tldr: ICON is on the verge of releasing its interoperability product, for ICON to have great network effect, it should attract strong liquidity. At the same time, ICON has a high number of staking, many of which seem to be ‘sleepers’ and not engaged, this proposed method, will incentivise the three important components; Interoperability, Staking and Engagement (for ICON).
DPOS is a voting model that involves Staking rewards as an incentive for users to stake their tokens in return for voting for nodes to act in correctness. After a certain amount of stake is voted by the community, for example 51%, the network is deemed to be secure and therefore, the rewards distrbitued can negatively outweigh the demand for security on the chain.
Additionally, ICON lacks any mechanism to reward ‘engaged’ users over ‘sleeper’ users, as voters/stakers are still rewarded if they are staked/voting to a node that has been turned off for years. Also stakers are rewarded if a node has no bond.
Promoting ICON as an interoeprability hub
The best way to promote ICON as an interoperability hub is by incentives. Although BTP will give interoperability several usecases such as Arbitrary Call Service, this does not guarantee a long-last network effect, that is because no value is necessarily built up for a user to ‘bound’ to stay there. Dapps can switch to future solutions. On the other hand, ‘trapping’ value on the ICON chain will give BTP and ICON a better footholding as an interoperability strong hold.
Proposal
To promote; staking, engagement and interoperability. I propose we redirect part of the staking rewards (eg. 10%) to liquidity pools that bond sICX (staked ICX) with - only strong cryptocurrencies - eth and btc. eg.
sICX - ETH
sICX - BTC
this would enocurage the use of ICON as an interoperability hub, promote BTP assets, staking.
This can be done through two ways:
- A seperate dapp that incentivises these pairs
OR
- Incentives are sent to existing DEX’s on ICON that enable sICX-ETH and sICX-BTC pairs.
This will be voted on by the community.
As a result of this, staking $ICX, interoperability, BTP assets and engagement will enhance in the ICON ecosystem. It will also help allieviate the use of Market Makers as it enhances engagement and usecase for the product. Similarly, more arb opportunities by the most used tokens and most valuable tokens will open up for the sICX token.