Staking

Staking is an important component of the Network design to incentivize appropriate behaviors from Network participants. This section outlines the staking mechanism, reward calculations, and various staking options available in the WalletConnect Network.

Staking Rewards

Staking rewards in the Network are derived from the Reward pool. The staking rewards budget is calculated as:

$R_s(t) = W_s \cdot R_G(t)$

Where:

• $R_s(t)$ is the staking rewards budget
• $W_s$ is the weight set by governance (proposed predefined range of 0.25-0.66)
• $R_G(t)$ is the total rewards budget

Stake Weight

Each staker must:

1. Provide a pledged stake $s$ in WCT tokens, which needs to be at least the minimum stake $S_{p-MIN}$
2. Provide a timelock commitment $T_L$ between 1 and 104 weeks

These together define the actual stake-weight of the node:

$$w(t) = f(s,T_L) = s \cdot \begin{cases} w_{min} & \text{if } T_L < 1 \\ (1-w_{min})\frac{T_L}{104} + w_{min} & \text{if } 1 \le T_L \le 104 \\ 1 & \text{else} \end{cases}$$

Where:

• $w(t)$ is the stake-weight at time $t$
• $s$ is the pledged stake
• $T_L$ is the timelock commitment in weeks
• $w_{min}$ is the minimum weight factor

Calculating Individual Rewards

Each staker's rewards are based on their stake-weight and share of the overall stake-weights:

1. Stake-weight share: $s_{stWeight}(i,t) = \min \left(\frac{w(i,t)}{\sum W}, c_{MAX}\right)$ Where $c_{MAX}$ is the cap on stake-weight share (proposed: $c_{MAX} = \frac{1}{10}$)

2. Individual staking rewards: $r_S(i, t) = s_{stWeight}(i, t) \cdot R_S(t)$

Fixed Staking

The fixed staking system offers:

1. Flexible Duration: Staking periods from 1 week to 2 years (104 weeks), in weekly increments.
2. Lock-up Period: Staked tokens are inaccessible during the chosen period.
3. Reward Calculation: Longer commitments typically yield higher rewards.

Unstaking and Unbonding

To maintain network stability:

1. Disabled Early Unstaking: Tokens cannot be withdrawn before the end of the lock-up period.
2. Unbonding Period: 7-day waiting period after staking completion before tokens are returned.

Auto-locking

An auto-locking feature supports continuous participation:

1. Continuous Staking: Automatically renews staking position upon expiration.
2. Stake Weight Preservation: Maintains user's timelock for uninterrupted participation.
3. Flexible Opt-out: Users can disable auto-locking at any time.

Re-Staking

Options for re-staking include:

1. Manual Re-staking: Users can manually re-stake rewards at the contract level, increasing their stake in the Network.
2. Future Developments: While automatic re-staking is not currently implemented, it is recognized as a potential future enhancement.

note

For the initial set of nodes (at TGE) the WalletConnect network requires a minimum staking amount $S_{p-MIN} = 100,000$ WCT and a minimum of 52 weeks of timelock.