in preparation for the crowdloan unlock on October 24th, as discussed in this forum post, it was concluded to propose slightly increasing the ideal staking rate in Polkadot, such that the network can accommodate the new DOT that is being unlocked into the staking system, without reducing staking rewards.
In short, what this proposal does is:
For the current situation, the ideal staking rate would then be calculated as: 0.75 - min(45,60)/300 = 0.6, i.e., 60%.
You can find the full steps to reproduce the proposal in https://hackmd.io/ykunWzXYR-Kaz_cM2KNIlg. It is merely a 1 liner change to the former Polkadot runtime that was version 9430.
The enactment time is set to this block, which is roughly 2 days before the funds unlock from crowdloans.
The corresponding fellowship referendum to whitelist the call is https://collectives.polkassembly.io/member-referenda/24.
Threshold
As I understand this, this is to keep the apy% at the same percentage even when all the crowdloan liquidity is absorbed.
but currently the rewards are very high which does not allow that liquidity to be directed to the parachains, which if they do not offer degen apys of 200% they do not attract enough liquidity, which is not sustainable
Staking is valuable because it secures the entire parachain ecosystem, but if parachains do not prosper, staking loses meaning since there is nothing to secure?
I understand that they seek to ensure that liquidity on the relay chain and that users do not lower their rewards considerably.
but if it does it is fine, it means is above average and should go somewhere else or accept fewer rewards, simple
I have reached out to Jonas on Twitter for more information wrt how the staking rewards % would look without this change, at varying % increases in % of supply staked after the great unlock.
Many missed the original discussion in the forum on this topic, and a rather big change feels a little rushed through without fully understanding potential impacts across the board.