Staking
CeFi Staking is a great way to get your users more invested (literally) in your exchange and reward them for keeping assets on your exchange
Last updated
CeFi Staking is a great way to get your users more invested (literally) in your exchange and reward them for keeping assets on your exchange
Last updated
Staking is available to operators on the Cloud Enterprise and On-Premise Boost operators only.
HollaEx Exchanges utilize a CeFi method of staking. This differs from the blockchain-based DeFi method in a few ways.
HollaEx CeFi staking avoids utilizing the blockchain and instead, the software calculates and distributes rewards depending on your defined parameters.
The way this works in a nutshell:
The operator sets up Staking Pool, choosing what asset will be staked, what the reward will be, and the parameters such as duration and penalties for early unstaking.
Here the operator also chooses a funding source. This is simply an account where rewards will be taken from
A user chooses to participate in this pool, staking their assets, essentially 'locking' them to the exchange.
If the user unstakes early, penalties such as forfeiting a percentage of their initial stake are applied, which are then transferred to the funding source account mentioned above.
If the user holds their stake until the end of the set duration, they receive back their initial asset, as well as the calculated amount of the reward asset, paid out from the funding source
Due to this CeFi method of staking that HollaEx utilizes, it is vital that the funding source account has sufficient assets stored on it at the start of the pool, and kept maintained through the lifetime of the pool.
This funding source account lacks assets, the rewards will not be paid out to users, even if they complete a stake.
To start a Staking Pool on your exchange, navigate to the Operator Controls and find 'Stakes' on the Sidebar. Ensure that the 'Allow CeFi Staking' toggle is set on, and follow up by clicking the green 'Create CeFi Stake Pool'.
This will open a menu where the Asset for staking can be chosen from active assets on your exchange. Once this is chosen the menu will expand and the Asset for rewarding can be chosen.
In most cases, these will be the same (eg. Staking USDT will reward back USDT), but there is an inbuilt mechanism that will convert one asset to the equivalent worth of another (eg. Staking BTC returns USDT).
Following this choose a name for the pool. This will be shown to users.
This defines what the APY (Annual Percent Return) of the staked assets will be. Alongside this, the Staking Duration is chosen. This defines the amount of time that the assets must be locked into the exchange, for the reward to be paid out (and penalties to be avoided).
Included in the above menu is the option for 'Perpetual Staking'. This means that there is no minimum staking duration, and users can choose to unstake the assets at any time, earning the equivalent return from how many days they left staked, essentially allowing users to decide the Staking duration.
This of course means that due to there being no minimum, there are no penalties to users for unstaking and thus they will only ever gain assets from the staking process.
Unstaking simply refers to a user deciding that they want access to their staked assets and removing them from the pool. This can incur a penalty where a percentage of their assets may be transferred to the exchange itself, to encourage users to keep their stake for the duration.
This defines if a user can choose to unstake. If no is selected the user cannot access their staked assets at all, until the staking period is complete.
The no selection for unstaking should be used only if considered thoughtfully, as some users may be frustrated by the inability to retrieve assets, even knowing penalties may apply.
Slashing is the term used to describe the penalty applied to a user's staked amount of assets. This penalty can be applied in two ways:
Slash on Principle - This is the percentage taken from the total amount of the initial staked asset. For example, if this is set to 5%, a user unstaking earlier, who staked 1000USDT, would receive back 950USDT, and the source wallet that is chosen would receive the 50USDT.
Slash on Earnings - This refers to the percentage taken of the earnings that a user has added to their stake until that point. For example, if a user had earned 5USDT up to a point, and had chosen unstake earlier than the full staking duration, if the Slash on Earnings was set to 50%, they would receive 2.5USDT (plus their initial stake minus any Slash on Principle %), and the pools source wallet would receive the other 2.5USDT
This menu is simply the minimum and maximum amount of assets a user can apply to the pool at any one time.
This is simply a message that will be displayed to users when they are going to stake. This could be used to alert them to the terms you have set, and ensure they know and understand the process.
This allows you to choose an account on the exchange where the rewards that your users receive for successful staking will be sent. This means that for a smooth process and happy users, this source wallet is continually ensured to have a sufficient balance of the reward asset
It is critical to the smooth running of the pool that this funding source account has sufficient amounts of assets for the expected amount of rewards to be paid out.
After this there will be a review page, to take a chance to ensure all previously chosen settings are correct.
Following this review page will be the Open pool menu this again gives a chance to ensure all settings are correct before finalizing the pool. To confirm and proceed, type 'I UNDERSTAND' in the textbox and click next.
Once the pool is finally set up, initialized, and open to the public, it is recommended not to edit the pool further, as this may have unexpected consequences with user funds.
With the settings of the pool chosen, there are a few minor selections to get it launched and available to users. On the Stakes page now, a new record will be visible with the details and most importantly several settings on the right side.
Taking a closer look we see Onboarding and Status Fields.
First, we must edit the Status field, and initiate the pool. Simply hit Edit, and select the option for Open the Pool.
After this is done, the pool is ready to go and Active, but to actually allow users to begin staking we need to open the Onboarding process in the same way, hitting Edit under Onboarding, selecting the Open Onboarding radio button, and hitting Next.
Finally, users will be able to see and interact with the new Staking Pool. Heading to the Stake page and switching the toggle button from DefI to Cefi, the newly set up pool will be visible, with the important details shown to users.
As the user goes through the process of the staking, they will be informed of the slashing rules, and given a message explaining what Slashing entails.
Finally, the user can review the details of their stake, as well as be shown any disclaimer message that was included in the initial setup.
After a final confirmation message the user will have the assets staked, and hopefully remain patient enough to receive their rewards!
Formula:
