A deep dive into tokenized stakes on PRüF
PRüF EO staking is an innovative protocol that gives early adopters access to a special staking pool, potentially valued at $16m or more. When a user stakes using the EO protocol, they receive an NFT that represents their stake. The stake token includes information about the staked amount, rewards rate, time lock period, most recent rewards taken, and the maximum allowed stake.
When staking begins, top-tier rewards rates will initially be available to all stakers. Then, in as little as a month, the minimum stakes required to reach those reward tiers will be increased to their regular amounts. This will give early adopters the opportunity to secure high reward stake tokens, even when staking smaller amounts of PRüF. We hope that this will help to motivate and evangelize holders as the development and rollout of other features of the protocol progresses.
Let us consider, for example, an EO staking tier featuring an ü10,000 minimum, 20% APR, ü1,000,000 maximum stake amount, and a 180-day stake period. Future project phases may require a much more significant initial stake to access this reward tier in the EO staking protocol. Some of the highest reward tiers may be discontinued altogether, or their lock times significantly increased.
Since each stake is tokenized, and the amount staked on a token can be increased up to a maximum of ü1,000,000, early adopters have the opportunity to earn exceptional rewards. For example, a holder of ü40,000 might create four ü10,000 stakes for 180 days, at 20% APR. She may prefer this to a single ü40,000 / 20% stake because the individual stakes could later be increased to their maximum values. In our example, a 20% APR stake secured for ü10,000 could later be loaded to its maximum of ü1,000,000, yielding a payout of up to ü200,000 annually for each stake. This would deliver 4x the rewards of a single fully loaded stake token.
Because the stake tokens lock in the initial rewards levels and can be transferred, the stakes themselves have value as an entity. Thus, stake tokens that give holders access to exclusive high rewards that may be harder (or impossible) to reach in the future may cause these high reward stakes to be sought after by people that wish to earn higher staking rewards without the higher barrier to entry.
Because the stakes themselves are tokenized and can be transferred, bought, and sold, we expect a robust secondary market for tokenized stakes.
The EO Staking pool is expected to last at least two years.
As the staking pool is distributed and gets close to depletion, earning can be frozen when the last fair distribution of rewards can be made with the remaining balance. Barring this control, the contracts will revert to a semi-fair, first-come-first served distribution that will favor smaller rewards claims. This means that staking can work in a fully decentralized way without intervention from the team.
Stakers can earn more.
Stakers can fold earnings back into their stake up to the maximum allowed stake on their token. By growing their stake in this way, a full percentage point or more can be added to their annual rewards earnings, over and above the stated APR.
For a more general overview of staking on PRüF, see this article.