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Since April this year, SOV holders have been able to stake in the Bitocracy for up to 3 years, receiving voting power and a share of the fees generated by the protocol. So far, the voting ecosystem and turnout have performed notably, seeing multiple SIPs be considered and go to vote in Governance. However, the financial incentives for staking and participating in these votes have not been as high as stakers expected, rewarding every staker with fewer tokens from fee-generation than would perhaps be ideal. Recent events and future improvements seek to rectify these conditions, meaning now is the best time ever to stake SOV, here’s why:
As outlined in our latest blog post, Season your Stake, stakers will now earn liquid SOV for staking fully vested SOV in the Bitocracy. The amount earned will be tied to voting weight, which can of course be increased by raising the amount of SOV one is staking or lengthening the duration of said stake. With the liquid SOV rewards afforded by the passing of SIP 24, stakers can now set a minimum earning floor as high as 29.75%, earned in SOV - on top of the fees that they will earn from the protocol. A 3-year stake would see an average return of 20.84% over the term. Stakers who extend their stake every 2 weeks can remain on the base APR of 29.75% indefinitely.
To see the specific APR and SOV you can receive over a specific term, use the SIP-24 liquid SOV calculator here.
This community-driven improvement is just one of many enhancements coming to staking. In addition to having base rewards, the fees earned from the protocol profits will also increase, as described below.
The first payments of liquid SOV coming from SIP 24 will occur on Friday 27th August. To celebrate this and reward those staking before the end of this week, stakes opened before August 24th will receive bonus SOV, as if the stake had begun 2 weeks ago. In other words, stakers who are already staked or stake this week will earn a bonus reward equating to one additional staking period and will be paid the first amount on Friday 27th.
As mentioned in Building on Bitocracy, additional improvements are also being made to staking, more specifically the fee collection. Currently, a variable amount of fees is being distributed to a large population of stakers. How does one increase the number of tokens an individual staker would receive? By increasing the total amount collected or reducing the quantity of addresses that’re eligible to receive these fees. At Sovryn we don’t do half-measures… We’re doing both!
The first upcoming update will see the fees earned by the protocol increase. Within the next few weeks, the Sovryn Protocol fee collection will begin earning 0.15% on every swap performed through the Sovryn AMM. This represents a large, as yet untapped revenue stream for the protocol and will increase the total amount of funds distributed between stakers.
Secondly, it has been proposed that vesting SOV tokens will no longer be eligible to receive a share of the fees collected by the protocol, only voluntarily staked, fully vested tokens will earn fees. Currently, there are many millions of SOV tokens vesting in Bitocracy and earning a cut of the fees generated. Reducing the amount of fee-sharing beneficiaries by such a large amount will significantly increase each voluntary staker’s earnings. A SIP will be required to enact this improvement. This will be open to discussion on the forum shortly. It is key to point out that vesting SOV will preserve its right to voting power in this scenario.
Sovryn’s Origins Platform is a launchpad for new and early-phase projects, such as Babelfish, that seek to join and expand the Sovryn ecosystem on Rootstock. Babelfish have committed 1.42% of their governance $FISH token’s total supply (5,964,000 $FISH) to be airdropped to Bitocracy stakers in return for the opportunity to launch on Origins. This will result in voluntary SOV stakers receiving multiple $FISH tokens for free!
The snapshot for 1% of $FISH airdrop is being taken midnight UTC, August 25th in preparation for the public pre-sale. Therefore, anybody who stakes SOV before 12:00 UTC, August 25th will be included in the airdrop! Remember, the tokens will be distributed based on voting weight, meaning stakes with higher voting weights will receive a higher share of the $FISH. To increase a stake’s voting weight, one can either increase the amount of SOV being staked or increase the duration of the stake.
To stake SOV in the Bitocracy, head to https://live.sovryn.app/stake and hit “Add new stake”. If you are already staked but want to increase your voting weight, you can extend your stake to get more $FISH. Use the full guide to staking on the Sovryn Wiki here.
For more information on the $FISH pre-sale and airdrop, see our post here.
Other projects are already looking to launch on the Origins Platform, meaning more pre-listing tokens can be airdropped to stakers for each new launch on the platform. Mintlayer, a trustless token interoperability and finance system built on Bitcoin, have already submitted a draft SIP on the Sovryn forum. This pre-proposal includes an airdrop of 300,000 $MLT tokens, direct to Bitocracy stakers.
Origins is not just a launchpad for new projects, but an accelerometer for the entire Sovryn ecosystem. All projects launching on Origins are vetted by Bitocracy and need to meet a minimum consensus requirement to pass voting, meaning the approved projects will have been scrutinized and deemed worthy by hundreds of people! Each new successful project that joins the ecosystem will further accelerate our already rapid expansion of DeFi on Bitcoin, the future of free finance. It is expected as the number of projects launching on Origins increases and the immense value of the platform is realized, so too will the number of tokens being dropped to Bitocracy stakers.
To this effect, the Origins Platform will be central to the evolution of DeFi on Bitcoin; staking the SOV token can be seen as indexing the future growth of the ecosystem. By staking and receiving airdrops from every new launch, your SOV tokens act as an index fund for the whole Bitcoin-based DeFi space!
Existing fee collections are being increased, the fees collected will be concentrated to the most committed of stakers, additional liquid SOV rewards are being distributed, $FISH is being airdropped to stakers and more airdrops are around the corner! This is why right now is the best time there has ever been to stake SOV in the Sovryn Bitocracy. On that note, remember to check how much SOV you could earn from SIP24 rewards here, stake before midnight UTC August 25th to participate in the $FISH airdrop and before Friday 27th August to receive one staking period of bonus SOV, but most of all:
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