I love the idea, but 5% is too low IMO. I think I would want 10% minimum before I'd vote for it, and I'd really prefer 15%.
Also, I think things should be taken a step further, regardless of the %. Since most people are doing this to fund other purchases in game anyways (and that's really the only type of cash out we care to aid in anyways), 100% of the SPS should be burned and converted to X% DEC. So we force the use of the flywheel on top of the penalty.
I suggested an amendment to completely disregard any unstaking of SPS, and rather, allow players to burn SPS for DEC out of their claimable SPS rewards only, before claiming it and having it get auto-staked.
This will make the flywheel much more accessible, and I think we would see a big increase in burning of SPS if this was allowed so players don't have to wait for unstaking and can burn before claiming.
Clay created this in the Draft Proposal Suggestion thread if you want to take a look:
https://discord.com/channels/447924793048825866/1169932884807794748/1176926508690980885
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I personally think 5% is reasonable, but we'll see what the community thinks, generally it seems more people are interested in a higher penalty though.
In terms of burning it into DEC, it would only make sense if it's DEC-B perhaps? Otherwise they can just sell the DEC as well