Hi WakeUP, thank you for opening these discussions!
I wanted to share some of my thoughts regarding this proposal. The following are my personal thoughts and not Laita’s official position, but thought I would chip in after seeing some of the discourse so far.
In the past, the PSP staking system was designed for maximal amount of choices and ways to boost the system. This included having multiple types of boosts (trading stables, trading non-stables, referring, etc.), as well as having single-sided and boosted options for staking. This amount of choices was proposed pre-emptively as a way of maximising choice to stakers, but as we saw in PIP-53, most of these boosts were barely used, and users found the system to be too complicated with the multiple staking choices and networks. Personally, had we released PSP 2.0 with sePSP2 only the current onchain liquidity would have been much higher than it currently is.
If an auto-compounding system would be added, I would avoid overcomplicating it and re-introduce optional staking systems. Introducing a single token with automatic compounding comes with many advantages, including as mentioned by others beforehand:
- Tax implications in some jurisdictions
- A wrapped value accruing token (like wstETH) could open the road in the future for self-repaying loans.
- A simplified staking experience where users save on gas and time and the value gets re-invested into the liquidity of the system automatically.
- A unified token will also allow for easier integrations in the future with, for example, pendle/spectra , multichain bridging (if needed) and more.
For points 2 , 3 and 4 especially, the DAO will be losing a this opportunity for simplification and CDP introduction if we make auto-compounding optional, as suddenly there will be multiple tokens and yield distribution sources diluting the possibilities of the wrapped token.
Finally, on a more practical perspective, having multiple options could also complicate the staking upgrade partnership options @citizen42 has discussed about with future patterns. Regarding pricing, I personally believe this would be better discussed once a proper spec is published on how the project would go along, but I’ll leave this section on the hands of the more capable VGC members!