What is Staking

Staking is the primary value accrual strategy for Rug. Stakers stake their RUG tokens on the Rug Website to earn rebase rewards. The rebase rewards come from the proceeds from bond sales, and can vary based on the number of RUG staked in the protocol and the reward rate set by monetary policy.

Staking is a passive, long-term strategy. The increase in your stake of RUG translates into a constantly falling cost basis converging on zero. This means even if the market price of RUG drops below your initial purchase price, given a long enough staking period the increase in your staked RUG balance should eventually outpace the fall in price.

When you stake, you lock RUG and receive an equal amount of sRUG. Your sRUG balance rebases up automatically at the end of every epoch. sRUG is transferable and therefore composable with other DeFi protocols.

When you unstake, you burn sRUG and receive an equal amount of RUG tokens. Unstaking means the user will forfeit the upcoming rebase reward. Note that the forfeited reward is only applicable to the unstaked amount; the remaining staked RUG (if any) will continue to receive rebase rewards.

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