[ACP-273] Reduce Minimum Validator Staking Period to 24 Hours

[avalanche-foundation-admin]

This proposal reduces the minimum validator staking period on Avalanche's Primary Network from 2 weeks (336 hours) to 1 day (24 hours). The change lowers barriers to validator participation while maintaining network security, enabling more flexible staking strategies and improving capital efficiency across the ecosystem.

https://github.com/avalanche-foundation/ACPs/blob/main/ACPs/273-24-hour-minimum-staking-period/README.md

[iJaack]

Yes! Not really anything to say here, this is instrumental for institutions adopting liquid staking-based ETFs.

[ericlu-avax]

Thanks for pushing this proposal forward. I believe lowering the minimum validator staking duration is a step in the right direction for attracting staking from participants with higher liquidity needs or shorter planning horizons.
One potential risk that came to mind is: a lower hurdle could attract more “temporary” validators. As discussed in Towards an Optimal Staking Design: Balancing Security, User Growth, and Token Appreciation (Nicolas Oderbolz, Beatrix Marosvoelgyi, and Matthias Hafner, 2024), shorter commitments can lower average validator quality. In our case, though, I think the existing minimum stake requirement and the proposed new 90% uptime requirement should mitigate this risk.
+1 to Michael’s point on incentives. Throughout the entire history of Avalanche, roughly 16% of validating nodes are staked at the 2-week minimum, and 6% of validating stake is at the 2-week minimum (see attached plot). I think it is safe to argue that for many of these validators, the 2-week minimum is binding (the fractions are actually higher for more recent stints, suggesting maybe there are more liquidity conscious validators recently). If the min staking duration gets lowered to 2 days, I think a substantial share would likely prefer to stake for only 2 days, especially once the continuous staking / automatic restaking ACP is live (whichever name we end up using). And if we look at the compounded effective annual yield, the gap between 2 days and 2 weeks becomes even smaller than the nominal APY numbers suggest.
More broadly: the spread in yield between long and short staking durations will also tend to shrink over time as total minted AVAX increases, which further weakens the incentive to commit for longer periods.
However, taking a step back, I believe the yield spread between long and short staking duration is an incentive design issue worth addressing on its own. It’s just that lowering the minimum duration makes the issue more pronounced. For that reason, it may make sense to adjust the duration-yield spread in the same upgrade as the minimum-duration reduction, so we preserve the desired stability/security properties while expanding the set of potential stakers.

[iJaack]

Great analysis @ericlu-avax — the yield spread point is the crux. If we are reducing the minimum without adjusting incentives, we are essentially subsidizing short-term validators at the same rate as long-term ones, which erodes the security premium.

An infrastructure concern I would like to point out is indexer and query layer churn, not consensus. Shorter staking cycles mean higher event frequency for validator registrations and expirations — subnet explorers and indexers will see significantly higher state-change rates, which matters for reorg-sensitive updates and delegation tracking accuracy. Worth factoring into the upgrade scope alongside the yield spread adjustment.

On the dynamic spread framing: a spread that responds to the observed distribution of active staking durations would maintain stability without locking in any specific incentive structure. As auto-restaking becomes the norm, the marginal validator duration will trend toward the minimum regardless — the spread needs to do more work over time.

[hinkavax]

I support the direction of ACP-273 and think the reduced minimum staking period should extend to delegators as well—with a modification to manage P-Chain load.

The case for delegator flexibility
The same arguments that apply to validators (responding to market conditions, capital efficiency, better UX) apply to delegators too. Liquid staking protocols like sAVAX exist partly because the 2-week lockup is too rigid for many users. Reducing this friction at the protocol level would improve native staking competitiveness against LST derivatives, better align Avalanche with competitor chains offering shorter unbonding, and enable more dynamic capital allocation.

On Open Question #1: Should the minimum delegation period also be reduced?
Yes, but tiered by stake size.
Given the 100:1 delegation-to-validator tx ratio and delegations already being 46% of P-Chain transactions, a blanket reduction to 48 hours would be rough on state growth. Instead: delegations of 1,000 AVAX or more can stake for as little as 48 hours, while delegations under 1,000 AVAX stay at 14 days. Small delegations drive the bulk of that 100:1 ratio, so keeping them at 14 days preserves most of the current load. Larger delegators actually need the flexibility and bring meaningful stake per tx. The threshold also concentrates rapid stake movement among more committed participants rather than dispersing it across dust positions.
1,000 AVAX is a starting point—open to other numbers if there's data suggesting a different cutoff.