Hold-incentive staking can work in two possible patterns.
Option one, which we used to implement in our former staking campaign
, is the following: users deposit their tokens to the staking smart contract, for which they are later being rewarded with the same kind of token. The precise amount of a reward depends on how the staking pool is implemented: usually, there is a particular number of tokens apportioned for this process. If there are 1,000,000 tokens allocated for 10 months of staking, then each month, a certain number of token holders will be having 100,000 tokens distributed among them proportionally to how much their original stake was. As a simple example, if there is an only token holder in the whole pool, this person will be acquiring all the 100,000 tokens as a result of staking. The rewards aren’t distributed equally among the stakers, but rather depending on how many tokens they have staked. If, for instance, user A staked 10 tokens while user B staked 30, this means that user A will eventually acquire 25K tokens at the end of the staking event, while user B will enjoy 75K new tokens.
Usually, at the dawn of any staking event, the inventors’ annual percentage yield (APY) goes through the roof, which is absolutely normal until more people join the ecosystem and start staking as well, thus incenting the system to distribute stake net worth accordingly.
While explaining staking, it’s essential to understand that a smart contract is a flexible tool. Therefore, the terms of any given staking can vary depending on the hosting platform and are always custom. The length of staking, just as the rewarding coefficient along with the events’ terms, are variable units.
Option two, which Stobox adopts within current STBU staking
, suggests using pools that imply a certain (limited) amount of seats and a particular staking amount (10, 25, 50 and 100 thousand STBU). In order to take a seat, you should make sure to have a required amount of STBU, which you are going to stake. The interest you are going to receive will depend on the pool you choose, which also serves as an instrument of generating the demand for a token. If you wish to withdraw the body earlier than the selected pool expects you to, you’ll have to pay the 5% or 10% penalties. Early exit fees are implemented to incentivize the users to comply with the staking rules instead of withdrawing their tokens at any given moment.
It's possible to stake tokens of different types. For instance, in February, Stobox conducted STBU staking
for the Stobox Utility Token holders on our Cryptocurrency Exchange
. Back then, an average general reward of the whole pool would constitute ±400 STBU per hour, and each user's personal reward would be determined by the proportion of the pool they held.
For the platform to conduct hold-incentive staking, it’s essential to provide certain predictability in the utility tokens price. It is because any unexpected token behavior (like a sudden fall in price) can be bad for the predictability of the platform usage, as the main reason to buy tokens in advance would lie in the hope to be using them after the ecosystem goes live. If the tokens’ price isn’t stable or falls drastically, such an incentive is gone. Staking, thus, is the right instrument to keep the price steady and a great tool to attract potential users.
Summer 2021 has been proving to be unusually positive and fruitful for Stobox: not only have we awarded the devoted community members with share dropping
, but also raised the STBU balance of every Stoboxian who participated in a fellow contest
. Currently, we are starting a brand new Staking 2.0 Program
. The following staking event we are holding has a number of advantages compared to its previous self — you can read more about them in our latest announcement
The first described process of crypto staking (validator staking) is possible thanks to the algorithm called Proof of Stake (PoS). Let's see what this is and how this mechanism works.