Bonfida Announces On-Chain Staking
Bonfida is excited to announce that on-chain staking is back again! Staking is a way to earn rewards by committing your crypto assets to support a blockchain network. Staking involves “locking up” or delegating a portion of your tokens for a certain time frame, thus locking them out of circulation, to assist a blockchain project you are supporting. The reason your crypto earns rewards while staked is because the blockchain puts it to work. These rewards are typically in the form of additional tokens. Think of it like an investor that invests their money in a bank and in exchange they will earn rewards, namely, “interest”. Essentially, staking benefits both the stakers and the blockchain network.
This article will discuss some of the key points concerning the staking process at Bonfida.
What is the duration I have to stake my funds for?
As mentioned, staking involves “locking up” or delegating a portion of your cryptocurrency for a certain timeframe. The staked tokens can be locked for a minimum period of 7 days (1 week) and a maximum period of 1095 days (3 years) or any duration in between.
Staked funds cannot be unlocked prematurely, thus, when funds are staked for a chosen duration, they will remain locked for that period. After the timeframe has lapsed, you can unstake your tokens at any time you want.
It is important to note that when your set staked period ends, it may not elicit the immediate release of your earned rewards. For example, if tokens are staked for a minimum period of 7 days, the earned rewards will only become claimable in 365 days (1 year) from the date they were earned. On the other hand, if tokens are staked for a maximum period of 3 years, the earned rewards will immediately become claimable on the day they are earned.
The ‘duration multipliers’ and how they work
Bonfida will reward stakers who are willing to stake their tokens for the longest time frame possible. Long-term stakers are rewarded as it best aligns incentives and shows that the wallet-holder is willing to invest in the long-term growth of the network.
This is where the ‘duration multipliers’ come into play. A duration multiplier is a multiplier that will be added to the rewards of staked tokens that are vested for a 1 year or longer (1. x multiplier). So, if a staker decides to vest their tokens for 3 years, they will receive a 3x multiplier on their staked rewards.
The duration multiplier will also be applied to voting/governance at Bonfida. Stakers will receive gFIDA, a governance token, equivalent to the amount of FIDA staked, which permits voting/governance at Bonfida. This will be determined by the Bonfida DAO, enabling the community to vote with gFIDA.
Rewards for on-chain staking
Staking rewards are derived from the staking contract. Stakers will earn a portion (%) of the daily network transaction fees that are generated from all the network protocols.
Remember, as discussed, there is a lock time on rewards earned, which is based on the time the stakers lock their funds in the contract.
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Start earning interest on your FIDA at staking.bonfida.org
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