Staking

What is SYRUP Staking?

The launch of SYRUP token will also mark the launch of SYRUP staking. On 13 November, when users enter the Syrup webapp and connect their wallets to convert MPL to SYRUP, they will have the option to one-click convert their MPL to staked SYRUP (stSYRUP).

Staking rewards represent token distributions to reward stakers for securing the economic activity of the network. The Maple protocol will distribute SYRUP rewards as a combination of scheduled increase in the SYRUP token supply (5% annualized) and SYRUP token buybacks. Token buybacks consist of SYRUP tokens that are redeemed using revenue generated from the protocol’s lending activities.

Technically, stSYRUP is a smart contract that represents a token that distributes rewards to its holders. Users that hold SYRUP can stake it in order to receive stSYRUP, and receive their portion of rewards that are distributed in SYRUP tokens.

In the first 90 days after token launch, 5,000,000 SYRUP will be distributed to stakers. Assuming a stake rate of approximately 25%, for example, this would coincide with a staking APY of approximately 9%.

SYRUP tokens will also be distributed linearly throughout the 90-day period, incentivizing token holders to stake immediately and for the duration of the program.

Where do Staking Rewards come from?

SYRUP represents the governance token for the Maple and Syrup protocols, and all value from institutional loans facilitated through Maple and Syrup accrues to the SYRUP token. By staking, SYRUP holders are able to grow their SYRUP balance as they participate in the growth of the Maple & Syrup ecosystem.

The main source of revenue for the protocol comes from the collection of management, and service fees as a portion of interest on institutional loans. Management fees are the portion of lender interest that is taken by protocol for facilitating loan origination, and service fees are paid by the borrowers as part of their overall cost of borrowing, which includes interest.

The fees collected by the treasury can then be used to buyback SYRUP, which can be distributed to all stakers, along with a portion of the token inflation. The inflation schedule for SYRUP token can be found here.

Staking & Unstaking

The staking smart contract is decentralized and non-custodial, meaning no third party takes possession of, actively manages, or controls staked tokens. Further, no party holds the private keys for the staking contract; it is decentralized.

When token holders stake their tokens to share in protocol rewards, they are free to un-stake and withdraw their SYRUP tokens at any time. Further, staking is not tied to governance - SYRUP holders, whether staking or not, are able to participate in governance.

Stakers retain ownership of their tokens for the duration of the staking period, and all staked SYRUP (stSYRUP) remains idle in the smart contract - it is not deployed for any commercial use. A user’s SYRUP balance can be viewed in the Syrup webapp and can be withdrawn at any time.

stSYRUP increases in value over time relative to SYRUP as rewards accumulate. As a result, the amount of stSYRUP tokens a user receives for staking SYRUP decreases over time.

When unstaking, users keep all staking rewards earned and can instantly withdraw their SYRUP, with no lock-up period. See more technical details here.

SYRUP Rewards Distribution

When staked, SYRUP rewards begin to accumulate immediately and are reflected in an increasing balance of SYRUP tokens in the staking dashboard.

Future distributions of SYRUP token are subject to voting from SYRUP token holders. The voting process takes place transparently on Snapshot, with proposals submitted to the Maple governance forum weeks prior.

When considering the decision to stake SYRUP, it is important to note that staking does not carry a contractual future return, and future distributions are subject to the vote of the SYRUP token holders.