aim to encourage more individuals to actively participate in governance as they have locked positions to vote with, thereby strengthening the network's resilience against potential attacks during periods of low participation.

Stakeholders

All current and future veIOT holders, as well as IOT holders, are stakeholders in this proposal. By incentivizing staking, the proposal benefits those who lock IOT while also promoting the long-term health and stability of the network.

Detailed Explanation

  1. Emissions Apportionment:

    • Allocate 4% of IOT emissions to staking rewards for veIOT. This allocation will be sourced from the reward bucket assigned to Oracles in HIP-52, which is currently not utilised.
    • Post the implementation of decentralized Oracles, this allocation will revert to Oracle rewards, providing veIOT holders with the opportunity to earn rewards by staking to Oracles as specified in HIP-52.

  2. Existing lockups:

    • All existing lockups stay as is. Functions for unlocking, locking, choosing decaying/constant, vote weight and unlocking remain the same.

Drawbacks

  • Although this proposal aims to increase the amount of locked IOT, there's a risk that IOT holders may lock tokens solely to earn rewards without actively participating in the voting process. This could potentially lead to an increase in locked tokens without a corresponding rise in voting activity.
  • Rewards emitted daily to veIOT holders will contribute to the dilution of the IOT supply. While this may pose a challenge, the benefits of increased voting participation are anticipated to outweigh the disadvantages of increased supply.

Rationale and Alternatives

No Alternatives proposed.

Unresolved Questions

None at this time.

Deployment Impact

Total daily IOT emissions will increase by the amount of rewards emitted to veIOT holders.

Existing veIOT Stakers

Current veIOT stakers will start to receive rewards for their lockups, and can decay/unlock their positions as normal.

Documentation Updates

Documentation regarding staking with Helium Vote will need to be updated to reflect that staking IOT now earns rewards.

https://docs.helium.com/governance/staking-with-helium-vote/

User Impact

Users who choose to stake IOT will now have the opportunity to earn rewards from their staked tokens.

Success Metrics

  • This HIP will be considered successful if more IOT tokens are locked and used for voting.