Introducing Staking for CARD.CPXD Tokens
Holders can now earn rewards on their tokens
Today, we’re excited to announce staking for CARD.CPXD tokens. Users will be able to stake their CARD.CPXD tokens starting August 1, 2022. The staking of CARD.CPXD tokens is supported on layer 2, and users can stake without handing over ownership of the tokens. The staking rewards will be calculated through our off-chain analytics. Users will receive a reward equivalent to approximately 6% APR (0.48% per 518400 blocks) on a monthly basis for CARD.CPXD held in a depot.
Here are detailed responses to questions token holders may have:
What’s the vision behind introducing staking for CARD.CPXD tokens?
Cardstack believes that staking plays an important role in the development of a healthy Web3 ecosystem. Current staking solutions are limited to considering one or two data points, such as volume of tokens and period of staking, to determine staking rewards.
However, we believe there is an opportunity to use more data points when determining staking rewards — leveraging other signals from the participation of members into an algorithm that influences the staking reward. This is why we have developed an off-chain data analytics and computation protocol called Tally as part of the protocol stack. This protocol will allow us to roll out a new algorithm that extracts, transforms, and combines data about community contribution, token balances, and other digital asset ownership history. It then generates a Merkle proof, which contains the distribution summary for each staking period.
We will roll out a more advanced algorithm as part of the Card Rewards/Card Staking feature set using this infrastructure. Our goal is to allow the Cardstack ecosystem to have the most advanced community contribution rules, so as to incentivize activity that grows the ecosystem in many dimensions.
How is CARD token staking different from others?
Our token staking algorithm will evolve over time to take into account more signals from both on-chain interactions and off-chain contributions from stakers. This makes our staking different from traditional on-chain staking, which usually limits the signal to the amount of tokens held or the amount of time the tokens are held or locked.
CARD staking is comparable to retroactive airdrop campaigns like UNI airdrop and Optimism OP airdrop, where a more sophisticated set of data analysis is considered in the determination of the rewards and/or airdrops. What makes us different from those retroactive airdrops is that our system is recurring, which means that we can distribute tokens continuously while adjusting for degree of participation from the community. We will also improve the algorithm so that the tokens are directed towards the most beneficial activity for the overall ecosystem.
What is included in this first phase of staking?
We want to launch the first phase of staking by implementing a very simple algorithm similar to existing staking rewards that other projects offer. We will use the Tally system to analyze the balances within a layer-2 depot — a type of Gnosis Safe — and then determine the proportional staking reward that each wallet holder will receive according to the total amount of tokens available in that cycle.
This algorithm allows us to test the end-to-end infrastructure for on-chain data ingestion, off-chain data analysis, and on-chain Merkle drops for claiming the rewards.
Staking will be available in the Card Wallet app for users who have bridged tokens to the Card Pay Protocol on layer 2 (Gnosis Chain) and have a CARD.CPXD balance in their depot.
This is considered a soft launch, as we understand that most users have their CARD tokens on mainnet. We plan to offer this type of staking reward on other chains, including mainnet, once this layer-2 soft launch phase is over.
What are the risks involved in CARD token staking?
In this initial phase, we are providing our staking reward only to users of our layer-2 Card Pay Protocol, which in turn requires the use of Card Wallet, our iOS and Android wallet application. Card Wallet is designed to be a day-to-day use application that facilitates connections to dApps, initiates payment transactions, and manages claims of various types of rewards in the Card Pay and Card Reward ecosystem. It was not designed to be a vault for storing large amounts of tokens for ultimate security and persistence.
We do not recommend that users bridge a large amount of CARD tokens to layer 2 during this soft launch phase. We plan to deploy this same staking and claim mechanism on mainnet at a later date. When this deployment occurs, staking can be done using more familiar wallets such as MetaMask or secure hardware wallets like Ledger or Trezor. Until this happens, we recommend that community members bridge small amounts of tokens to help us test out the end-to-end analytics staking system. Once this phase is over, we will use the same algorithm and claiming mechanism and deploy them against balances held on other chains, including mainnet.
How are staking rewards calculated?
Staking rewards are calculated by looking at the balance within the depot on Gnosis Chain. That information is then fed into an analytic algorithm that will calculate a reward earned per cycle as a way to reward community members for participating in the Card Pay Protocol. The reward is then submitted via Merkle proof, which will enable the redemption of that reward using the Card Wallet. This will reflect a certain ratio of reward to the amount staked. The amount and algorithm is subject to change over time, so that we can balance security and fairness during this soft launch phase.
When will I start earning on my staked funds?
The starting block number will be announced on the 1st of August. It will be the first block of the day UTC.
When will I get the reward paid out?
The reward will become available shortly after 518400 blocks have passed from the 1st of August. At a 5s blocktime, this is 30 days.
How much will I get?
The equivalent interest rate will be 0.48% per 518400 blocks or 6% APR. 1M CARD.CPXD held for the full 518400 blocks would get 4800 CARD.CPXD as a reward at the end of the period. 1M CARD.CPXD held for 259200 blocks (half) should receive approximately 2397 CARD.CPXD.
How do I claim rewards?
The reward must be claimed manually through the Card Wallet application. The option is available on the top right of the Card Wallet app. You must also register a reward safe, if not already done, through the app. Anyone who has claimed airdrops in the past should have a reward safe already. You can find more information about the process here.
How do I get CARD.CPXD?
CARD tokens from mainnet can be bridged via our bridge. More on how to bridge CARD.CPXD tokens here.
Can I get rewarded on L1 with CARD?
No, staking is only available on Gnosis Chain and the CARD.CPXD held in your depot.
