As we prepare to launch our Token Portal which is your gateway to interact with and view a multitude of information having to do with the Connect Tokens, Treasury Tokens and Governance, we are taking this time to do a write up to explain some of the systems.
Keep in mind as we go through this that some systems may change overtime as we upgrade our contracts and that some values may change as the DAO votes on any changes.
Our main goal when we develop anything regarding the token is keeping in mind that we want the power to propose changes to be in the hands of the community. We accomplish this through our Governance and DAO model. Anything that is a variable figure we want the DAO to have the capacity to control and influence, from the amount of staked tokens it takes to qualify for a Tier, to the interest rates charged in the protocol, to the overall supply and allocation of CNFI. Everything is able to be modified through a proposal-vote-implement system.
Our first section will cover the basics of staking your CNFI, claiming rewards, reinvesting, unstaking and the evolution bonus.
Why should I stake my Connect Tokens and what do I get?
- You become eligible for a weighted portion of the daily reward pool of CNFI tokens.
- You become eligible for a weighted portion of the daily minted Quarterly Treasury tokens.
- You can earn a bonus on your staking weight by committing to a duration of staking that is commensurate with the tier from the chart above
- You become eligible for the tier of Credit Card relative to your staked amount
- Your fees for any services from Connect Financial are determined by your staked amount
Is this all? No, but it’s a pretty good start for today.
What is “Weighted Portion”?
Our systems use a Weighted value for determining reward distribution, it is quite simply the amount you have in a pool compared to the total amount in the pool.
For example, let's say the staking system has a total of 1,000,000 CNFI staked in the pool, and you have 24,000 CNFI staked. Your weight is 24,000/1,000,000 or 2.4%. With a daily reward allotment of 5,000 CNFI, your reward would be 5000*2.4% or 120 CNFI per day.
How do I Stake my Connect Tokens?
To stake your CNFI Tokens you must:
- First connect your metamask wallet to the Staking dApp by clicking in the upper right hand corner on the Connect button and follow the prompts from Metamask
- Second, click on the Stake Button at the bottom of the screen
- Next, you will get a pop up window asking if you want to Deposit from Wallet or Reinvest, you will want to select Deposit from Wallet if you are opening a new stake, or adding to your current stake from your wallet.
- Reinvest will take your current unclaimed rewards and apply them to your current staked balance
- You will receive another pop up asking how many CNFI you wish to stake from your wallet. Please enter an amount you wish to stake. At this time you will also select if you wish to commit to a time period. This optional factor applies to Evolution Staking (chart below).
- Click Submit and Approve in Metamask
What is Evolution Staking
- Evolution Staking allows users to commit their Connect Tokens to a long term period of staking in exchange for an increased staking weight
- An increased staking weight only increases the amount the system uses in calculating your rewards
- Each Evolution Stake equates to 6 months - So a Silver tier would be 12 months to earn the bonus.
Every day you earn rewards from staking they are deposited into the smart contract for you to claim. You can view your unclaimed rewards by navigating to the staking page. From there you can click on Withdraw Rewards.
On the pop up you will see how much in rewards you have to claim and hit Withdraw. Again, follow Metamask commands to approve the transaction.
Lastly we will cover the process and mechanics behind unstaking. The process to unstake is fairly straightforward, but the implications are the important thing to take into account.
Are there any Unstaking Penalties? Yes, under certain circumstances, we have two different penalties for unstaking.
We have a base penalty for unstaking, which will be set to 0 initially, it will be up to the DAO to decide whether to raise it in the future. This penalty is set as a percentage of the amount unstaked.
There is also a penalty if you are earning an Evolution Bonus. This penalty is a multiplier of the amount of bonus CNFI you have earned since you started staking. Initially, this is a 2:1 penalty (2x multiplier).
For example, if you staked 200,000 CNFi for eight cycles and after 3 months you had accrued 1,000 CNFI from the bonus weight, and unstaked all 200,000 CNFI (and you had no unclaimed rewards), you would be penalized 2,000 CNFI on your unstaking.
In this same example, if you unstaked from 200,000 CNFI to only having 100,000 CNFI left, you would get penalized based on the amount of bonus you earned from the 100,000 you are unstaking and your new earning bonus goes down to the Platinum tier as you are no longer eligible for Black tier.
Unstaking penalties initially are redirected back to the Treasury and the DAO does retain control to change this in the future.
Some Frequently Asked Questions
What happens if I increase/decrease my stake at any time when I have a card?
- We actually have two separate systems here, one is the staking controller and one is our client portal backend.
- The staking controller is responsible for everything to do on chain, your staking reward calculations, holding your staked tokens, etc. When you open a stake from an address the Smart Contract stores certain information from the time you enter the stake. This includes things like, how much did each tier cost, how many tokens you staked, when you staked, did you commit to a time frame. If you stake or unstake the contract will reference the values from your individual record. If you cross a threshold in either direction, you will be adjusted by the contract if you qualify (going from 100k staked to 200k staked requires the 8 cycles for Evolution and not the 6 of Platinum).
- On the Client Portal side, we monitor your address for your staking balance and if you cross a threshold we will also update your fee structure for your card and services.
- If you remove your entire stake, your card and services will revert to the Basic tier structure.
What happens if the cost of Connect Tokens increases or decreases over time, will the tiers adjust?
- Our intent is to always keep the actual business of expanding our card users as our primary goal. We would not gatekeep this part of our business with the token tiers becoming effectively unavailable for the majority of people.
- The DAO retains the capacity to lower or raise the tier requirements at any time with no limit to the frequency of changes.
- When the DAO changes a tier requirement, the Staking Controller adds the new requirements to an array of tier requirements and the latest is now the effective tiers for any new stakers.
- Any changes to the staking tiers WILL NOT impact any existing users. I.E If you are Platinum with 50,000 CNFI and they raise it to 75,000 CNFI you retain your Platinum level in ALL aspects.
- Once every six (6) months, after your original stake date, you are able to rebalance your staking tiers against the current DAO If you originally staked 200,000 for Black and the DAO has lowered it to 175,000, you will be able to reset your tier requirements to 175,000 for Black Tier and remove 25,000 CNFI from your stake without losing your Black Tier. You will still be required to pay any applicable penalty if you unstake those 25,000 CNFI.
- These initial Tier costs are the maximum they can ever be set at is the only restriction we have placed.
If you have any questions, or scenarios we will be posting a Staking AMA in our discord so please join us there and we will update this document as necessary.
In Part II we will cover the Treasury and pCNFI tokens that you also earn by staking CNFI and can redeem for a portion of the protocols quarterly fees generated.
Join our growing community!
Discord : https://discord.gg/GYeWZ5uE4P
Telegram Announcements: https://t.me/connectfinancialnews
Official Website: https://www.connect.financial/
Client Portal: https://client.connect.financial/