Introducing DSP v2.0: The Next Evolution of DAO Staking on InvArch
Introducing DSP v2.0
The InvArch Network has always been at the forefront of DAO innovation, pioneering decentralized governance and funding models that empower communities to build the future. Now, with the upcoming launch of DAO Staking Protocol (DSP) v2.0 in Q2 2025, we are introducing key upgrades designed to create a more sustainable, fair, and growth-focused ecosystem.
This upgrade brings a dynamic inflation model, improved DAO registration requirements, reward vesting, and new DAO reward caps—ensuring a more balanced and long-term approach to DAO growth and supporter rewards.
“DSP v2.0 is a game-changer for both DAOs and VARCH stakers”
Understanding DSP v1.0: The Current DAO Staking Model
Under the existing DAO Staking Protocol v1.0, the VARCH token experiences a fixed annual inflation of 10%, which is distributed as follows:
60% allocated to DAO Rewards
40% allocated to Staking Rewards
Stakers can delegate VARCH tokens to DAOs they support, earning staking rewards based on their total contributions. The staking Annual Percentage Yield (APY) is determined by dividing total staking rewards by the total amount of VARCH staked.
DAOs, on the other hand, receive rewards proportionally based on how much staking support they have. To qualify for rewards, a DAO must have at least 250,000 VARCH staked towards it.
While DSP v1.0 has successfully fueled DAO participation, it comes with challenges, such as a fixed inflation model, lack of DAO structure requirements, and unrestricted staking dominance by single DAOs. That’s where DSP v2.0 comes in.
What’s Changing in DSP v2.0?
The upcoming DSP v2.0 introduces major refinements aimed at improving long-term sustainability, security, and fairness within the InvArch Network. Here’s what’s new:
1. A Sustainable Inflation Model
Instead of a fixed 10% annual inflation, DSP v2.0 will introduce a dynamic model where inflation gradually reduces over time:
Starts at 10% annual inflation
Decreases by 1% every 6 months for the next 2.5 years
Settles at 5% annual inflation, ensuring long-term sustainability
This model prevents excessive token supply growth while maintaining a healthy incentive system for DAOs and stakers.
2. Updated Inflation Distribution
Under DSP v2.0, inflation rewards will be allocated differently:
40% to Staking Rewards
40% to DAO Rewards
20% to the InvArch Treasury
This introduces a dedicated network treasury, allowing the protocol to fund future development, initiatives, and ecosystem expansion without relying entirely on external funding.
3. DAO Registration Requirements
To ensure only legitimate DAOs participate, DSP v2.0 introduces new on-chain requirements:
DAOs must have an on-chain ID set
All DAO members must also have an on-chain ID
DAOs must consist of at least 5 members
This strengthens transparency and governance, preventing fake or inactive DAOs from exploiting the system.
4. Reward Vesting for DAOs
One of the most significant changes is reward vesting. Under DSP v2.0, DAO rewards will no longer be claimable instantly but will be vested linearly over 6 months.
Rewards are still distributed daily at the end of each block era
However, claimable rewards will unlock gradually over a 6-month period
This prevents sudden token dumps by DAOs and encourages long-term commitment and development.
5. DAO Staking Support Cap (Max 10%)
To ensure fair distribution of staking rewards, no single DAO can control more than 10% of total staking support.
This prevents dominance by a single entity
Encourages broader and healthier DAO funding
Ensures multiple DAOs receive support instead of just a few large ones
This change protects decentralization and distributes rewards more equitably across the ecosystem.
6. DAO Reward Cap: Unused Rewards Get Burned
DAO rewards are also capped at 10% per DAO—meaning no single DAO can receive more than 10% of the total daily DAO Rewards.
If a DAO qualifies for rewards, it cannot exceed 10% of the total daily DAO Rewards, even if it has more than 10% staking support.
If there aren’t enough DAOs with sufficient support to claim rewards, the remaining unallocated rewards will be burned at the end of the block era.
Example Scenario:
• DAOs A, B, C, and D each reach the 10% cap, securing a total of 40% of DAO Rewards.
• DAO E only secures 8%, meaning 48% of DAO Rewards remain unallocated.
• Instead of redistributing the remaining 52%, those rewards are permanently burned.
This mechanism ensures that DAO Rewards remain fair and distributed among multiple DAOs, while excess rewards do not dilute the token supply.
What This Means for You
For Stakers:
More sustainable rewards over the long term
Continued high APY with improved network health
More diverse DAO choices to stake towards
For DAOs:
Stronger legitimacy & governance requirements
Fairer distribution of staking support
A more predictable and long-term funding model
For the InvArch Network:
More sustainable tokenomics
A balanced, growing DAO ecosystem
A self-sustaining network treasury for long-term growth
DSP v2.0 is Coming in Q2 2025
The InvArch DAO Staking Protocol v2.0 represents a huge step forward in ensuring the long-term success of DAO staking and governance. With a dynamic inflation model, fairer staking support, reward vesting, and DAO reward caps, DSP v2.0 will set the stage for a more sustainable and decentralized ecosystem.
While DSP v2.0 is not live yet, development is progressing smoothly, and we are on track for a Q2 2025 launch.
What’s Next?
The InvArch Portal (UI) will be updated to allow DAOs to register permissionlessly once DSP v2.0 is live.
More details and a final implementation timeline will be shared as we get closer to launch.
Stay tuned, get involved, and prepare for the future of DAO staking with DSP v2.0!
🚀 Follow InvArch on X to stay updates on the latest project announcements.