I think this covers the failure risk in terms of if one of the farming techniques falls over. A combination of slashing staked INDEX, a coop reserve (held as ETH or DPI?), and a final fall back on INDEX reserves (built with a proportion of the farming income. INDEX holders can stake for income, or be the final backstop in case of failure. If you don’t think the slashing risk is worthwhile due to selection of farming approaches, you don;t have to stake.
I think I need to look at the AAVE staking system again as I think it’s similar.
I think that there will be some long term sticky DPI holders which we could farm. However, I agree that this is an untested assumption, and produces a liquidity risk. So staking DPI for a share of the farming rewards makes sense (at least until we gain confidence in DPI holding behavior).
The downside I see to staking DPI, is that we block other opportunities for holders to access other extrinsic productivity. (i.e. they can not stake and be a ETH-DPI LP, or use AAVE or Compound vaults etc). One way around this would be to allow different staking options:
- $DPI,
- $aDPI,
- $cDPI,
- ETH:DPI LP tokens.
Obviously aDPI and cDPI still have some liquidity in the market as people can borrow and redeem. So we may want to only remove a proportion of those locked tokens from the main DPI treasury and offer a lower reward to people staking $DPI.