I was wondering if it might be feasible to allow moving SUP between reserves?
Now that the token is tradable, it would not break anything in that regard, and the SUP would remain within the reserve system, so no sudden draining without paying the community tax.
From a user perspective, it would be so nice to be able to gather rewards into just one reserve and only manage staking, LP etc. in one place.
Any thoughts on this - like:
are there any reasons why it might not be a good idea
Some reflections on this, based on discussions in the Discord:
At the moment, it is possible to ‘stream out’ SUP from my reserve to my wallet address. What happens in this case, behind the scenes, is that the SUP is transferred to an intermediary address, managed by Superfluid, from which it is then streamed out to my wallet address. What I suggest is a scenario in which the SUP is instead transferred to a different reserve - either directly or via the intermediary.
At the moment, I can drain SUP from a reserve directly to my wallet address, and then deposit SUP back into a different reserve. But when draining, I need to pay 80% tax for taking the SUP out of the system. However, as I see it, transferring directly between reserves could be done without incurring the community fee, as the SUP would never leave the system or create any sell pressure on the token.
I imagine that this option would only be available for unstaked SUP. After the transfer to a different reserve, it would still be unstaked, and the same constraints as always would apply with regard to draining or streaming out.
An important note on this is that it would also allow a person to collect all their voting power in one reserve - which would make it possible to vote just once, and potentially also make it more transparent who has how much voting power.
To the individual user, this would ease bookkeeping, as there would be no need to stake/LP from multiple reserves, add ETH to multiple addresses for this purpose, etc.
In a further development of the idea, it might also be possible to stream SUP from one reserve to another. I imagine it might be really practical to be able to simply set up ‘automatic forwarding’ of any SUP going into one reserve, to another. (But it would absolutely make sense to offer the simpler transfer option first).
Another possibility inherent in this proposal is that it might allow for new constructions, such as donating unstaked reserve SUP as part of campaigns. The donated SUP would in this case be transferred to the receiver’s reserve - subject to the usual constraints on streaming/draining. This would of course be less convenient for receivers than unrestricted SUP, but on the other hand they might get more funding as users would potentially be more willing to donate this restricted SUP.
This is a solid proposal and I agree with the motivation behind it. Since SUP is now tradable and would still remain within the reserve system (with community tax intact), I don’t see any immediate concerns from a user-experience or incentive perspective.
The ability to consolidate rewards into a single reserve would significantly simplify management for users who are staking, providing liquidity, or participating across multiple reserves. That kind of UX improvement usually leads to better long-term engagement.
I don’t have deep visibility into the protocol repo or implementation complexity, so I can’t comment on how easy or hard this would be technically. That said, it feels like something worth evaluating by the Superfluid core team, especially in terms of safety assumptions and edge cases.
Overall, I’d be interested in seeing this explored further, as long as it can be implemented without introducing new risks to the reserve system or token economics.
Only if I want to delegate it. If I simply wish to vote myself (without being a delegate), I currently have to do so from each of my addresses, I believe?
Yes, various tools and services possibly exist that can help with this to some extent. I don’t know these tools, however, and I don’t think Superfluid should rely on having only such users that are savvy in this regard.
It may not be a ‘need to have’, but good UI is certainly ‘very nice to have’.
As far as I know, they only accept unrestricted SUP. You cannot currently donate your reserve funds. Being able to do so could potentially unlock interesting new use cases and flywheels.
Thanks for engaging with the idea and being critical! I appreciate that!
While it’s true that the SUP would remain in the reserve system, it would create a path for one entity to transfer to a different entity without any fee, e.g. in the context of an OTC deal.
A receiver entity intending to hold long term may not mind receiving the tokens in a locker from which it can eventually be unlocked tax-free, while for the sender entity it would allow to instantly monetize the tokens without being taxed. (the receiver entity may ask for a discount, but that could be much smaller than an instant unlock would incur).
A counter to that argument could be that such a hypothetical sender entity could already do this if their locker owner is a smart contract which allows them to transfer ownership, transitively transferring ownership of the locker. The difference is that this can’t be done retroactively - if the locker owner is an EOA, there’s afaik no way to do that (other than handing over the private keys and promising to not keep a copy, which is conceptually not the same).
This is just a technical observation and doesn’t come with an opinion about that side effect being a problem or not. I just wanted to point it out.
I’m not the right person to judge if this is a problem, and - if it is - whether it may be somehow counteracted through technical means.
I am trying to understand your point, though.
The tax you refer to - is that Superfluid’s community tax, or does your concern have to do with the tax systems of the world outside of crypto?
If it is ‘merely’ Superfluid’s tax, then yes, being able to transfer between reserves would create a possibility to donate or sell tokens that are currently restricted, but may not remain restricted further down the line.
But… Is this an issue for Superfluid? Or a possibility?
As you say, a seller could also theoretically sell their keys - or they could just set up a stream to transfer the reserve funds to the buyer over the course of a year (assuming the buyer is already planning to be in long-term). Neither would of course be as safe for the buyer as a simple, immediate transaction of the locked tokens. (In the first case, the seller might secretly keep a copy of their keys, and in the second case they could close the stream prematurely).
As I understand it, the community tax is there to prevent instant unlocking that might flood the market and lead to sudden devaluation of SUP. Not to prevent the tokens from changing hands, as such.
But I may be underestimating the effect that reserve-reserve transfers could have?
On the other hand, if the tax issue you refer to has to do with regulations outside of crypto, I’ll leave those considerations entirely up to people who know more than me!
The reserve will help for smoot running of the trade in the Superfluid activities. Sometimes I find It very difficult to get ETHERIUM ON BASE Network Tokens as my gas for many trade like activation of my mystery box, wrapped token and giveth back, Community Activation, liquidity amongst others. As at now I only use Celo from my GoodDollar wallet as the source of everything on my Superfluid dashboard.
Please I need help on how to get ETHERIUM on Base Network easily.
The change would effectively facilitate creation of a market for locked SUP. Still much higher friction than with unlocked SUP. But still, a potential shortcut around the community tax for those with high time preference.
Do I think it would be detrimental for the DAO? Probably not.
