Staking on the Soonaverse
Everything you need to know about our latest feature
The Soonaverse has delivered the world’s first Shimmer native token staking facility. The first token to utilize this new functionality will be the SOON token. Users will be able to stake $SOON to gain access to certain features on the Soonaverse and also receive yield in the form of additional $SOON.
To begin, users that have a staking value of at least 10 will be able to create NFT collections, create tokens, and upvote/downvote collections. Staking in this capacity works as an anti-spamming mechanism. This is a great start because it will remove the requirement for creators to go through the pain of acquiring a special badge before launching their collections.
Now let’s dive into more detail about how staking works.
What is Staking Value?
Staking value is equal to the amount of SOON tokens a user has staked times the rewards multiplier.
Amount of $SOON Staked * Rewards Multiplier = Staking Value
The rewards multiplier is calculated based on how long a user stakes their tokens. The tokens will be locked while they’re staked, so they cannot be transferred until the staking period ends. If one chooses to only stake for the minimum 1 week, then they will receive the base multiplier (1x). If they stake for the maximum of 52 weeks then they will receive 2x the rewards. The scale is linear, so if they staked for 26 weeks then they would get a 1.5X multiplier.
Staking value is used as the primary number that unlocks platform features and discounts. We needed to use this terminology because only using the amount of tokens staked doesn’t take into account the amount of time the tokens are locked. Staking value shows the full picture by using the rewards multiplier.
In addition, staking value is used to find out the percentage of the weekly rewards pool that will be distributed to a user. For example, if a user has a staking value of 10 and the total amount of staking value in the entire pool is 1,000, then that user will receive 1% (10 / 1,000) of the weekly rewards distribution. That means if two people stake 10 $SOON, but one locks for 1 week while the other locks for 52 weeks, the one who locked for 52 weeks will receive double the rewards each week.
How Does Staking Work?
Staking on the Soonaverse allows users to stake for a minimum for 1 week and up to 52 weeks. During the period that the tokens are staked, they are locked. The cool part is that the tokens are not locked in a custody solution. The Soonaverse has built in functionality that uses the time expiry (time lock) function in the Shimmer network. Put simply, when a user stakes, the tokens end up back in their wallet except they are locked and have metadata that third parties can reference to prove they are staked.
Users can go and see all their individual stakes in the Soonaverse UI. Plus everything is stored on Tangle for an immutable trail.
We’d like to emphasize that as soon as the time lock is finished, the tokens are unstaked and a user will no longer receive rewards until they restake. So be careful when only staking for 1 week, because you’d need to restake every week to receive rewards.
Every week on Thursday at 10:00am PST, the staking system will reference all staked tokens on the Tangle, calculate how many rewards should go to each address based on staking value, and distribute the weekly SOON token rewards accordingly. That means once a week users will have a new claimable amount based on their total staking value.
SOON Token Rewards
The Soonaverse will be distributing 6 million SOON tokens over the course of 3 years. The weekly rewards are higher in the beginning and then slowly taper off as time passes. Here is a chart that shows the emission schedule and how many tokens will be distributed each week:
As you can see, the first weekly distribution will be 95,388 SOON tokens, the second will be 94,473, the third will be 93,560, etc.
After the tokens are distributed each week, a user can claim them in the Soonaverse UI. The $SOON rewards will then be sent to the user’s wallet with a time lock condition that will unlock one year after the distribution event happened. This one year vesting schedule on reward distributions is independent from staking duration. All rewards must vest for one year. Additionally, these reward tokens will only be considered staked after the claiming process is complete, compounding your total stake over time.
Just to elaborate on the claiming process, the year long vesting that happens with all SOON rewards doesn’t start after the claiming process, it starts right at the distribution event. For example, if a user doesn’t claim their rewards for a week after they were distributed then when they do claim it’ll only be a 358 day time lock when the claimed tokens show up in their wallet. The only reason to claim each and every week is to maximize one’s total staked amount.
We created this graphic to help people better visualize the timeline of how staking works:
This has been a rigorous month of planning, building, and testing as we prepare for the new year. Something tells us that 2023 is going to be MASSIVE. Just a few more weeks to go, but in typical SoonLabs fashion…WE AREN’T DONE! Stay tuned for MOAR exciting developments and our One Year Anniversary on December 5th. Hope you will all join us to talk about staking and the upcoming year. Now, LET’S GO!
