Staking
Staking is the primary value accrual strategy of Defi 2.0 of the UPFI Network. It is designed and proven to be the dominant strategy for market participants; the most optimal method to stake, hold, and compound UPS over time.
Buying and staking can also be viewed as a method for passive investing and long-term strategy. You let your rewards and your initial staked amount auto-compound. Even when the market price falls below your purchase price, given a long enough time frame, the compounded rewards will outpace the drop in price.
When you stake, you lock UPS for 1 week to 2 years and receive xUP. Your xUP balance rebases up automatically at the end of every block. xUp is composable with other DeFi protocols such as minting synthetic assets, minting NFTs, and using as common currency in UPFI World... this will greatly reduce the supply of external UPS.
For example, locking UPS tokens for 2 years means you'll receive an equal amount of xUP. Locking in for 1 year means you'll get 50% and so on.
The Model like OlympusDAO (OHM) explain this through the expression (3,3), where (3,3) represents the most optimal play of staking between 2 separate parties. If everyone stakes, it creates a win-win situation that benefits everyone.
For example, Biden and Putin both have UPS and are clueless about what to do with it. If both of them decide to sell, their decisions drive the selling pressure. In contrast, if both cooperate to stake their UPS, it will create a beneficial win-win environment for both of them. This long-term focus strategy (3,3) excludes short-term speculators.Do not join us if you’re looking for quick flips and short-term gains, for those UPS, that game will not be seen.
- 1.Lock UPS tokens to receive xUP token
- 2.Stake xUP and xUP balance rebases up automatically at the end of every block
- 3.Note: You can choose to lock in UPS between at least 7 days and up to 2 years. The longer you stake UPS , the more xUP you will get.
Example:
- As written above, the maximum duration to lock is 2 years (720 days)
- If you lock 100 UPS for the max duration (720days), then you will get 100 xUP
- If you lock 100 UPS for a shorter duration, say 100 days, then you will get: 100 UPS* (100 / 720) = 13.8 xUP
You can see a very intuitive dashboard from an active user.
Unstaking xUP before the lock-in period ends incurs an early exit penalty of 50%. The early exit penalty lock UPS immediately to Treasury.
Why is a high penalty important? The xUP token is the governance token of UPFI Network in the Solana blockchain. It is generated by locking UPS tokens on the Staking. If governance allows unlocking easily, anyone can temporarily lock UPS to influence a decision and then divest from the platform. It's not good for whole ecosystem we are building. other DAO mechanism doesn't allow to unlock governance's token early. However, Upfi team offers flexible option to investors, early unlocking is allowed with a penalty of 50% on the staked + reward amount.
Last modified 1yr ago