What is Tectonic TONIC Staking?

The TONIC staking module was built by hard at work over the past weeks and is now in the final stages of review by external security auditor, reported by Tectonic Team.

This article introduces the TONIC staking module and details the process by which staking rewards can be obtained. Come on, then; let’s get started.

What is TONIC Staking?

Those of you who have been with Tecton for a while will be familiar with staking your TONIC, how it generates massive token utility, and how it benefits you as a token holder.

Those unfamiliar with Tecton should know the following:

If you own TONIC tokens, you’ll soon be able to stake them on Tectonic in exchange for yield rewards.
The basic idea is as follows:
Stakeholders are compensated in various ways, such as a cut of the fees paid by borrowers that go toward funding the protocol.
Staking TONIC tokens will increase the token’s usefulness and serve to better align incentives with the long-term believers in our protocol.
Additionally, staked TONIC can be used as a form of community insurance in the event of a shortfall and will be used in the future to cast votes on proposed changes to Tectonic’s governance.
While it may seem similar to our TONIC money market, staking is a completely separate feature.

Staking rewards for TONIC will go live first, with the rollout of the other use cases, including community insurance and governance, to follow in the coming months.

How does it work?

The basics of staking are outlined below.

Staking TONIC into the staking module will result in the holder receiving xTONIC at the current TONIC: xTONIC exchange rate.
TONIC: xTONIC is a yield-bearing token, meaning its value will rise over time even if you do nothing to keep it in circulation.
Thus, when you withdraw TONIC from the staking module, you will have more TONIC than you did when you deposited.

Why does the TONIC : xTONIC exchange rate increase?

Half of all protocol earnings (from liquidation fees and loan repayment fees) will be sent to the staking module contract, where smart contracts will automatically convert them into TONIC for use on other decentralized exchanges like VVS Finance.

For token holders like yourself, this is excellent news because it will likely result in increased demand for TONIC tokens on the market. The staking module will buy more TONIC off the market as more people borrow and repay loans on Tectonic, decreasing the available supply.

Since the xTONIC: TONIC exchange rate is set by the total quantity of xTONIC minted in relation to the total quantity of TONIC, the xTONIC: TONIC exchange rate can only go up.

Is there any lockup period?

There is a 10-day waiting period after which you can request the return of your TONIC, but you can do so whenever you like. Withdrawing your TONIC will be possible once the waiting period has ended.

At the time you make your withdrawal request, the total amount of TONIC you can withdraw will be determined.

When will staking be available?

The launch of staking is imminent. Our smart contract security audit is nearing completion, and we can’t wait to release it to the public.

Keep checking back as we’ll soon be publishing a comprehensive guide on how to stake TONIC. Keep an eye out for updates!

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Disclaimer: This isn’t financial advice; it’s just for education. Crypted Crypto can’t guarantee its accuracy. Every investment and trade carries some risk, so always do your own research. Invest only what you can afford to lose.

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