Earlier today there was a discussion on the Discord around auto compounding rewards. Currently this is possible via Mushroom Finance, however their 30% fee makes expensive and prices out community members with smaller stakes.
I'd like to kick off the discussion by proposing that staked ALCX move toward a model similar to xSushi -- xALCX. In this model ALCX holders would stake ALCX for xALCX tokens. These tokens would be a derivative of the staked ALCX and represent the holder's claim to their principle plus their proportion of the compounded rewards. A second contract would then be responsible for harvesting and re-staking the rewards for the ALCX rewards pool daily. Similar to xSushi, the amount of ALCX that xALCX would represent would increase over time as the rewards are auto compounded.
Considerations:
- There is an desire among some community members to compound rewards but high gas prices make this prohibitive. By distributing the gas fees across the entire pool we can solve for this issue.
- The contract that executes the daily compounding should be compensated for the gas cost of execution. This may slightly reduce the APY for the ALCX pool but the daily compounding should make up for that.
- Limiting the scope of this to just the ALCX pool for should allow the discussion to be more focused and the project to be completed more quickly (if this were adopted).
- Would this be a project that the core team would take on or would there be a bid/grant process for community members to participate or own this work?
