Could we stretch our AVAX beyond just staking/delegating it?

@kevin, months ago on Telegram you posted an idea whereby you could used locked tokens whilst being staked. i.e. using it for liquidity pools/loaning/etc. This could further “stretch” your AVAX beyond that of staking and could further incentivize AVAX holders. Was this correct?

I still couldnt understand if this was just an idea or an actual stream of work that is under progress. What are your thoughts on it and is that even possible to do (ie. using your tokens beyond that of staking?)

I would like to see research into this area as well.

Not just an idea, it is under active research. There’s multiple ways to directionally steer this effort, with various degrees of (nega/posi)-tive consequences. This type of work needs very extensive research, and we should use this channel to discuss.

The most promising method is to augment the current staking functionality to have a “dynamic destination” field. Currently, when you do staking, you do three things: first you establish your NodeID, then you point your AVAX to that NodeID to stake for some specified period of time, and finally you specify a recipient address for the rewards. However, the stake is always returned back to the original owner of the stake.

You can augment this process by specifying a “destination” for the returned stake as well. Effectively, this means that at the end of the operation, the stake isn’t returned to some third-party destination address.

This enables us to create on-chain contracts that are able to promise delivery of coins upon completion of the stake. Since you’re now able to programmatically specify where the stake ends up, you can create a derivate product that can prove ownership of some UTXOs tied to the destination of the stake. You can freely trade this product back and forth.

Beyond whether this is a good idea we also have to explore how to precisely construct this product. There’s some weirdness with it, in that it would be really difficult to keep track of if it is fungible. This means that you’d basically be trading non-fungible IOUs (worth a particular block of stake with some expiry time into the future).

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This sounds amazing!