# Staking

## What is staking?&#x20;

**Staking is the primary value accrual strategy of Dao.Finance.** Stakers stake their **FAO** tokens on [**Dao.Finance Website**](https://dao.finance/) 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.
