🥩Staking & Rewards

This page explains the concept of staking within the Kuza framework.

Staking

$QE holders can choose to stake $QE for $REPO, which receives the Base Staking Rate (“BSR”). During Kuza's bootstrapping phase, this rate will intend to reflect the expected growth of the network.

The BSR will serve as a demand driver for $QE as well as a reference rate against which productive economic activity (liquidity provision, etc.) is measured. Furthermore, it acts as a foundation for $QE bonds to develop a yield curve across different maturities.

$REPO = $QE * Index (where Index is an increasing number based on the BSR)

Staking Warm-Up Period: To protect Kuza against flash loan attacks seeking to unfairly manipulate the staking mechanism, a warm-up period has been introduced. By staking $QE to receive $REPO, users:

• Earn rebases as normal for each epoch that occurs every ~8 hours.

• Can claim $REPO after 2 rebases.

• Can claim their original $QE amount if they wish to unstake before 2 epochs, but they will have to waive the earned rebases.

Rewards

Both "Cumulative Reward Paid" and "Reward Paid per Epoch" measure the amount of token reward paid each epoch and cumulatively. These are the same two graphs, one adjusted for inflation, but as long as inflation is controlled by our model, the data is almost identical. Token inflation is controlled so that its impact is negligible, regardless of the phase (1, 2, or 3) and the reward mechanism. Inflation should have a negligible impact on the token price.

Sustainability:

The protocol is designed for the long term and to be inflation-resistant. It will enable value creation with no fixed time horizon, increase its support for the community over time, and withstand a long crypto winter (thanks to the Treasury that covers months of interest).