Temp Check: Halving Collator and KTON Staking Incentives for Treasury Sustainability

[hackfisher]

📝 Temp Check: Halving Collator and KTON Staking Incentives for Treasury Sustainability

📌 Background

As a follow-up to Proposal #22 Comments, it's time to address the long-term sustainability of the RingDAO Treasury.

Currently, all expenses — including Collator staking incentives, KTON staking incentives and other proposal expenses — are fully funded by the Treasury. Meanwhile, no new RING issuance is planned. Without adjustment, the Treasury will face increasing pressure and may be unable to support future ecosystem growth.

Both staking incentive programs have been running at current incentive level for around 6 years. During the early inflationary phase, this was necessary to bootstrap participation. However, now that RING has entered a deflationary phase, with no further issuance and a fixed Treasury reserve, such high levels of incentives are no longer justified and must be adapted.

🎯 Proposal: Halve Both Incentives

Category	Current Annual Incentive	Proposed (Halved)	Rationale
Collator Staking	40M RING / year	20M RING / year	Collators provide liveness, not security; current reward is excessive
KTON Staking	40M RING / year	20M RING / year	High fixed rewards, unsustainable at current Treasury levels

• The current Collator staking APY is over 12%, with under 340M RING staked — well above the level required to maintain a healthy set.
• KTON staking also consumes a fixed 40M RING annually, regardless of participation.

✅ Why This Change Is Necessary

• 🔒 Sustainability: Halving both incentives brings emissions down from 80M to 40M RING annually.
• 🔁 Efficiency: Collators play a liveness role; we should match incentive to real cost.
• 🌱 Flexibility: Reducing long-term emissions frees Treasury funds for ecosystem growth, and real user adoption.

This is a necessary adjustment to ensure the long-term health of the RingDAO ecosystem. Please share your support or thoughts below.

[danairey]

Im against this, staking is a tax from the unstaked to the staked. I have never sold a token purely because I want to increase my ownership % and I'm in it for the long game. You make the stake smaller, what's the point of holding, I'm not growing my market share anymore. Why not just put a locking mechanism in so that staked tokens cant be sold for a certain number of years or some sort. Look at hydra staking mechanism. All you want is for people to not sell staked tokens anytime soon.

[hackfisher]

staking is a tax from the unstaked to the staked

This argument applies more to inflation-based token models. In our case, staking incentives are not minted — they are paid from the Treasury, which is a finite public good. It’s not a tax on the unstaked, it’s a shared resource being depleted.

I never sold — I just want to increase my ownership %. I’m in it for the long game.

That’s great, and long-term alignment is valuable. But we should recognize that increasing ownership % through high incentives comes at a cost — it drains shared resources. Sustainability is part of the long game, too.

If you cut the stake reward, there’s no point in holding — I’m not growing market share anymore.

Staking should reward participation and contribution — not just passive holding for dominance. If the only reason to hold is to gain share via high emissions, then the model itself may be unhealthy. A lower, sustainable rate maintains fairness for all holders.

If we look at Bitcoin as an example, it operates under a deflationary model — and yet, there are no staking incentives. People still choose to hold BTC, not because they are paid to do so, but because of its scarcity, anti-inflationary properties, utility, and belief in its long-term value.

Staking incentives are a powerful tool for bootstrapping participation, but they come at a cost. Without continuous external inflows, maintaining high incentives becomes economically unsustainable.

Holding should be driven by fundamentals — not indefinitely by emission. As we shift toward a deflationary phase, incentives must also evolve accordingly.

Why not just lock staked tokens instead (e.g., like Hydra)?

Locking mechanisms are valid design tools, and we’re open to exploring them. But they address token liquidity, not spending. Our current challenge is about Treasury outflows, not just token velocity. Both can be improved — but separately.

All you want is to prevent people from selling.

The goal isn’t to block selling — it’s to preserve the capacity of the Treasury to support infra/builders, incentives, and ecosystem growth long-term. If high emissions today deplete funding for tomorrow, nobody wins.

[hackfisher]

Note: There were some numerical inaccuracies in the original post, which I’ve corrected.

[SasoLithops]

We had too high APR for stakers to be sustainable in long term. Too high pressure on Ring sells. The price movement was just connected cause and effect. This tough decisions was always waiting to arrive. I think this should be done. Now with no new minting of Ring and all Ring comming from treasury we must be careful how to spend it. With potential success of DeGov, Helixbox and other tools RING DAO could also do some Ring buybacks so no new future mints necessary.
KTON stakers should remain rewarded maybe those more who use some locking mechanism for KTON like @danairey suggested. Dan if you have good idea please share. I hope Index token brings additional value to KTON stakers so please share your ideas how we can make Index token or potentialy KTON more self sustainable.

[Laki389]

Taking into account that there is no longer any new "printing" of RING tokens, it is natural to consider reducing the staking rewards. For this reason, I support this proposal.
The current staking rewards come from the Treasury.

I understand @danairey concerns, but since there is no inflation and the Total Supply is 2,099,841,159 (which does not change), your ownership percentage will continue to increase.
If there is some kind of burning mechanism, even more.

Previously: inflation over 6%, APY 12%.
Currently: zero inflation, APY 12%.
If the proposal passes: (at least) zero inflation, APY 6%.

[danairey]

Well I don’t think it’s the right thing , I value all you guys. The only reason this project is alive still is cause of all of you and the only way I ever might monetize my investment is all of you . So end of the day do what ever you feel is right and keep building . As I have said many times no project deserves to thrive more than this one .saso on your index token I don’t know enough of your structure to add any value . These things tend to be simple and it’s the ability to market it that really counts which is where Darwinia and polkadot have fallen short . I truly hope the crypto market crashes because they need to get the rid of the froth, meme coins etc and focus on things that build real world utility which I think is where we placed.! As long as we can survive a crash

[SasoLithops]

Much appreciated your trust. Is (for me) driving force and necessary pressure.
I couldn't agree more. We have all failed deeply in marketing. That is why we will do Index on Base😉 We are moving away from Polkadot with this. I belive like my friend once asked Polkadot has the best cross chain L2 capability by far, but is that the way Polkadot wants to go?
I have trust in Furqan to do well in marketing department. We are now going to conferences, hopefully speaking at some soon too, once our products ready.
Index is in the making but nothing worth mentioning yet. Better to have something concrete and share when ready, then give empty date promises. But all progress is in KtonDAO Github. I can also add you to KTON DAO Working group on Telegram if you agree of course. As the more brains we are and the different of opinions the better the product.
I am more and more thinking adding more dePIN and RWA tokens in Index next to BTC. But all will be decided by votes by all of us...

If you have any opinions and ideas please don't hesitate to share.

[2xJDubs]

I think that this Halving proposal is necessary now that new chain emissions have stopped. While I expect a few to not like this idea, it is needed for the health of the Treasury and the long term health of the project. This should help reduce sell pressure on RING in the long run though we may initially see a decent decline beyond market conditions. I am in full support of this proposal and will be voting as such.