Reflection Staking is a whole new way of looking at staking technology and the limitations of DeFi. At face-value, Reflection Staking enables a type of staking known as Open Staking. In this kind of staking, a holder can stake their tokens at any time and withdraw them at any time. Stakers pay a withdrawal fee for unstaking. This fee mechanism encourages users to keep their tokens in the staking pool for a period long enough to earn rewards to offset the withdrawal fee while simultaneously allowing users to stake their tokens anytime. Goodbye staking contribution deadlines, now you will never miss an opportunity to earn from a staking pool with the help of Open Staking powering projects.
Reflection staking is a lot more than just open staking. Reflection staking allows any project to turn their token into a reflection token.
Let's say a project's token is X Token. X token can be any project's token
X-Reflection Token (XRT) is generated in exchange for X-Token at a 1:1 ratio. XRT can have a tax/fee associated with it for each transaction or withdrawal. These fees can be burned or sent as rewards to a self-sustaining open staking pool powered by XRT Liquidity Providers.
Self-Sustaining LPool and Reward Structure for Staking
Since the fees burned and rewards generated are directly tied to transacted volume, providing and replenishing liquidity is important for this ecosystem. For this purpose, in addition to the LPool fees, Liquidity Providers are rewarded with per transaction rewards that are automatically distributed to them via a dedicated XRT LP Token staking pool.
We know this is a rather complex concept to understand. We'll be developing a simplified user journey and UI to help community members understand and take advantage of this self-sustaining deflationary ecosystem. Reflection staking is also powering Ferrum's stellar Crucible product.
As we get closer to launch, we will share more details regarding the structure of these pools and their benefits.
This technology is also being offered to projects as a service they can utilize.