Staking
AleDEX provides users with a range of staking options to cater to various preferences and maximize earning potential. These options include single staking of ADEX, liquidity pool (LP) staking for token pairs, and custom token staking pools that can be created by token owners. Here’s a breakdown of the three types of staking available:
a. Single Staking
Single Staking $ADEX
AleDEX allows users to stake their native ADEX tokens to earn more ADEX through an efficient and automated process. This is ideal for users who want to grow their ADEX holdings with minimal effort.
Stake $ADEX directly into the staking contract.
Earn $ADEX as staking rewards, compounded automatically through the auto-compound mechanism.
Users can only unlock $ADEX from the single staking pool after a minimum of 10 days
Single Staking of Any Token (Custom Staking Pools)
AleDEX offers a unique feature where any token owner can create custom staking pools for their tokens. This allows token issuers to incentivize holders by offering rewards in their token or another asset.
Token owners can create staking pools and define the rewards for staking their tokens. Users can stake any supported tokens in these custom pools. Provides flexibility for token holders and project owners to design staking incentives, fostering ecosystem growth and user engagement.
Stakers earn rewards as defined by the pool creator, which could be in the staked token or another specified reward token.
Mathematical Explanation for Single Staking
AleDEX offers an advanced staking system designed to help users maximize their returns through innovative mechanisms. This documentation provides a mathematical explanation of the staking process and an overview of the auto-compounding mechanism, inflation control, and other key features.
Auto-Compounding Process
AleDEX employs an automated compounding system that continuously maximizes stakers' earnings.
Delegated Tokens: When users stake their tokens through the AleDEX protocol, they receive a staking token as proof of their stake. This staking token serves as the basis for calculating rewards during the auto-compounding process.
Compound Rewards: Every week, the protocol automatically compounds rewards by reinvesting them back into the staking pool. This process is handled by a smart vault, which ensures that users' returns are maximized without manual intervention.
Restaking: As part of the auto-compounding process, AleDEX automatically restakes the earned rewards. This continuous reinvestment allows stakers to benefit from compounded interest, increasing their overall returns over time.
Inflation Control Function: AleDEX introduces an inflation function to control the inflation rate throughout the staking period. This function is designed to maintain a balanced reward system, preventing excessive inflation that could undermine the value of rewards. The inflation function adjusts dynamically to ensure sustainable returns.
Mathematical Overview
The raw reward after a staking period can be calculated by this formula:
Where:
APR: Annual Percentage Rate, the return rate that users can expect to earn over a year.
f(inf): The inflation function, a complex formula used to control the inflation rate. It accounts for multiple variables to maintain balanced rewards over time.
t: The staking time (how long the tokens have been staked).
T: The total staking period.
d(T): A coefficient function that defines the reward factor in the numerator, which adjusts based on the length of the staking period.
This formula ensures that rewards are fairly distributed while controlling inflation and optimizing returns based on staking duration.
Key Benefits
Automated Maximization of Returns: AleDEX’s auto-compounding mechanism ensures that users achieve the highest possible interest without the need for daily restaking. This saves time and allows users to passively grow their stake.
Inflation Control: The inflation function is a key innovation in AleDEX's staking protocol, preventing potential manipulation of rewards by large stakeholders. This dynamic control prevents any disproportionate increase in rewards caused by sudden, large staking amounts.
Gas-Efficient Smart Contracts: AleDEX’s smart contracts are optimized for minimal gas fees, thanks to the use of mapping methods in the Ralph programming language. By consolidating user information into a single account, we reduce the number of transactions required, significantly lowering the costs for stakers.
b. LP Staking
For those who wish to provide liquidity, AleDEX offers LP staking where users can stake liquidity provider (LP) tokens for selected token pairs. This option provides a double benefit: liquidity providers earn rewards from trading fees, and they can also stake their LP tokens for additional rewards.
Provide liquidity for selected token pairs and receive LP tokens. Stake these LP tokens to earn extra rewards.
Ideal for users looking to generate yield from both trading fees and staking rewards while supporting liquidity on AleDEX.
AleDEX charges a 1% on staking reward. This tax shall be burned.
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