Staking

What is staking?

Staking is the primary value accrual strategy of Dao.Finance. Stakers stake their FAO tokens on Dao.Finance Website to earn rebase rewards. The rebase rewards come from the proceed from bond sales, and can vary based on the number of FAO staked in the protocol and the reward rate set by monetary policy.

Staking is a passive, long-term strategy. The increase in your stake of FAO translates into a constantly falling cost basis converging on zero. This means even if the market price of FAO drops below your initial purchase price, given a long enough staking period, the increase in your staked FAO balance should eventually outpace the fall in price.

When you stake, you lock FAO and receive an equal amount of sFAO. Your sFAO balance rebases up automatically at the end of every epoch. sFAO is transferable and therefore composable with other DeFi protocols.

When you unstake, you burn sFAO and receive an equal amount of FAO tokens. Unstaking means the user will forfeit the upcoming rebase reward. Note that the forfeited reward is only applicable to the unstaked amount; the remaining staked FAO (if any) will continue to receive rebase rewards.