Staking

What is Staking?

Staking is a process in the general context of smart contract protoocls, where users participate in by locking tokens in a smart contract to earn protocol rewards. The Bank of Cronos native token is a reserve currency which derives value based on the value of assets in the underlying treasury (BOC Treasury contract). BOC staking incentivizes BOC token holders to stake their BOC tokens to earn BOC token rewards.

$$BOC_{distributed} = BOC_{totalSupply} \times rewardRate$$

$$rewardYield = BOC_{distributed} / BOC_{totalStaked}$$

$$APY = ( 1 + rewardYield )^{1095}$$

The APY is calculated from the reward yield (a.k.a rebase rate) using the above equation. It raises to the power of 1095 because a rebase happens 3 times daily (~8hrs). Consider there are 365 days in a year, this would give a rebase frequency of 365 * 3 = 1095.

Currently reward rate is set to 500 (0.05%), see below example of staking distribution

$$BOC_{distributed} = 6659.315689937 \times 0.000500$$

$$BOC_{distributed} = 3.327993848$$

Example of a rebase transaction (https://cronoscan.com/tx/0x946218923a37675de4a949abf7a477bc374c69269e943227366a51f5964d417f)

The above BOC amount is distributed to all BOC stakers 3 time daily (~8hrs). Note that the reward rate is subject to change by the protocol. The goal is for the reward rate to be governed by the community.