With the pending launch of our new Staking Pools, it’s an excellent time to review the purpose of staking and our goals at Thor Financial regarding this process and to share some necessary changes to our current practices.
Generally speaking, staking is a method of accumulating rewards for holding specific cryptocurrencies. These rewards are gained because the blockchain puts those staked tokens to work. Cryptocurrencies, such as our native token, AVAX, utilize the Proof of Stake consensus mechanism to ensure all transactions are verified and secured without a middleman. Choosing to stake allows your crypto to become a part of this process, and then generates a percentage-based reward over time, similar to an interest-bearing savings account.
Let’s review both forms of staking currently offered by ThorFi.
THOR/AVAX Staking
An additional version of staking, which is provided by our THOR/AVAX liquidity pool, allows users to stake combined LP tokens to help boost Thor Financial’s available Liquidity Pool. This ensures sufficient tokens are available to buy and sell the $THOR token on the open market, and the stakeholders are also incentivized. THOR/AVAX staking will remain available to our community.
Single-Sided Staking (SSS)
Currently, Thor Financial’s SSS incentivizes staking at the overall expense of the protocol. This mode of staking solely requires the $THOR token to be provided and essentially boils down to “deposit tokens to earn tokens”. This staking does not provide collateral or help to secure the network like the above-mentioned Proof of Stake consensus model would. This means that for little to no upside to the protocol, rewards are provided to stakeholders, draining the community reward pool without providing any value to said community. Currently, the pool emits 0.017 $THOR per block, averaging about 40,000 blocks per day, or approximately 20,400 $THOR tokens per month. Single-Sided Staking will be removed from Thor Financial’s future offerings.
We will provide a multi-phase process similar to the below outline in order to move forward and remove the SSS offerings currently available. In preparation for the discontinuation of the SSS, you may withdraw your staked $THOR at any time.
- Phase 1: Allow time for community members to claim their staked tokens and rewards (ongoing)
- Phase 2: Allow rewards to naturally cease at end of the last block (20–30 days, able to be checked in the dApp)
- Phase 3: Remove the SSS Pool entirely
We’re excited about the future of staking with ThorFi and will continue to share additional details as they arise.
