HOW TO DO DUAL-SIDED STAKING ON FODL

6 min readFeb 24, 2022

The FODL Finance protocol gives you two options for staking FODL tokens. You can either choose to do single-sided staking or dual-sided LP staking on FODL which we will take a look at in this guide.

single-sided staking (users can lock their FODL token in the contract and receive the fully liquid derivative token xFODL back that can be later redeemed at the contract for the principal plus staking rewards)
dual-sided staking (users can provide their funds to liquidity pools that decentralized exchanges use to facilitate trading. The liquidity provided is represented in the form of SLP tokens which can be staked on FODL smart contracts

A total of 200 million FODL tokens have been set aside for both staking mechanisms over a period of 3 years since the project's inception. xFODL and LP stake position holders will be able to participate in the decentralized autonomous organization (DAO) resolutions equally based on their holdings. Three-fourths (3/4) or 150 million of these tokens have been allocated for dual-sided LP staking. This ensures the pools have enough liquidity for executing bigger size trades, reduces price volatility and arbitraging between the two pools.

The two original liquidity pools available are FODL/USDC and FODL/ETH.

HOW DO I OPEN AN LP STAKE POSITION?

Let’s take a look at how you would provide your liquidity to the FODL/USDC pool on FODL.

The first thing you have to do is go to the FODL user interface and choose the “STAKING” option in the top right corner of the home page.

Next, you will need to connect your wallet (MetaMask/Wallet Connect) which contains both your FODL and USDC tokens.

There, you can choose between the two pools (FODL/USDC or FODL/ETH) you want to provide liquidity. In our case, we will choose the FODL/USDC pool.

You will immediately be able to see what the current APY% (annual percentage yield) is for the chosen pool. The APY for the FODL/USDC pool at the time of writing this guide is 117.67% and is displayed on top. Proceed by clicking the blue “provide liquidity” button which will direct you to the SushiSwap LP webpage.

Now, you can enter the desired amounts you wish to supply. You will have to provide an equal value amount of both assets to respect the 50/50 ratio of this given pool. You may need to approve both transactions before finally confirming the position.

Gas fees may be quite high due to high congestion on the Ethereum network, so take this into account when coming up with your staking strategy.

By adding liquidity to this pool you will earn 0.25% of all trades on this pair proportional to your share of the pool. Trading fees are accrued in real-time as trading happens. Essentially after each trade is made the pool of rewards increases. The rewards you will get in exchange for providing your liquidity will be in the form of “SushiSwap Liquidity Provider” tokens or in short SLP tokens. The APY% and APR% (annual percentage rate) of these rewards are included on the FODL user interface.

SLP tokens act as a receipt of your ownership percentage of the pool. You can see how much (%) of the pool you will own in the bottom part of the box before confirming your position. In our case, this would be 0.02% if we supplied 1000 USDC and 5065.98 FODL.

The number of received SLP can be viewed on SushiSwap. This is not the end of the road on the reward side though. FODL Finance lets you take your SLP and stake them on the FODL platform for additional $FODL rewards. You will be able to claim these rewards from staking SLP in the form of $FODL tokens, but they will be partially subjected to a vesting period which we will discuss later on.

You can stake SLP tokens on the “STAKING” page.

When you wish to exit the pool, you have two things you can do.

you can un-stake your SLP on the FODL platform to get the $FODL rewards associated with SLP staking (you can claim the $FODL rewards without exiting the pool)
you can convert the SLP tokens back to the underlying assets provided
on SushiSwap ($FODL and $USDC in our case)

VESTING PERIOD

When you stake SLP on FODL, you will be able to claim one-third (1/3) of these rewards straight away every week. The other two-thirds (2/3) will be subjected to a vesting period of 12 months with a 6-month cliff. This means that 6 months have to pass by after the staking was started before the unlocking of these rewards starts to happen.

The unlocking goes on for an additional 6 months before you are able to claim 100% of the initial rewards received after the first week. The unlocking is linear and on a weekly basis.

So, this division of rewards happens weekly and is constant for the duration of holding an LP stake position.

Example:

You are entitled to “1200 FODL” as a reward for staking SLP
“400 FODL” can be claimed immediately
After 6 months you can claim “~133.3 FODL” every month or (~33.3 every week) for a period of 6 Months

Where can I claim these rewards?

You can claim these rewards on the “STAKING” page on the FODL platform.

PENALTIES FOR CLAIMING EARLY

Liquidity pools rely on long-term staking for maximal stability so providers are incentivized with different mechanisms to hold their position for longer periods. Penalties (withdrawal fees) are one of them.

During the lock-up period, you can claim your rewards by paying an early withdrawal fee proportional to the amount of time remaining from the lock. Claiming rewards before the full 12 months period is over, will put all non-vested rewards into this fee address for future DAO use.

RISKS

As with all staking and liquidity providing, there are some risks you need to consider before diving in:

price depreciation of your supplied assets
impermanent loss (this occurs when the price ratio of the deposited tokens changes after the liquidity provider deposits them. The more volatile the price of one of these tokens is the greater the risk of impermanent loss. For more information on this topic go here)

Hope this helped you in any way friend! Cheers!

“Disclaimer: This article is not trading or investment advice. The above article is for informational and educational purposes only. Please do your own research before purchasing or investing in any cryptocurrency or digital asset.”