BonFi ($BNF) Liquidity Staking
Learn more about $BNF Liquidity Staking!
On Thursday (5th November 2020), we will release BonFi Liquidity Staking in partnership with Ferrum Network. But before we do, we wanted to provide critical information on the structure, rewards, and requirements of BonFi Liquidity staking. Enjoy!
BonFi Liquidity Staking takes the time-based locking mechanism to the next level by allowing participants to stake one token while earning rewards in a different token. This distinction may seem simple, but the implications are substantial.
When Uniswap liquidity providers deposit liquidity (ETH + BNF) into the Uniswap liquidity pool, a special type of token, known as liquidity tokens (Uni-V2), are minted to the contributor’s address. When traders finalize their trade on the Uniswap exchange, a 0.3% fee is distributed pro-rata to all liquidity providers (LPs) at the moment of the trade.
For an LP provider, you are now double incentivized to maintain your LP position. Not only are you earning fees on each trade made on Uniswap, you are also earning additional BNF rewards!
We offer constant time-based returns based on staking time. In other words, the longer you stake, the higher the rewards. That may seem simple, but BonFi Liquidity Staking is unique in many ways.
First, it is pool based; it is a group activity with multiple contributors for each staking contract.
Second, it is flexible; you have the option to withdraw early, stake until full maturity, or withdraw somewhere in between. However: leaving early comes at a cost.
Thirdly, it offers double rewards, not only are you earning fees on each trade made on Uniswap, but you are also earning additional BNF rewards!
Finally, it is strategic; if you stake until full maturity, and others in your pool withdraw early, you will receive a portion of their rewards that are unclaimed.
We will publish a full “how-to stake” guide on Tuesday, but overall it is quite straightforward. First, you add liquidity (BNF + ETH) at Uniswap for the BNF-ETH trading pair. Then you connect your ERC-20 wallet to the staking contract. Then you deposit your UNi-V2 tokens into the pool. Afterward, you can stake until you wish to withdraw. When you choose to withdraw, your principal and rewards will be distributed back to your wallet. Easy peasy!
The Legendary Staking Pool
The terms of the Legendary Staking pool (rewards, lengths, minimum contribution, etc.) are detailed below:
- Rewards: Uniswap Trading Fees + 105% APY
- Full maturity: 60 days
- Early withdrawal starts: 30 days
- Early withdrawal rewards start at 40% APY + Trading Fees
- Pool size: 50000 UNi-V2
- The time period to contribute: 7 days
- Minimum amount staked: 250 UNi-V2
Requirements for Staking
Please note the following requirements:
Metamask: BNF Liquidity Staking requires the ERC-20 wallet extension Metamask, which will automatically link to our staking contracts. This wallet will be used to contribute your token to the liquidity pool. It will also be used to distribute staking rewards upon withdrawal.
250 Uni-V2 Minimum: to stay consistent with Social Mining, the minimum amount to stake is 250 UniV2 Tokens. There is no maximum.
Keywords and Unique Features
BNF Liquidity Staking has some unique features such as double rewards, early withdrawal, forfeited/redistributed rewards, and additional rewards for full maturity.
Participants are double incentivized to maintain their LP position. You can earn fees on each trade made on Uniswap, and earn an additional 105% APY!
Limited Time to Contribute
Once the staking pools are opened, you have a limited amount of time to contribute your BNF tokens. After the time expires OR the liquidity pool is full, contributions will close forever. A progress bar will indicate the status of the liquidity pool.
Participants need to stake until full maturity to receive maximum staking rewards. The date and time to enjoy maximum staking rewards are highlighted so that you will know the sweet spot for token withdrawal. In addition, if you stake until full maturity, you will likely receive additional rewards from those who withdrew early.
BonFi Liquidity Staking offers an early withdrawal option for flexibility. Early withdrawal will have a date and time assigned to know precisely when you can withdraw early.
Although rewards are lower for early withdrawal, they increase linearly every day — up until full maturity. In other words, if you withdraw after the early withdrawal date and closer to full maturity, rewards will be higher, but still less than full maturity.
Forfeited and Redistributed Rewards
BonFi Liquidity Staking pools are like a pie. A predetermined amount of Uni-V2 tokens are put into the liquidity pool before launch, and this number will not change. If participants leave early, the pie does not shrink; they’ll receive fewer rewards while remaining participants will receive more. Therefore, participants who continue to stake will earn more than the maximum APY. They will also earn the share of rewards left by those participants who stopped staking early.
In this sense, BonFi Staking offers an element of strategy, suspense, and gamification.
Next, we will update the BNF Staking website with a countdown until the Legendary staking pool opens. We will also provide a step-by-step guide explaining how to start staking.
Then we will open up the Legendary Staking pool!
We look forward to officially launching liquidity staking in the coming days!