In light of recent awareness that Binance has stopped automatically staking Tez, I wanted to broach the subject on Agora (and Twitter) regarding what can be done to incentivize self-custody & non-custodial staking. As we expand into more use-cases for Tez and build our DeFi ecosystem, I believe there may be a number of ways to get this started.
Whilst this is not on a protocol level which would be ideal (I haven’t yet figured out how that would function), and requires a bit of altruism from the community (thankfully our community is warm, helpful, cooperative), I believe there are ways for our upcoming DeFi projects to incentivize self-custody and self-delegating.
One of the ways for this to be done is to have DeFi platforms/wallets incentivize deposits from large exchanges, where one’s reward may be slightly higher if deposited from a known exchange address. Or perhaps build an offering of great platforms so people will want to self-custody their own Tez. The idea is to get the ball rolling on Tezos DeFi to reach critical mass, and does not need to remain a permanent fixture.
I know this opens up a pandora’s box of ideas and issues, but I wanted to bring this up on agora to hear the community’s thoughts, ideas, and concerns.
The community must help by keeping things like this on the spotlight, helping newcomers understand what they are losing and help them make the transition.
I don’t know how bakeries work in detail, but i think they can offer a lot. Offering lower fees for people transitioning from CEX, helping newcomers start their own bakery…
Magma Wallet will beta test a way to buy xtz with fiat directly from the wallet, which i believe is a great step towards the right direction. People probably keep their crypto on CEX because of laziness and lack of knowledge. We have to make it easier for users to buy directly from a wallet where you truly own the keys and can delegate to whoever you want.
I believe we could also make a good point by asking Binance and others directly why they are not sharing their baking rewards? Is it a lack of tools, knowledge? Is there something that the community, developers, bakeries or Tezos Foundation can do to help?
Or is simply the obvious, that they are greedy? Getting a public and official answer may also help with this situation.
The problem with just having bakeries lower fees is that CEX’s can offer 0% fees as they want to custody your Tez/leave your Tez on the exchange to trade/stake. Unless you directly “lock” your Tez on Binance for example, you don’t get any payout and they keep 100%.
We need a way to incentivize the withdrawal from custodial exchanges into better non-custodial solutions. DeFi liquidity mining could be one way of doing this, I’m curious if anyone else here has other ideas beyond just “it’s safer to custody yourself” which normal people find difficult/inconvenient.
Non-custodial fiat onramps (importantly through bank transfers) would be incredible, I’m looking forward to more of these and not just credit card charging solutions.
