FLX Staking
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Stakers are in charge with protecting the RAI protocol from insolvency. They stake in a smart contract that then constantly checks whether RAI is well capitalized.
In case the protocol is undercapitalized (has debt that is not backed by collateral), the staking pool will start to auction FLX/ETH LP tokens in exchange for RAI that is then used to bring the protocol above water. Stakers will get diluted in this process. In exchange for protecting the protocol, stakers receive more FLX.
Exit delay (thawing period): 21 days
Reward unlock period: 3 months. Locked rewards are unlocked linearly during a 3 month time period from the moment a staker requests that they claim their rewards
Percentage of rewards unlocked over 3 months: 75%
Percentage of rewards that can be claimed right away (no unlock): 25%
Percentage of LP tokens in the pool that can be slashed/auctioned: 30% (the rest of the pool isn't auctioned/slashed)
Exit delay (thawing period): 1 minute
Reward unlock period: 10 minutes. Locked rewards are unlocked linearly during a 10 minute time period from the moment a staker requests that they claim their rewards
Percentage of rewards unlocked over 10 minutes: 75%
Percentage of rewards that can be claimed right away (no unlock): 25%
Percentage of LP tokens in the pool that can be slashed/auctioned: 30% (the rest of the pool isn't auctioned/slashed)
The RAI protocol is "insolvent" when liquidations (collateral auctions) are not successful (cannot repay a Safe's debt by selling ETH) and they leave leftover RAI which is not backed by collateral anymore.
Liquidations can be unsuccessful when:
Only a portion of RAI is received by the liquidation out of the total amount of RAI that was requested
The value of ETH drops during a liquidation and there isn't any incentive to bid with RAI (value of ETH is less than the value of RAI requested)
The market price of RAI soars more than 10% above the redemption price which makes liquidations unprofitable
If there's too much unbacked RAI in the protocol, the system becomes insolvent. In case of insolvency, stakers are the first line of defense.
Anyone can call the staking pool to auction LP tokens immediately after the protocol becomes insolvent. In Section 2 above you can see the percentage of the staking pool that can be auctioned in exchange for RAI which is subsequently used to eliminate unbacked debt.
In the Stake section, you can specify how many LP tokens you'd like to stake.
Once you stake, you will start to accrue rewards every block. You can claim rewards anytime using the Claim Reward button.
When you want to start unstaking, you can head over to the Unstaking section.
Unstaking must be done in two stages:
You request that a portion of your currently staked tokens should be unstaked
You wait for the full thawing period until you can get your LP tokens back from the staking contract
There are also several important things you must keep in mind when you unstake:
The amount of tokens that are waiting to be unstaked do not count toward accruing rewards anymore. You only accrue rewards for the tokens that are both staked and are not waiting to be unstaked
Take the following scenario: Alice has 10 tokens staked. She requests to unstake 5 tokens and has to wait 3 weeks to withdraw them from the contract. After 2 weeks, Alice requests that she unstakes another 3 extra tokens (so she's only earning rewards with 2 tokens now). Alice must wait 3 weeks from the moment of the second unstake request in order to withdraw the whole 8 tokens from the contract
Take another scenario: Alice has 10 tokens staked. She requests to unstake 5 tokens and has to wait 4 weeks to withdraw them from the contract. After 5 weeks, Alice does not unstake the 5 tokens but rather requests that she unstakes another 3 extra tokens (so she's only earning rewards with 2 tokens now). Alice must wait 4 weeks from the moment of the second unstake request even if the 5 tokens could have been withdrawn from the contract
Two things to keep in mind:
After you stake, the staking pool will mint a claim token for you called Staked FLX (stFLX). stFLX is not transferrable
You can still get slashed while you're waiting to unstake from the pool
You will notice that the amount of stFLX you receive might differ from the amount of LP tokens you stake. That is normal behaviour.
RAI being "insolvent" means that there must be at least debtAuctionBidSize unbacked RAI on the protocol's balance sheet. The debtAuctionBidSize can be automatically recomputed by the protocol approximately every 4 days (assuming that someone calls the protocol to recalculate the parameter). The current debtAuctionBidSize parameter value can be read from the contract.
The staking pool can read the amount of unbacked debt that the has and compare it to the debtAuctionBidSize value. If there's more unbacked debt than debtAuctionBidSize, it means that the protocol is insolvent and the staking pool can start to auction tokens.
First, you need to provide liquidity in this for mainnet and in for Kovan.
Once you receive your FLX/ETH LP tokens, head over (for mainnet) and (for Kovan) in order to see the staking dashboard.
