The CUDOS token is finally available to the public!
After years of hard work and research, the CUDOS token can now make its way into your wallets. However, CUDOS tokens merely sitting in your wallet might not be the best place for them. We’ve thought of a way you can make your tokens earn rewards and work for you right from the start -through Staking.
Staking enables token holders to earn fantastic rewards based on the vesting periods they choose. Staking tokens for longer periods helps create stability in the network and is beneficial for all parties, and the rewards are designed to incentivize this. The bonuses being put in place for staking tokens are designed to incentivise token holders to hodl and rewards hodlers with the strongest hands appropriately.
Initially, there will be 2 ways to stake your CUDOS tokens: Staking either to become a validator or by delegating your stake to a validator. The validator network and delegated staking will be launching very soon. We are however implementing a pre-staking mechanism to allow all CUDOS token holders to begin earning rewards even before that comes out!
Validators are able to earn rewards in two ways: The first is through the staking rewards in our staking programmes. Token holders seeking to become a validator will need to stake a minimum of 2,000,000 CUDOS and meet certain conditions, but will earn staking reward on this stake. The rewards make up around 45% of the entire ecosystem & community development allocation. That reward figure will slowly decrease each year, so validators who join earlier will benefit the most from the rewards. The staking rewards programme is set initially to run for 10 years to help promote and grow a healthy economic environment for the CUDOS token.
On year 1 the staking rewards distributed will be 306,000,000 CUDOS, year 2 will be 272,000,000 and year 3, 238,000,000. The reward numbers decrease until 68,000,000 in year 5, and will stay at that level for the remainder of the ten years. Token holders, via governance, will be able to vote to change this after year 2. There will be an initial limit to 100 validators, with no limit on the number of users delegating their stake.
Although staking rewards will decrease over the years, we are expecting the overall rewards received by validators to go up. This will be achieved with the fees that validators will receive from the layer 2 work they perform. These rewards will be proportionally distributed amongst all the users staking their CUDOS token according to size of their stake. That means, if on year 1 there are only 10 users staking 2,000,000 CUDOS each, each one will receive 30,600,000 each in staking rewards at the end of the first year. We are expecting around 70%-75% of the circulating tokens to be staked at all times. Withdrawing staked tokens takes 21 day due to security reasons.
With those staking levels, the base rewards for each are 10% of the staked CUDOS. However, staking and delegated staking in the CUDOS platform allows token hodlers to receive a bonus on their stake, depending on the length of time the tokens are locked up for.
The bonus rewards are as follows:
- 3 months lockup: 25% bonus
- 9 months lockup: 50% bonus
- 18 months lockup: 100% bonus.
Validators will earn a fee (set by the validator) on the staking reward of the users delegating their stake through them. The fee initially defaults to 2% but can be changed at any time. Service providers will be incentivised to distribute and set up more than one validator, to give all validators similar weights and chances to attract delegated staking from other users. A possibility we’re currently exploring includes the CUDOS team delegating part of their tokens allocated for validators to delegate stake through them, a certain quantity for each validator.
For more information regarding staking, and how you can let your CUDOS tokens work and earn for you, please join our community via the links below and get in touch!
