LDO holders can stake their token as like xLDO.
xLDO is a proof token of LDO deposit to staking module. Lido treasury allocates certain number of Lido tokens to the staking module every 00:00 UTC.
The conversion rate of LDO to xLDO is 1:1. When a xLDO holder decides to quit staking LDO, the xLDO will be burnt and the amount of LDO the holder can receive is equal to
(total LDO belonging to the staking pool) * (xLDO token amount the holder has)/(total xLDO token amount)
or maybe certain percent of LDO reward will be charged and send back to staking pool. Let the rest xLDO holder enjoy it.
And xLDO can:
Keep the same governance power as Lido.
2.or have higher governance power depending on lock-up tenor if fixed term deposit is needed
When users quit staking, the amt of LDO returned is “(total LDO belonging to the staking pool) * (xLDO token amount the holder has)/(total xLDO token amount)”.
In this case, the total xLDO token amount is after netting out the unstaked xLDO being burned? So the user will get back more LDO then he initially staked?
If you meant that the total xLDO is not reduced by the amt being burned, then the LDO amt returned will always be = to amt initially staked. So why bother staking?
In both cases I am trying to understand whats the purpose of this proposal. Can you elaborate?
After the xLDO holder get the LDO, xLDO is burnt. Yes, the user will get more LDO.
The purpose of proposal is from LDO holders’ interest. The protocol sends out millions of LDO token to develop new public chains or reward liquidity. That’s great. But LDO holders are also supporters of the protocol. I think LDO staking module can reduce supply side and keep the same governance power
So, pure inflationary rewards just for holding LDO in a form of xLDO? I don’t think that’s effective. Better to redirect portion of protocol fees to xLDO holders, same as Sushi-xSushi.
This matter can be discussed. At present, the interests of LDO holders have not been paid attention to. There is a lot of selling pressure, and the selling pressure will be even greater in December.