WalletConnect Unveils Major Upgrade to Staking Model: Permanent Staking and User-Controlled Withdrawals Introduced

WalletConnect (WCT), a prominent player in Web3 wallet infrastructure, has announced an ambitious proposal aimed at overhauling its WCT token staking framework. As part of this transformative plan, the company is introducing two standout features: “Permanent Staking” and “User-Controlled Withdrawals,” both designed to simplify staking and improve predictability for users.

The announcement, made on October 22 via X (formerly Twitter), underscores WalletConnect’s commitment to addressing user pain points associated with the existing staking model. The proposed updates promise a more intuitive and seamless staking experience.

Key Drawbacks of the Current Staking Model: Frequent Maintenance, Value Fluctuations

WalletConnect identified several critical issues in its existing staking system. Presently, stakers lock their tokens for a user-selected period, during which the reward weight—also known as stake weight—declines linearly over time.

This model forces users to frequently rebalance their positions to optimize rewards, creating both inconvenience and confusion. Additionally, the dynamic reward weight poses challenges in accurately calculating anticipated returns. While the current model offers flexible lock-in periods ranging from 1 week to 104 weeks, this flexibility has inadvertently added complexity for users.

Introducing “Permanent Staking” and Streamlined Withdrawal Options

At the heart of the proposed upgrade are two features aimed at revolutionizing the user experience: “Permanent Staking” and “User-Controlled Withdrawals.”

1. Permanent Staking:
   In the new model, once users deposit their tokens, their reward weight remains fixed at 100% until withdrawal. This eliminates the need for periodic rebalancing, enabling a “set-it-and-forget-it” approach. Users no longer need to worry about their reward weight diminishing over time, creating a far more predictable staking experience.

2. User-Controlled Withdrawals:
   With this feature, users control when they want to start the unlocking process for withdrawals. Unlike the current setup, the reward weight will only begin to decrease after a user initiates an unlock period. This process comes with clearly defined durations to enhance user clarity and planning. The available unlock periods will be: 4 weeks, 8 weeks, 12 weeks, 26 weeks, 52 weeks, 78 weeks, and 104 weeks. This structure makes it significantly easier for users to compare rewards and predict outcomes.

What About Existing Stakers?

WalletConnect has reassured users that current staking positions will remain unaffected under the proposed changes. Positions within the existing framework will not be automatically migrated to the new system. For these users, their staking positions will function as if they are already in an unlocking stage, with rewards gradually decreasing over time. Tokens can be withdrawn as they reach maturity.

For users who still prefer the current staking model—where value immediately decreases upon deposit—WalletConnect will continue to support it as an optional feature.

However, users interested in transitioning to the new “Permanent Staking” model will need to manually withdraw and re-stake their tokens after the proposal receives approval.

Governance Vote: What Comes Next?

To move forward with these proposed changes, WalletConnect has scheduled a governance vote to take place from October 29 to November 5. The results of this vote will determine whether the staking reforms will be implemented.

By addressing key user frustrations—such as complexity, frequent rebalancing, and unpredictable returns—WalletConnect aims to create a more user-centric staking system. These proposed changes not only simplify the process but also set the stage for a more streamlined and efficient staking solution in the Web3 ecosystem.

The outcome of this proposal could mark a significant milestone for WalletConnect as it continues to enhance its platform to better serve the needs of its growing community of stakers and users.