💸Staking

Staking is a contract that involves users to lock up a certain amount of cryptocurrency for a specific amount of time, in return the Users receive % rewards. Similar to getting an annual interest rate by keeping your money in the back. This process not only helps in validating transactions but also contributes to the robustness and stability of the platform's economic model.

How Staking Works:

Staking on the Definder platform allows token holders to earn rewards by depositing their tokens into a designated staking pool. These tokens then serve multiple functions: they help secure the network, provide liquidity, and enable holders to participate in platform governance. In return for their commitment, stakers receive rewards, calculated based on several factors that reflect their contribution to the ecosystem.

Key Terms and Concepts:

1. Tokens Staked (Ts): Represents the quantity of DFIND tokens that an individual commits to the staking pool. The size of the stake directly influences the potential returns, with larger stakes typically earning higher rewards due to increased responsibility in network operations.

2. Base Monthly Reward Rate (Pm): This is a fundamental percentage that determines the monthly rewards earned by stakers. Set at 3%, this rate applies to the tokens staked and serves as the baseline for reward calculations.

3. Volume Multiplier (Vm): An adjustment factor that increases the staking rewards based on the percentage of the total token supply staked. This multiplier incentivizes larger stakes, aligning the staker’s rewards with their relative contribution to the network's security and liquidity.

4. Staking Period Multiplier (Sl): Rewards long-term commitment by increasing the reward multiplier based on the duration for which tokens are staked. Longer staking periods signify a stronger commitment to the platform’s health and are thus rewarded accordingly.

5. Early Unstake Penalties: To maintain network stability, early unstaking (withdrawing tokens before the committed period ends) results in adjusted rewards. Stakers will receive rewards only for the complete months they participated, with a reduced rate, promoting longer staking durations for greater network reliability.

Updated Staking Reward Formula:

$$Reward (DFIND) = 𝑇𝑠 × 𝑃𝑚 × 𝑉𝑚 × 𝑆𝑙$$

Where:

• Ts: Tokens staked by the user.

• Pm: Base monthly reward rate (3% or 0.03).

• Vm: Volume Multiplier, based on the number of tokens staked relative to the total supply.

• Sl: Staking Period Multiplier, based on staking duration.

Volume Multiplier (Vm):

Encourages larger stakes with higher rewards. Based on the amount of token staked percentage of the total supply (Tt) of 210,000,000 DFIND:

Tokens Staked (Ts)	% of Total Supply	Volume Multiplier (Vm)
0 – 10,500 DFIND	0 – 0.005%	1.00
10,500 – 52,500 DFIND	0.005% – 0.025%	1.05
52,500 – 109,000 DFIND	0.025% – 0.05%	1.10
105,000 – 210,000 DFIND	0.05% – 0.1%	1.15
210,000 – 525,000 DFIND	0.1% – 0.25%	1.20
525,000+ DFIND	0.25%+	1.25

Staking Period Multiplier (Sl)

Rewards longer staking commitments with higher multipliers:

Staking Period	Proposed Multiplier (Sl)	Effective APR (%)
1 Month	0.75	3% × 0.75 × 12 = 27%
3 Months	1.00	3% × 1.00 × 12 = 36%
6 Months	1.15	3% × 1.15 × 12 = 41.4%
12 Months	1.50	3% × 1.50 × 12 = 54%
24 Months	2.00	3% × 2.00 × 12 = 72%

Example Calculation

Scenario:

• Tokens Staked (Ts): 50,000 DFIND.

• Pm (Base Monthly Reward): 3% = 0.03.

• Vm (Volume Multiplier): 1.10 (for 0.3% of circulating supply).

• Sl (Staking Period Multiplier): 1.50 (for 12 months).

1: Monthly Reward calculation

$$Monthly Reward (DFIND)= Ts × Pm × Vm × Sl$$

$$Monthly Reward (DFIND)= 50,000 × 0.03 × 1.10 × 1.50$$

$$Monthly Reward (DFIND) = 2,475 DFIND$$

2: Annual Reward

For 12 months, the total reward would be:

$$Annual Reward (DFIND) = Monthly reward × 12 = Annual reward$$

$$Annual Reward (DFIND)= 2,475 DFIND × 12 = 29,700 DFIND$$

1. Total Annual Return:

   • The annual reward for staking 50,000 DFIND tokens for 12 months would be 54 % annualized return with multipliers applied.

2. Sustainability:

   • With this structure, staking rewards remain sustainable for the over 3 year reconsidering the current Staking pool size (17'000,000 DFIND). Additional tokens could be added from the treasury if the staking program would yield great results.

3. Controlled Inflation: By adjusting Pm, Vm, or Sl, the staking program can remain scalable and adapt to market demand. Therefore the terms that are offered at the current are subject to change in the future.

How Rewards Are Calculated

1. Base Monthly Rate (Pm):

   • The staking reward rate is 3% per month. This is applied to the number of tokens you stake.

   • The longer you stake, the higher your rewards, thanks to the Staking Period Multiplier (Sl).

2. Volume Multiplier (Vm):

   • The more tokens you stake, the higher the multiplier you earn.

   • For example, staking 100,000 DFIND tokens gives a 1.20 Vm, boosting your rewards.

3. Staking Period Multiplier (Sl):

   • This multiplier increases based on the length of your staking commitment.

   • For example, staking for 12 months gives a x1.5 Sl, while staking for 24 months gives a x2 Sl

Early unstake

If you decide to unstake before the staking period ends: Your rewards are calculated only up to the last fully completed month.

• • For example, if you chose to stake: -50'000 DFIND tokens -12 months period -Early unstake after 7.5 months (only the first 7 months will count for rewards)

Early unstaking formula: -Ts: Tokens staked by the user. -uPm: Early unstake % (1.5% or 0.015). -Vm: Volume Multiplier, based on the number of tokens staked relative to the total supply. -Cm: Complete months Its complete 30 day intervals from the moment the token has been staked.

Total Early Unstake formula = Ts × uPm × Vm × Cm Total Reward (DFIND)= 50,000 × 0.015 × 1.10 × 7 Total DFIND Reward on Early unstake = 5,775 DFIND