Staking Discussion: Unstake Burn Fee Percentage

Staking Parameter: Burn Fee Percentage

Now that the the RFC and white paper for Rarity Pools are live, I’d like to get feedback from the community regarding what value the Burn Fee should be when unstaking.


The white paper outlines this well but here is a short summary. The burn fee is a disincentive for people to attempt to double stake by playing the round timing mechanism. Each Rarity Pool has rounds independent of other pools and thus the enterprising staker could try and stake on one pool before a snapshot, get the snapshot, and then stake on another pool. By burning a percentage of the amount unstaked, we disincentivize this behavior because rewards will be unknown.

The current value is 1%. Meaning, 1% of what of what you unstake is burned.


I have a few questions to start the discussion:

  • Is this an effective deterrent?
  • What value should the Burn Fee percentage be?
  • The burn fee incentivizes staying within a pool longer until you obtain enough rewards to outweigh the burn fee, is this a behavior we want?
  • What are alternative methods for preventing double staking?

Is this a true burning? RARE that is lost forever. Or is it relinquished to others in some way, the pool and increases the amount that other members withdraw? Or back to the DAO? Or something else?


This is a true burn, turning RARE into a deflationary token.

Have other pool systems like this with a round timer been built before. Would an analysis of them tell us how people might behave?
How would they know which pool is going to payout and can they time the snapshot?
What if the price keeps dropping and / or you stake on the wrong wallet so there is never a time that the rewards outweigh the burn fee or there are never any rewards for that pool?
Maybe the longer you leave tokens in the pool the burn fee goes down?
Maybe I do not really understand how this works and am asking dumb questions?

From my research I haven’t seen many time based staking systems quite like ours so we didn’t have many examples to work from.

How would they know which pool is going to payout and can they time the snapshot?

It’s not possible to know the payout of a pool so there isn’t an issue there but if one is confident in multiple pools you could get exposed to multiple potential payouts by timing the round snapshots. You can time snapshots as there is a count down timer to when the next snap shot can happen. It’s a bit much to explain here but we did our best in the white paper section on rounds to describe how the mechanism works.

What if the price keeps dropping

Since this is all in RARE the price shouldn’t be a factor.

You stake on the wrong wallet so there is never a time that the rewards outweigh the burn fee or there are never any rewards for that pool?

In this case I think we need have the responsibility be on the user to make sure they are staking on the intended pool. Similar to in Ethereum, the protocol doesn’t let you unsend eth to an address you didn’t mean to send it to. If I misunderstood what you meant here please let me know!

Maybe the longer you leave tokens in the pool the burn fee goes down?

This is a potential option but you could still double stake. It just adds a length of time you need to keep the tokens staked before you can double stake. IMO it doesn’t really address the issue but it could perhaps disincentivize it enough to no longer be an issue.

These are great questions @BardIonson !

  • What are alternative methods for preventing double staking?

Users have to be in the pool for 1 whole round before they are eligible to earn a reward?


Wasn’t there a graphic somewhere that helped illustrate this issue. I can’t find it.

If an auction is triggered, does the user have time to get into that pool before the auction ends?

And in this double staking case. Can they stake in all currently running auctions and then claim for all of them when they are done?

This will depend on round length vs auction length. If all the auctions are longer than the round length then it is possible they could go stake on these sellers. A great point in discussing what value the round length should be.

I don’t there will be any way to prevent people staking on a seller/artist if there is an advertised sale long in advance.

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I think for sure the shorter the length of the round the more you encourage gambling and speculating and a short term game.
If this really is about helping the artists rather than just gamifying things then I would say a month is more appropriate for a round

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I would think some type of exponential decay function or even a simple table representing ~exponential decay could determine the burn fee. The goal being to incentivize long term staking rare a minimum of multiple rounds and disincentivizing staking for minimal rounds

Ideally I would see staked rare on an artist should be a relatively low volatility. If a staker opts to stake into a pool ideally it would be because they believe in the longer term potential of the artist, rather than gaming the system for rewards.

These numbers are handwavey but something like below depending on the round length.
stake <1 round → 50% burn
stake < 2 rounds → 25%,
stake < 3 → 12.5%
stake < 4 → 6.25

Another protocol to draw inspiration from could be the ethereum activation and withdrawal staking queue which has a round based reward and withdrawal system. I am not an expert in this mechanism.

I.e Only allow so many unstakers/stakers per round to maintain stability, perhaps that combined with a burn fee based on time staked.


Absolutely on board with Leonardo regarding round length defining burn fee.

I get that we don’t want people to keep hopping from one pool to another, but we also don’t want to encourage people to keep the spotlight on a single target simply because the cost of moving the spotlight is too high.

If someone has been shining on an artist for 10 rounds, they should be able to start shining on another artist without having to pay a “burn fee”.

We don’t want the spotlights to be constantly moving around, but we don’t also want to freeze them with 1% burn to move around… People will already be paying Ethereum network fee