Guide for Token Stakers

This guide explains how to stake your eligible tokens in the Osito Protocol to earn yield while improving protocol economics.

Quick Reference

As a token staker, you can:

  • Stake eligible tokens to earn yield based on borrowing demand
  • Reduce the "dumpable supply" of tokens, improving protocol economics
  • Earn yield denominated in BERA without taking on debt

Understanding Staking Rewards

Reward Sources

Stakers of eligible tokens earn yield from the following source:

  • Interest Paid by Borrowers: A percentage of interest paid by borrowers is distributed to stakers of the corresponding token

Rewards are distributed proportionally based on your stake relative to the total amount staked for that token. The more tokens you stake, the larger your share of rewards for that token.

How Staking Helps the Protocol

When you stake tokens, you:

  • Reduce the "dumpable supply" of tokens
  • Improve borrowing efficiency for all users
  • Contribute to protocol stability
  • Earn yield in return for this contribution

The mathematical formula for borrowing capacity factors in staked tokens:

dumpable_tokens = total_supply - pool_tokens - total_staked - total_deposited

By reducing dumpable_tokens through staking, you increase the global borrowing capacity.

Step-by-Step: Staking Tokens

Step 1: Connect Your Wallet

Navigate to the Osito Protocol dApp and connect your wallet. Make sure you're on the Berachain network and have eligible tokens in your wallet.

Step 2: Navigate to Stake Page

From the main menu, click on "Stake" to access the staking interface.

Step 3: Select a Token

Choose the eligible token you want to stake from the list. Remember, only tokens that meet the eligibility criteria (deployed by Panda Factory or Ramen with burned LP) can be staked.

Step 4: Stake Your Tokens

Enter the amount of tokens you wish to stake, then confirm the transaction. The interface will display information about current yield rates.

Step 5: Monitor Your Yield

Once staked, you'll start earning yield based on borrowing demand for your token. The dashboard will display your staked amount and accrued yield.

Managing Your Stake

Collecting Yield

To collect your accumulated yield:

  1. Navigate to the Stake page
  2. View your available yield
  3. Click "Collect Yield" and confirm the transaction

Yield is paid in BERA and can be collected at any time.

Adding to Your Stake

You can increase your stake at any time:

  1. Navigate to your staking position
  2. Enter the additional amount
  3. Confirm the transaction

Increasing your stake will increase your share of future yield proportionally.

Unstaking

To withdraw your staked tokens:

  1. Navigate to your staking position
  2. Enter the amount you wish to unstake
  3. Confirm the transaction

Token stakers can withdraw their tokens up to the point that total debt against a token = total max borrow for that token. If unstaking would cause the total borrowed amount to exceed the global maximum borrowing capacity, your unstaking may be restricted.

Risks and Considerations

Market Risk

The value of tokens may fluctuate based on market conditions. Consider the price volatility when deciding how much to stake.

Variable Yield

Staking yield is directly tied to borrowing activity for the token. In periods of low borrowing, yield may decrease. Conversely, during high borrowing activity, yield may increase.

Unstaking Limitations

There may be times when unstaking is limited due to borrowing capacity constraints. You should be prepared for the possibility that you cannot immediately unstake all your tokens.

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