🪙Staking
All information related to staking $ZEX
Last updated
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All information related to staking $ZEX
Last updated
$ZEX’s staking framework establishes a foundation for governance through a vote-escrow model. Staking also rewards those users that are most committed to the protocol's governance and long-term growth through boosting mechanisms.
Zeta's governance framework builds on the innovative vote-escrow model pioneered by Curve on Ethereum by introducing 2 new concepts. Firstly stakers are exponentially rewarded for the duration of their lock - therefore more heavily allocating power to those who are committed for longer. Secondly we introduce the ability for stakers to vest and unlock their tokens gradually - providing users more liquidity and limiting the supply shock on the ecosystem caused by mass unlocks.
To enable this, our tokenomics will feature 2 components:
$ZEX: This is the governance token of Zeta. It is a transferable SPL token (Solana Program Library, i.e., Solana’s standard for fungible tokens), which is distributed to users via airdrops and incentives for using the protocol.
gZEX: The governance score gained from staking $ZEX based on duration and amount of stake. This is a non-transferrable score across accounts. gZEX represents the long-term commitment of a user and, as such, provides proportional governance rights and boosted incentives.
Users will be able to stake $ZEX for a predefined period of time (up to 4 years) to receive gZEX. The amount of gZEX received for staking $ZEX will be determined by the amount of $ZEX token locked and the staking duration, according to the following formula:
Staked $ZEX has two distinct states - locked and vesting - allowing users to manage their governance score (gZEX) and their benefits:
Locked state: In this state, your gZEX and the associated governance benefits remain constant.
Vesting state: Vesting unlocks staked $ZEX into liquid $ZEX over a linear unlock period. Your gZEX score also linearly decays.
Example: Let’s use Staking Account 1 (SA1) to explain these states. SA1 has staked 1000 $ZEX for 300 days to gain ~100 gZEX.
Within the locked state, there are two main actions:
Increase your additional number of staked tokens and/or the staking duration into the same staking account. This is only achievable in a locked state.
Example: SA1 has staked 1000 $ZEX with a staking duration of 300 days. Say if they wish to stake an additional 100 $ZEX but with a staking duration of 320 days to SA1, the entire account will then have a staking duration of 320 days. This means the total $ZEX staked will now be 1100. Furthermore, their gZEX will also increase by ~20.
NOTE: If you wish to stake more $ZEX for a shorter duration, this is achievable by creating a new staking account.
Vest (unlock) your tokens and convert it into $ZEX.
Example: SA1 has a staking duration of 300 days. They decide to start vesting, and now SA1 is in the state of vesting, with a vesting duration of 300 days - equal to the staking duration in the locked state.
During the vesting state, your gZEX will decrease over the vesting period as it converts into $ZEX, which can be withdrawn to your wallet. In this state, your $ZEX is vested proportionally per day (which is 1 vest epoch), which can be withdrawn to your wallet.
Example: SA1 has staked 1000 $ZEX with vesting duration of 300 days. This means that SA1 will be able to withdraw 3.33 ZEX / Day over the next 300 days, as it unlocks on a daily basis.
Your ZEX will be fully vested (unlocked) when the vesting duration reaches 0.
Clicking on the <Lock> button will stop the vesting process, whereby the remainder of the vesting duration will be the new staking duration.
Example: SA1 has a staking duration of 300 days and after 30 days of vesting decides to re-lock their account. This means they are now locked with a staking duration of 270 days.
Boosting represents another critical benefit of staking $ZEX. By holding gZEX traders will be able to access additional incentives, amplifying their rewards based on their total gZEX. The objective of boosting is to distribute greater incentives to traders who are also signalling long term commitment to the protocol and participating in governance via staking.
A user’s share of these additional incentives will be determined based on a user boost score, calculated as follows:
Where score above refers to the users score in the incentive program at large - for example their Z-Score.
From Epoch 6 stakers are also eligible to fee tier qualification based on their gZEX holdings at the time of trade. For more information on fee tiers for stakers check out Fee Tiers.
