GYSR: Staking / Unstaking Mechanics
We’ve been receiving a lot of great questions about the mechanics of how a Geyser unlocks rewards and when they’ll be available. Keep reading if you want to learn:
- What happens through staking and how you accrue a share in the pool
- What happens when you unstake and the consequences of unstaking at different time
- How to maximize your rewards based on your investing profile
Staking in a Geyser simply means you are placing an ERC20 token inside of the contract. You can stake once, you can stake twice, you can stake as many times as you’d like. Each stake is accounted for independently and doesn’t affect the others.
The moment you stake in a Geyser, you start accruing “share seconds”. Share seconds are the key to understanding how your rewards are calculated in a Geyser. The formula for counting share seconds is pretty straightforward:
Share Seconds = Amount Staked x Length of Time Staked
And share seconds determine the portion of of available rewards you’ve earned . Your rewards calculated based on how many share seconds you’ve accrued, not just the amount staked.
That means that if two people stake the same amount, but one of them stakes for twice as long, that person will have twice as much of a portion of the rewards pool. And the value of staking for longer periods of time is why we invented the boiling period.
The Boiling Period
The boiling period is the time before a Geyser begins unlocking rewards. As an example, if a Geyser is going to unlock rewards over a year starting on December 11th and the Geyser is created on December 1st, then there is a 10 day boiling period.
During this time, you can stake your funds and start accruing share seconds. This means that staking during a boiling period puts you ahead of people that only stake once the Geyser has gone live. It gives you a share second advantage and is a great way to get an edge on an exciting token!
There are some caveats to the boiling period:
- If you unstake funds during a boiling period, you will lose the associated share seconds you’ve accrued. As an example, if you unstake half of your stake before the Geyser has gone live, you’ll lose half of your share seconds, but the remaining half of your stake will continue to accrue.
- Unstaking funds during a boiling period will not earn you any rewards. This makes sense: The boiling period is the time before rewards start to unlock. There are no rewards to distribute yet!
However, this does not mean that you’re “locked in.” If you need to take out your staked funds for any reason, you can, but at the cost of losing the associated share seconds.
The time has come, the boiling period has ended, and rewards will start to be unlocked. The length of any Geyser is configurable (our kickoff Geysers have a 1 week boiling period and one week unlock period). Over the course of the unlocking period, the rewards will unlock linearly.
As an example, if a Geyser has 100,000 tokens in it and has a 10 day unlock period, then 10,000 tokens will be unlocked each day. And this happens on a second to second basis. So with 86,400 seconds per day:
10,000 / 86,400 = 0.116 Tokens Unlocked per Second
Unstaking is the moment that you’ll actually withdraw your rewards. You’ll be getting your staked funds back (or whatever portion you’re unstaking) and any rewards you’re owed at that moment.
A few things to know about unstaking:
- You can unstake a portion of your stake. You don’t have to do it all at once.
- When you unstake, the multipliers and accrued share seconds associated with the amount you unstake will be reset to 0.
- You can always restake funds you unstake.
The moment you unstake, the Geyser will calculate your share of the share seconds in relation to the share seconds all users have accrued. That’s the portion of the unlocked rewards that you’ll receive, assuming you have no multipliers applied which will be covered in the next section.
If you have 100 share seconds, globally the Geyser has 1,000 share seconds and so far the Geyser has unlocked 100,000 tokens, you’ll get 1/10th of that: 10,000 tokens.
There are two types of multipliers in GYSR: time multipliers and $GYSR multipliers. The key to understanding multipliers is that they do not apply directly to rewards.
Multipliers are applied to your share seconds. Not your rewards.
As an example, if you have 10% of the accrued share seconds in a Geyser (1/10) and you get a 2x multiplier, you don’t just simply get 2x the rewards. Instead, your share seconds get multiplied by 2. So instead of having 1/10 of the due rewards, you’ll instead have 2/11, meaning you get roughly 18% of the rewards.
Time multipliers are simple: they reward you for keeping your funds in a Geyser for longer. The longer you stake, the better multiplier you’ll earn. And as a note, each stake you have in the pool has its own time multiplier associated with it. If you stake some tokens on day 1 and some on day 5, they’ll each have their own multiplier. We’ll always unstake the tokens with the lowest multiplier first.
You can find your aggregate time multiplier info at the top of the Geyser interface.
When you unstake, you can optionally apply $GYSR during the unstake operation. $GYSR is a unique utility token on the GYSR platform with a straightforward function:
$GYSR multiplies your share seconds at the moment you unstake.
The multiplier isn’t 1:1 though. 1 $GYSR doesn’t mean you get a 2x multiplier and a 2 $GYSR doesn’t mean a 3x multiplier. The multiplier adjusts itself based on how much $GYSR people are using on this specific Geyser. The more $GYSR stakers are using, the lower the multiplier. The less $GYSR stakers are using, the higher the multiplier. You’ll be able to use the unstake interface to see an estimated multiplier for your unstake.
All of the $GYSR you spend during unstaking will be sent to the owner of the Geyser. For all of the Geysers that the GYSR team has created to distribute $GYSR, these funds will be used to supply our operating treasury so that we can continue to grow and support the further development.
Note: These bonus multipliers do introduce a competitive dynamic to unstaking. There is only so much reward token available, so any boosted earnings will slightly dilute the reward pool for others. This means that using multipliers and awareness of other stakers should be a key part of your strategy.
Maximizing your rewards
So what does this all mean for you? When you do unstake? What’s the best time to take your portion of the rewards? Well, there are several strategies.
By unstaking early, you significantly reduce the risk of being affected by other people applying multipliers that increase their share, thereby reducing yours. Unstaking early is the way to get guaranteed rewards. This is especially true in shorter Geysers, like our 7 day kickoff Geysers. And by unstaking early, you can move those $GYSR rewards into Uniswap so you can take part in the community Geyser when it opens on November 5th.
There are downsides to unstaking early though. Since rewards unlock linearly over the lifetime of the Geyser, you’ll be leaving some rewards on the table. As an example, if you’re staking in the week-long kickoff Geysers and you unstake after the first day, you’ll be leaving 6 days worth of rewards on the table that haven’t unlocked yet… However, you can restake immediately and continue earning rewards!
Unstaking late is the way to ensure you’re getting access to as many unlocked rewards as possible. Since rewards unlock over time, the later you unstake, the more tokens that will have been unlocked. In addition, it’s likely that over this time your time multiplier has increased as well!
However, the later you unstake, the more other people will have already unstaked. And with every unstake, other users have a chance to apply $GYSR and receive a larger portion of the rewards, diminishing yours. Timing your unstake so that you’re not overly affected by other stakers will be the challenge with a strategy that depends on waiting longer to unstake.
Some combination of the two
Remember how you can unstake part of your staked funds? It’s possible to use that to your advantage! You can unstake bit by bit over the lifetime of the Geyser at moments you think are valuable. In fact, you can unstake and then restake! You’ll reset the time multiplier on the funds you unstaked (the funds you left in will retain their time multiplier), but it may be the right time for your strategy.
This is the safest and most balanced strategy. While we can’t be sure when the best moments are to use your hard earned time multiplier or $GYSR, making strategic unstakes and restakes throughout a Geyser’s lifetime will make sure that you don’t miss out on great rewards or are adversely affected by other people using their multipliers.
We designed GYSR to allow for flexibility. We incentivize holding for longer periods of time, but don’t lock you into anything. Your unstaking strategy is key here. It means that smaller players can outsmart whales and use good timing to their advantage. Think critically about how you want to take part in the kickoff Geysers and the community Geyser. There’s a lot of value to squeeze out of them if you come in with a good plan.