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.
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:
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.
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:
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.
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:
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.
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.
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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