The pSTAKE token is currently used for governance of the pSTAKE liquid staking protocol. However, a two-token model with a dedicated governance token is not ideal for several reasons.
- Complexity: A two-token model adds complexity for users and developers. Users need to understand and manage two different tokens, and developers need to support two different tokens in their applications.
- Reduced Liquidity: A two-token model reduces liquidity for both tokens.
- Sell Pressure: A governance token with no intrinsic value is vulnerable to sell pressure from holders who are not interested in participating in governance. This can lead to price volatility and make it difficult to attract new users to the protocol.
A token strictly for governance has no intrinsic value. This is because its only utility is to participate in protocol governance. Holders of a governance token are not entitled to any other benefits, such as staking rewards or discounts on protocol fees.
Merging the pSTAKE token with XPRT would have several benefits:
- Simplicity: Merging the two tokens would simplify the pSTAKE ecosystem for users and developers.
- Increased Liquidity: Merging the two tokens would increase liquidity for XPRT. This is because the liquidity for the pSTAKE token would be added to the overall liquidity for XPRT.
- Increased Utility for XPRT: Merging the two tokens would increase the utility of XPRT. This is because XPRT would be used for both staking and governance of the pSTAKE protocol. XPRT can also start accruing pSTAKE fees from its liquid staking protocol.
Merging the pSTAKE token with XPRT would be a beneficial change for the Persistence ecosystem. It would simplify the ecosystem, increase liquidity for XPRT, and increase the utility of XPRT.
I recommend that the pSTAKE community vote in favor of merging the pSTAKE token with XPRT. This would be a positive step for the long-term success of the pSTAKE protocol and the Persistence ecosystem.