HOPR Staking is Coming 27th July!
One of the most important announcements from our recent community call was the imminent launch of HOPR’s first staking program. This six month-scheme takes standard yield farming and gives a gamified twist thanks to collectible NFTs which can boost your APY. This post will provide some more details about how it will work, when the scheme will launch and what to do in the meantime.
If you missed the call, you can watch it here.
First things first: the new HOPR staking scheme will launch on July 27th and run until 17th January 2022. The goal of the scheme is to reward HOPR token holders while providing a way to develop and test cover traffic with the help of the community.
Locking HOPR tokens in this smart contract isn’t just a way to farm tokens: it’s your gateway to participating in HOPR community testing, earning even higher rewards while helping to improve online privacy.
Instead of our original plan of launching a very minimal version of staking-linked cover traffic and then iterating on that live on mainnet, we’ll be moving development to a safer environment and launching a much more robust version early next year. The tokens that we would have paid out through cover traffic will instead be paid out through the new staking scheme, so no-one will lose out. In fact, we think this is a much better and fairer way to ensure new tokens go to the people most committed to HOPR’s mission of changing online data privacy for good.
We’ll get to the exciting NFT boosts in a little while, but here’s the rundown on how the staking part will work.
To participate in HOPR staking you’ll need to stake and lock your tokens in a HOPR smart contract. Rewards will start from July 27th and run until January 17th 2022, a period of 175 days. The contract will go live in mid-July to give people time to participate for the full period. You can join the contract at any time, but once you do, your tokens will be locked until the end date.
Rewards will pay out as the contract runs (the current plan is for rewards to be claimable on a block-by-block basis). You can claim your rewards as you go, or you can choose to reinvest them in the contract to compound your earnings. If you choose to reinvest, your APY will increase, but those tokens will be locked until January 17th like the rest of your stake.
Staked tokens receive a base reward of 0.05% per day. This works out at 18.25% APY, assuming you don’t take advantage of compounding.
If you do restake your tokens, then obviously your final APY will be even higher (exact figures will be provided once the details of the contract have been finalized, as precise returns depend on how often rewards can be claimed and restaked).
This 18.25% figure is the base APY from which the various NFT boosts will be calculated. But 18.25% is the minimum return here: if you decide to just lock up your HOPR tokens and forget about them for six months, you’re still going to get a very nice reward at the end of it.
But we hope you don’t do that! The real meat of this staking plan is the NFT boosts. Most NFTs are useless baubles, but HOPR NFTs will provide an actual function: boosting your staking APY!
Inspired by the daily tasks from our earlier incentivized testnets, HOPR NFTs will be a way to track participation in our testnets and other events like the DAO and various one-off games and promotions.
Here’s how it will work: we’ll be running regular testing programs throughout the six months of the staking program. Once each round of testing is complete, each participant will receive an NFT to certify that you participated in testing and helped with the development of the HOPR protocol.
Linking that NFT to your staking address will earn you an APY boost. Best of all, they stack, so the more NFTs you collect the higher your APY will be. There may even be extra boosts for people who participate in every testnet…
Most NFTs will be reserved for community testing, but there will be a wide range of other NFTs throughout the six month period. One of the most important is the HODLr NFT. These will be given out in late July as a special thank you to people who have supported us since launch, based on the amount of time you’ve been HODLing HOPR tokens. We’ll be doing chain analysis to make sure people aren’t penalized for activities like using the bridge, nodes, or supporting HOPR through the HOPR Farm.
There will be different levels of HODLr NFT based on how long and address has been HODLing HOPR, so if you’ve only got into HOPR recently, or you just bought your first HOPR token today, don’t worry — you’ll still get something.
If you qualify as a HODLr, you need to lock your tokens from July 27th or this particular bonus will expire.
Because NFTs are just a way to track participation, the sky’s the limit in terms of what we can award them for. The majority will be for testing, but we’re also considering NFTs for promotions, games, and special HOPR events like our upcoming appearance at EthCC 4 in Paris.
So even if you’re not a super technical person, there’ll be plenty of opportunities to help out HOPR and boost your APY (although we hope you’ll start up a node and try a testnet — they’re some of the most accessible in crypto!).
Here’s a hypothetical example of how it might work (actual NFT numbers are still being tinkered with — we’ll release more details in the next few weeks).
You stake your tokens in the HOPR smart contract, earning you a base APY of 18.25%. You’ve been HODLing your tokens since you first heard about HOPR in May, so you earn the silver tier of HODLr token, worth a 3% boost.
You participate in three testnets. Each earns you an NFT with a 1% boost. For participating in all three, you get a special NFT as a thank you for your support. That comes with a 2% boost.
In the meantime, you take part in a HOPR DAO discussion and come third in one of our community contests. So you get two more NFTs, each worth 0.5%.
You link them all to your staking address. Now your APY is 18.25 + 3 + 1 + 1+ 1 + 2 + 0.5 + 0.5, or 27.25%.
Why Are We Doing This?
The plan was to have a first version of cover traffic live by now. Why hasn’t that happened? The honest answer is that it proved just too risky to build cover traffic live on mainnet. Cover traffic needs to be fair, robust, private and above all secure. That’s a lot to juggle in a single mechanism and the added challenge of doing this on mainnet with real HOPR tokens turned out to be too much of a headache.
We can cover some risks, but covering them all is just draining too many resources. And while crypto promotes users taking responsibility for their own financial decisions, HOPR prides itself on being accessible to as many people as possible. We didn’t feel comfortable just putting a disclaimer on a rudimentary version of cover traffic and telling people to participate at their own risk.
This staking scheme also provides a way to course correct a bit on the community side. Over the past six months, it feels like we’ve moved too far from our roots as a hands-on project where all community members can help test. We miss the games and fun and the times when the channels were buzzing with people asking questions running nodes. Moving cover traffic development and testing to a safer testing environment lets us bring the community back into the development process, and the NFT boosts feel like a fair and fun way to reward that important work.
Won’t Whales Take All the Tokens?
The great thing about this NFT boost scheme is that it lets you stack NFTs with no limit. The downside is that those percentages can get really big. And don’t some people have millions of HOPR tokens? Is that really fair?
On the one hand, it’s important that people who have supported HOPR by investing a lot of money shouldn’t be penalized.
Still, it’s obviously not ideal if an NFT for participating in a testnet earns a regular user 1000 HOPR tokens, but a whale gets 1,000,000 for doing the same work. That’s why we’ll have mechanisms in place to limit the total amount of tokens which someone can get from the boosts. This will be an extremely generous cap. Regular HOPR holders and users (e.g., someone who has the full 16,000 HOPR from pre-sale) won’t come closer to hitting it. This is just to make sure there’s an even playing field.
When Will It Start?
Here’s the full timeline for the scheme:
Staking Launch: 20th July 2021
Rewards Start Date: 27th July 2021
Staking End Date: 17th January 2022
Staking Period: 175 days
We hope you’ll join us for this exciting next chapter in HOPR’s development!