The Benefits of Staking Your OGY Tokens

July 6, 2022

So you’ve gotten your hands on some OGY utility tokens. Maybe from MEXC or Sonic or Bitrue. Congratulations! Now you can be involved in the governance of the ORIGYN Foundation, helping shape our roadmap by voting on proposals from the community and from our leadership team.

How? That’s where staking comes into play.

Simply put, anyone who wants to participate in ORIGYN’s governance must stake their OGY tokens and lock them up for some period of time. The core reason for this is to protect the platform from short-term majority driven proposals. If, say, an OGY whale voted to use up all the liquidity to buy the Mona Lisa (thus bankrupting the foundation), well, they could if this type of safeguard doesn’t exist.

The right to vote will allow you to participate in making important decisions, including what entity may become a Node, deauthorizing other Nodes, the exchange rate of OGY to another token (eg., XDR) and a slew of network proposals that will come in.

The Basics

Voting? Governance? Rewards? All combined, these concepts can be difficult to grasp at first glance. However, when broken down, staking can be both simple and also extremely beneficial for token holders. So let’s begin with the basics:

  • What is staking? Staking is the process of locking your OGY tokens for a set period of time to earn OGY for the work you do in governing the ORIGYN network.
  • What are the main benefits of staking OGY? You can participate directly in the decision making process at ORIGYN while your tokens are staked. The best way to demonstrate long-term engagement with ORIGYN is by staking your OGY, which enables you to vote and participate in governance.
  • How do you stake? For step-by-step instructions on how to use the Governance Dashboard to stake your OGY, click here.
  • How do I vote? Within the next few weeks, you will be able to begin voting manually on open proposals on our Governance Dashboard. By default, each new stake is set to vote the same way as the foundation. However, you are also free to change this “follow” to another stake. (Note: If you remove your follow and do not manually vote, you will not receive rewards). Rewards are granted for each day that you vote or follow someone who votes on at least one proposal. Future reward plans are subject to governance and the vote of the ORIGYN Network.

The Details

Much of what you need to know about staking is covered by the basics. For a more detailed understanding of staking, learn about the specifics of reward multipliers and rates below.

Reward Multipliers

The minimum amount of time you must lock in your OGY tokens to gain voting power is 12 months. The current maximum staking period is 48 months.

Why would you stake for 48 months instead of 12 months at a time? Higher rewards. Staking for a longer period of time increases your reward multiplier. Briefly, here’s how that works:

  • With a lock period of 0–364 days (12 months), you have a 0.00 reward multiplier.
  • With a lock period of 365–729 days (24 months), you have a 1.00 reward multiplier.
  • With a lock period of 730–1094 days (36 months), you have a 1.25 reward multiplier.
  • With a lock period of 1095–1459 days (48 months), you have a 1.50 reward multiplier.
  • With a lock period of 1460+ days (48+ months), you have a 2.00 reward multiplier.

To help you visualize what this means for your rewards, we’ve created a nifty tool called a Staking Simulator to show how your rewards will grow and shrink as you change your time horizon.

Unstaking Your OGY

Eventually, you may want to unstake your OGY to gain liquidity. To do so, you will have to choose to dissolve your locked position (new stakes do not dissolve by default), thereby beginning the countdown to when your OGY is available to withdraw. You will continue to receive rewards according to the logic above as your position dissolves.

Here’s an example:

Say you’ve just locked in your OGY tokens for 24 months and also choose to dissolve today. This means your tokens will be available to withdraw in 730 days (24 months). During this time, you’ll continue to receive rewards:

  • For the first 365 days = rewards multiplier of 1.00 + voting rights
  • For the second 365 days = rewards multiplier of 0.00 (because you are now a year away from unlocking, so you have dropped your rewards multiplier down a tier) + NO voting rights (since you need OGY locked for at least a year to have voting power)

Note: So, if that illustration wasn’t clear, it’s not a great idea to stake for just a year and start dissolving immediately. You won’t get any rewards or voting ability in this scenario.

Rewards Rate

Your rewards rate is not only based on the time horizon of your stake, but factors in the total amount of OGY that exists across everyone in the universe. This is because your OGY tokens grow more or less valuable depending on the total amount of OGY. Thus, the rewards rate is dynamically determined by the total amount of staked OGY as a percentage of total OGY.

(Again, the Staking Simulator is a great way to visualize how this all works.)

At token genesis, 10 billion OGY were minted. Currently, ORIGYN determines that the ideal staking ratio is between 60% and 80% of total tokens.

In order to reach and maintain that range of staked OGY, we will increase rewards if less than 60% of OGY is staked (ie., 6 billion OGY), and also lower rewards if more than 80% are staked (ie., 8 billion OGY). This logic has been built into the reward canister and will occur automatically.

The staking reward can only go as low as 2% and has a cap of 20%. In a single day, it can only change by 10 basis points.

It’s All Math

We know it’s a little complicated, but if you’ve ever staked other tokens, you will find that the process isn’t dissimilar. We’ll have more documentation coming soon to illustrate staking further, but we hope this helps answer some questions that you may have about staking your OGY today.

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