Introduction
What is Governance staking?
Governance page:
To incentivize participation in Axiom Finance governance, we are introducing the ProvenAXIOM Governance staking model and ecosystem profit-sharing. In other words, AXIOM can now be staked (locked) to receive fees from the Axiom Finance ecosystem. ProvenAXIOM is inspired by the governance concept of Curve's veCRV token model, which has the best token design in the industry for long-term holders. It encourages long-term staking and active community involvement through unbiased governance.
The idea behind locking is to empower long-term committed investors to take decisions that benefit the long-term future of the platform. This is also why we reward investors committed to longer lock with more voting power (more ProvenAXIOM).
Steps for ProvenAXIOM staking
Lock AXIOM tokens to receive ProvenAXIOM token
Stake ProvenAXIOM and receive ecosystem profits in USDB
Note: You can choose to lock in ProvenAXIOM between at least 7 days and up to 3 years. The longer you stake AXIOM, the more ProvenAXIOM you will get.
Example:
- As written above, the maximum duration to lock is 3 years (1095 days)
- If you lock 100 AXIOM for the max duration (1095 days), then you will get 100 ProvenAXIOM
- If you lock 100 AXIOM for a shorter duration, say 100 days, then you will get: 100 AXIOM * (100 / 1095) = 9.13 ProvenAXIOM
Trading of ProvenAXIOM, while technically possible, is not practical. Unlocking needs to happen through wallet addresses that staked in the first place. There will be no real demand to buy ProvenAXIOM but rather mere circulation of ProvenAXIOM between those addresses who locked them for exchange of intermittent liquidity.
Therefore, it is encouraged to lock AXIOM tokens to receive ProvenAXIOM tokens, instead of buying ProvenAXIOM tokens.
Early Exit Penalty
Unstaking ProvenAXIOM before the lock-in period ends incurs an early exit penalty of 30%. The early exit penalty effectively burns AXIOM immediately.
Why is a high penalty important? If governance allowed easy unlocking, anyone can temporarily lock AXIOM to influence a decision and afterward divest from the platform. The veCRV mechanism doesn't allow to unlock governance token prematurely. However, the team at Axiom Finance thought to offer more flexibility to investors. Therefore, unlocking is allowed with a penalty of 30% on the staked amount.
In order to unlock AXIOM again, users will need to use the exact amount of ProvenAXIOM required.
Last updated