A Tulip Spring: Staking & Governance
Hello Tulip Farmers and frens alike. A common question that we always get is wen staking? The wait is now over, head over to our new staking page to stake your tokens and prepare to participate in governance!
A few thoughts as to why we are only releasing Tulip staking now. Over the months, we’ve seen questions about utility of the token or purported unwillingness to create token value accrual. First, profits generated have been consistently been swept to a multisig treasury earmarked for the DAO. We had an internal target of $5M in stablecoins in the treasury before moving forward. Second, we still had a large backlog of UI/UX improvements and our internal deadline of pushing out v2 and strategic vaults. V2 and strategic vaults were completed in the end of January and the team decided to slow down for February to take a breather and prevent burnout. Third, learning from our mistakes with the rushed token launch, we decided that staking/governance will be released once we deemed the protocol is ready for this shift.
Tulip Staking
Once Tulip is staked on the staking page, staked Tulip or sTULIP will be minted. This token represents your share of the staking pool and is needed to claim your stake and staking rewards. This will also be used for governance voting. Tulips have a 2 week unstaking period, with no rewards during this period. Once the period is over, the unstaked amount can be claimed. Note that unstaking will also burn your sTULIP and you will not be able to participate in governance. There can be up to 5 pending unstakes.
Now, you may be wondering where the staking APY is coming from, which leads us to the second section of this post.
Tulip Buyback
The protocol will begin buybacks with future generated profits on a weekly basis with acquired tokens being distributed back to stakers. The initial buybacks will be decided via governance vote over the next few days. Any future adjustments to this will also require governance voting. A TWAP will be used to avoid frontrunning and we believe this method is the best way to reward long term holders. Governance will be detailed in a follow up post in a few days.
APY for staking is displayed with last week’s APY and also cumulative APY (year to date). Due to many factors, the APY is indicative and will not reflect future performance.
Development Update
Our team has been finetuning the staking contract and UI. Our second major focus is the borrow lend market for our lending pools, this will allow users to borrow against their deposits, which will increase money market efficiency. We have also been working on an arbitrage strategy for our strategic vaults.
As always, thanks for being part of the protocol and we look forward to involving Tulip Farmers into our governance process! Please stake your Tulips in preparation for our first governance vote in the next few days.
