Proposal: Introducing an Emergency Unstaking Mechanism for $JUP

Jupiter DAO
1

Summary:
While the 30-day unlock period for $JUP staking is a strong mechanism to lock supply and encourage long-term commitment, it may pose significant challenges during black swan events or unforeseen emergencies. To address this, we propose implementing an Emergency Unstaking Mechanism that allows users to exit their staked positions prematurely by paying a penalty. This approach preserves the integrity of the staking model while offering flexibility during critical situations

. Problem Statement:
The fixed 30-day unlock period may deter participants during volatile market conditions, particularly when black swan events occur. Users locked into their positions might be forced to endure significant losses or liquidity issues. This could undermine confidence in the staking mechanism, especially for newer participants in the ecosystem.

Proposed Solution:

Introduce an Emergency Unstaking Option where users can reduce the 30-day unlock period by paying a fine or fee. This system balances flexibility with the need to deter frequent or unnecessary early unstaking.

Penalty Mechanism Options:

  1. Fee in $SOL:
    Users pay a fixed or dynamic fee (e.g., 1 SOL) to unstake early.
  • Fees collected can be added to the treasury or redistributed as staking rewards.
  1. Percentage of $JUP Unstaked:
  • A penalty percentage (e.g., 5-10%) of the total $JUP being unstaked early is burned or redirected to the staking rewards pool.
  • This option reduces circulating supply and incentivizes longer-term staking.
  1. Flat Fee in $JUP:
  • Users pay a flat fee (e.g., 50 $JUP) to trigger early unstaking.
  • Collected fees are added to the DAO treasury or burned to further strengthen tokenomics.

Feedback and Comments Welcome.

5 Likes
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I’ve always liked the idea of this with locked up staking. I don’t see any issues with creating an income for the DAO with this mechanism. We ultimately should get to such a stable point that there is no lock up period eventually.

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This is basically taken straight from one of my comments earlier on this topic… If you find it you will see how similar you & I are.
Immediately unstake must have a Significant Fee.

2 Likes
4

Interesting thoughts… I would love to be able to borrow vs my staked jup as well!

2 Likes
5

Awesome wish i could have seen and tagged u in the proposal, care to ref the link here so others can also check it out?

1 Like
6

I proposed this some months ago, the reply i got was that it could mean whales would stake to shift votes and then unstake.

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7

It should def be a base % of JUP to be emergency-unstaked (it should be costly imo, otherwise the whole lockup is arbitrary).

Also it might make sense to emergency-unstake while the unstake-process is already ongoing where the base % would lower the closer you get to the actual unstake time (where at day 15 the base % fee is cut in half and at day 30 the fee is 0%). that way you could unstake earlier while paying a fair price.

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8

good input, numbers i mentioned in post were just placeholder examples but ur onto something nice

btw welcome to the forums!

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9

I’m with 1000x, the other options could get pricey. Maybe only allow 50% of the Jup in emergency at a 5% rate.

3 Likes
10

Cool idea.

If an immediate unstake option was to be implemented I’d like to see the fee be set quite high in order to deter governance members from abusing the ASR system.

As another member suggested, being able to leverage our $JUP positions in order to participate in DeFi would be super cool. Something like a LST (liquid staked token) representing staked $JUP could be interesting too however, I’m not sure what the effects of that might be.

Nice proposal @NameGames

2 Likes