Staking

What is Staking

Staking is the primary value accrual strategy of VESQ. Stakers stake their VSQ on the VESQ website to earn rebase rewards. The rebase rewards come from the proceed from bond sales, and can vary based on the number of VSQ 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 VSQ translates into a constantly falling cost basis converging on zero. This means even if the market price of VSQ drops below your initial purchase price, given a long enough staking period, the increase in your staked VSQ balance should eventually outpace the fall in price.

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

When you unstake, you burn xVSQ and receive an equal amount of VSQ. 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 VSQ (if any) will continue to receive rebase rewards.