Set Smoothing Factor on Staking Rewards to 28

This proposal increases the smoothing factor for staking rewards from 14 to 28 days, providing a more stable staking APR once the distribution wallet completes its initial accumulation period.

Current Status

Osmosis staking rewards are distributed using a smoothing mechanism that averages staking reward distributions over a fixed number of days.

The most recent change was in Proposal 996, where the parameter was increased to 14 days.

As the APR display indicates the yearly return for stakers, it may be further smoothed incrementally as the distributing address accumulates.

Proposed Change

When the smoothing factor increases from 14 to 28 days:

The distribution wallet will need to accumulate an additional 14 days of staking rewards for staking rewards to return to the normal level.

During this accumulation period, the displayed APR will appear lower as the wallet builds its balance.

Once equilibrium is reached, the APR will stabilize and fluctuate less sharply each day.

This change does not affect the total staking rewards distributed to delegators, only the timing and smoothness of displayed updates.

The secondary drop visible in this chart is the upcoming regular thirdening event, which reduces inflationary issuance.

Chart: Impact of smoothing on historical Staking APR volatility with projection for accumulation period

Parameter Change

DailyStakingRewardsSmoothingFactor Increased from 14 to 28

Forum Thread: https://forum.osmosis.zone/t/increase-smoothing-factor-14-to-28/4030