<aside> đź’ˇ Note: due to technical challenges, Aquafarmers and LQ stakes must be associated with the same address. This document has not been fully reviewed to account for this yet. For more details, see Announcement on LQ Staking and Aquafarmers.
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LQ token holders can “stake” their LQ using the LiqwidDAO’s Agora staking module. LQ staking provides both governance and economic rights, and is a key mechanism used to ensure stability of the protocol.
When LQ is staked, it is sent into a non-custodial smart contract that tracks how much LQ has been staked, the owner of the stake, any “locks” that exist on the stake (which prevent increasing or decreasing the amount of LQ held in the stake UTxO), and whether the stake has been “delegated” (described below).
Locked stakes can be unlocked at any time except in a 45 minute period immediately after voting, and unlocked stakes can be withdrawn at any time. There are no long term “cool down” periods (at the smart contract level) where a user’s LQ will be inaccessible.
A user can have multiple stakes. For example, if Alice had 100 LQ in her wallet, she could lock 40 LQ in one stake and 60 LQ in another stake. This allows the stakes to be used independently, as described below.
Stakes can also be modified, provided that no “locks” exist on the stake. A stake modifying transaction allows the user to add or remove LQ from an existing stake rather than creating a new stake.
For technical details on Agora’s stakes, see Stakes.
The staking module is accessible at https://app.liqwid.finance/staking. This module allows a user to create, modify, or delete a stake, as well as see their available in-wallet LQ balance, the balance associated with their stakes, and which proposals (if any) have are locking each stake.
Users who stake LQ are eligible to vote on proposals using LiqwidDAO’s Agora governance module. This section only details how LQ staking relates to governance. To learn more about the governance module and process itself, see Explanation: LiqwidDAO Agora Governance .
<aside> 💡 In the future, LQ stakers will also be able to delegate their stake to allow trusted community members to vote on their behalf (while retaining economic rights), as well as draft their own proposals uses the Liqwid app’s UI.
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A single LQ stake can be used to vote on multiple proposals. When a stake is used to vote on a proposal, a “lock” is added to the stake UTxO’s datum. A locked stake is unable to be modified; the amount of LQ held in the stake must remain at it’s current value. To unlock the stake, the stake owner must withdraw their votes from any proposals that are locking the stake. “Unlocking” a stake thus requires one or more wallet signatures, and is therefore a manual user action.
The purpose of locking a stake is to prevent challenges in tallying votes. If a user wishes to increase their voting power on a single proposal, $P_0$, but their existing stake is locked by many proposals $P_0, P_1,\ldots, P_n$, the user should create another stake to vote on $P_0$ only.
Multiple stakes can be used to cast multiple votes in multiple-choice proposals. For example, this allows a user to vote for multiple SPOs in a proposal to select a new ADA staking cohort. In the future, multiple stakes can also be delegated independently to separate entities.
The ‣ detail the currently application allocation of LQ rewards. This includes a portion earmarked as rewards for LQ stakers.
All LQ stakes will accrue rewards on a monthly basis. Longer-term staking yields increases the APR earned. There is no option in the UI to select whether to lock “short-term” or “long-term”; our rewards calculations track this automatically.
The current APR thresholds (as of 2023-04-28, following the vote on proposal 0) are as follows: