0. Summary
This BIP seeks to lower the minimum single-sided staking requirement of BOTTO in the governance contract to broaden active rewards eligibility to a wider potential active user base and to thus further advance the distribution of Botto's training inputs as a decentralized artist.
1. Rationale
Active rewards were first introduced in late 2022 with the start of Botto Project’s Fragmentation Period. At the time, BOTTO was trading around $0.05.
As the minimum single-sided staking requirement of BOTTO in the governance contract for active rewards eligibility was initially set at 2000 BOTTO, in USD terms it would have thus cost about $100 for a new user to purchase the requisite amount of BOTTO and stake it to then be incentivized to regularly engage in Botto’s training as an active voter.
Considering the overall rebound in the crypto market since the cycle lows at the end of 2022, BOTTO has since traded as high as about $1.70 in 2024. Thus, acquiring 2000 BOTTO to participate as a voter and to be eligible for active rewards is a higher upfront expenditure now.
Therefore, to grow Botto DAO and further distribute Botto’s training inputs to advance its progression as a decentralized autonomous artist built on Ethereum, this BIP seeks to reduce the minimum single-sided staking requirement of BOTTO in the governance contract from 2K BOTTO to 100 BOTTO.
This proposed reduction of the minimum single-sided staking requirement is further aligned with recent discussions amongst Botto DAO members to potentially expand Botto’s voting experience to users on Base, a prominent Ethereum L2, which will enable participants to interact with Botto’s underlying contracts at much cheaper transaction costs versus Ethereum mainnet. Accordingly, it is sensible to similarly reduce the minimum BOTTO stake for active rewards eligibility in advance of such a potential integration.
2. Proposal specifications
Reduce Minimum Stake for Active Rewards Eligibility: reduce the minimum single-sided BOTTO stake in the governance contract to be eligible for active rewards from 2K BOTTO to 100 BOTTO.
100 BOTTO is proposed because it aligns with the recent baseline VP implementation, whereby both new and active users are credited 100 VP per round to train Botto. Note that new users simply voting with baseline VP would not be eligible for active rewards as proposed herein without at least 100 BOTTO staked in the governance contract.
Furthermore, 100 BOTTO is proposed because it mirrors the total BOTTO supply of 100M tokens at Botto's inception, which has since been reduced to just below 94M following past BOTTO burn initiatives.
Reduce Minimum Claim from Active Rewards Contract: reduce the minimum claim from the active rewards contract from 0.01 ETH to 0.001 ETH.
As the minimum staking requirement is proposed to be reduced, it is sensible to also reduce the minimum claim amount in ETH from the active rewards contract. 0.001 ETH is proposed as the new minimum claim amount because it would still act as a guardrail to help ensure users do not claim an amount that is worth less than the associated transaction’s gas cost.
Since the Dencun upgrade in early 2024, Ethereum mainnet transaction costs have fallen considerably, so this reduction in the minimum claim amount is also warranted when this is considered as well. Per Etherscan, claim transactions users have had with the active rewards contract over the last several months have by and large cost well below 0.001 ETH when gas is less than 25 gwei or so.
Even if gas fees trend higher over time, the onus remains on users to still ensure the amount of ETH they're claiming is worth it relative to the transaction cost. By lowering the minimum claim amount to 0.001 ETH, a guardrail is thus still preserved from a UX perspective, while more flexibiility is extended to users to claim when it is best suited for them, especially during periods when gas fees are low.
- Apply Changes on Ethereum and Base: the above-mentioned changes are proposed to be implemented on Botto’s user interface for Ethereum mainnet in the near term, and in the future on Base if Botto DAO ultimately agrees to proceed with a Base integration.
Regarding the suggested new minimum claim amount of 0.001 ETH, it is proposed to be applied equally on both Ethereum mainnet and on Base because it would reinforce the idea that Botto DAO seeks to onboard more users who will be regularly engaged in training Botto. This necessarily entails that active voters have to vote periodically to build up to and above the minimum claim amount. While 0.01 ETH in active rewards can take a long time to accrue for users with less BOTTO staked, 0.001 ETH is more attainable.
Assuming gas fees on Ethereum mainnet trend even higher over time, then active voters with less BOTTO staked would likely shift to Base, whereas others may prefer to simply stay on mainnet. In any case, the 0.001 ETH minimum claim amount from the active rewards contract would be the same on both, to ensure more recurringly engaged users are onboarded and retained for the ongoing training of Botto.
3. Criteria of success
Increased number of BOTTO holders due to the reduction of the minimum staking requirement for active rewards eligibility and the corresponding reduction of the minimum claim amount in ETH from the active rewards contract.
Increased participation in Botto DAO from the onboarding of a greater number of participants incentivized to regularly train Botto, thus augmenting the distribution of Botto’s training inputs and further reinforcing its progression as a decentralized artist.
Increased long-term token velocity for BOTTO, as balanced by a greater number of users incentivized to stake and participate in actively training Botto on a regular basis.
4. Disadvantages
- Dilution of active rewards for existing Botto participants as more new users are incentivized to participate in training Botto too, though this is mitigated by the fact that growth in Botto’s user base will inherently help to sustain Botto’s foundational narrative as an “artist governed by the people” in that the opportunity for more users to be involved in Botto DAO will be further fostered.
