Staking

What is Staking

Staking is the primary value accrual strategy of SOHM. Stakers stake their SOHM on the SOHM website to earn rebase rewards. The rebase rewards come from the proceed from bond sales, and can vary based on the number of SOHM staked in the protocol and the reward rate set by monetary policy.

Staking is a passive, long-term strategy. The increase in your stake of SOHM translates into a constantly falling cost basis converging on zero. This means even if the market price of SOHM drops below your initial purchase price, given a long enough staking period, the increase in your staked SOHM balance should eventually outpace the fall in price.

When you stake, you lock SOHM and receive an equal amount of SOHM. Your SOHM balance rebases up automatically at the end of every epoch. SOHM is transferable and therefore composable with other DeFi protocols.

When you unstake, you burn SOHM and receive an equal amount of SOHM. Unstaking means the user will forfeit the upcoming rebase reward. Note that the forfeited reward is only applicable to the unstaked amount; the remaining staked SOHM (if any) will continue to receive rebase rewards.