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Staking (Under Development)

What is Staking on MCAP?​

Staking on MCAP allows token holders to earn passive income by providing liquidity to gaming platforms. When you stake tokens, you become a liquidity provider and receive a share of the profits generated by the games on the platform.

How Staking Works​

The Staking Process​

  1. Deposit Tokens: You deposit supported ERC-20 tokens into the liquidity pool
  2. Receive Shares: You get LCS (Liquidity Cache Shares) tokens representing your ownership
  3. Earn Rewards: As games generate profits, the value of your shares increases
  4. Compound or Withdraw: You can leave rewards to compound or withdraw at any time

Share-Based System​

MCAP uses an ERC-4626 tokenized vault share system:

  • Shares Represent Ownership: Your LCS tokens represent your portion of the total pool
  • Value Appreciation: Share value increases as game profits are added to the pool
  • No Lock-up Period: You can withdraw your stake at any time (subject to liquidity)
  • Automatic Compounding: Rewards are automatically reinvested

Getting Started with Staking​

Prerequisites​

  1. Supported Wallet: MetaMask, WalletConnect, or other Web3 wallets
  2. Supported Tokens: Check available tokens through the MCAP API
  3. Network: Ensure you're on the correct blockchain network
  4. Gas Tokens: Have native tokens for blockchain transaction fees

Step-by-Step Staking Process​

1. Check Available Tokens​

First, verify which tokens are supported for staking:

// Using MCAP SDK
const availableTokens = await mcap.tokens.search({
  // Add any filters if needed
});

2. Approve Token Spending​

Before staking, you need to approve the liquidity pool smart contract:

// Using ethers.js
const tokenContract = new ethers.Contract(tokenAddress, ERC20_ABI, signer);
const approvalTx = await tokenContract.approve(
  liquidityPoolAddress,
  ethers.utils.parseUnits(amount, tokenDecimals)
);
await approvalTx.wait();

3. Deposit Tokens (Stake)​

// Using ethers.js
const liquidityContract = new ethers.Contract(
  liquidityPoolAddress,
  LIQUIDITY_CACHE_ABI,
  signer
);

const depositTx = await liquidityContract.deposit(
  ethers.utils.parseUnits(amount, tokenDecimals),
  userAddress // receiver of shares
);
await depositTx.wait();

4. Monitor Your Position​

Track your staking position and rewards:

// Get your share balance
const shareBalance = await liquidityContract.balanceOf(userAddress);

// Get current share value
const totalAssets = await liquidityContract.totalAssets();
const totalShares = await liquidityContract.totalSupply();
const shareValue = totalAssets.div(totalShares);

// Calculate your position value
const positionValue = shareBalance.mul(shareValue);

Understanding Rewards​

How Rewards are Generated​

Rewards come from gaming platform profits:

  1. Game Profits: When users lose bets, profits flow to the liquidity pool
  2. Platform Fees: A portion of platform fees may be distributed to stakers
  3. Yield Generation: Pool assets may be used for additional yield strategies

Reward Calculation​

Your rewards are calculated based on your share of the total pool:

Your Reward Share = (Your Shares / Total Shares) × Total Profits Added

Reward Distribution​

  • Automatic: Rewards are automatically reflected in share value
  • Real-time: Share value updates as profits are added
  • Compounding: Rewards compound automatically unless withdrawn

Withdrawal Options​

Full Withdrawal (Redeem All Shares)​

// Withdraw all your shares
const allShares = await liquidityContract.balanceOf(userAddress);
const redeemTx = await liquidityContract.redeem(
  allShares,
  userAddress, // receiver of assets
  userAddress  // owner of shares
);

Partial Withdrawal (Specific Asset Amount)​

// Withdraw specific amount of underlying assets
const withdrawTx = await liquidityContract.withdraw(
  ethers.utils.parseUnits(assetAmount, tokenDecimals),
  userAddress, // receiver of assets
  userAddress  // owner of shares
);

Preview Withdrawals​

Before executing, you can preview how many assets you'll receive:

// Preview withdrawal
const assetsToReceive = await liquidityContract.previewRedeem(shareAmount);
const sharesToBurn = await liquidityContract.previewWithdraw(assetAmount);

Advanced Staking Strategies​

Dollar-Cost Averaging​

Instead of staking a large amount at once, consider regular smaller deposits:

// Example: Weekly staking automation
const weeklyStakeAmount = "100"; // 100 tokens per week
setInterval(async () => {
  await stakeTokens(weeklyStakeAmount);
}, 7 * 24 * 60 * 60 * 1000); // Weekly

Yield Optimization​

Monitor pool performance and adjust your staking strategy:

  1. Track APY: Monitor the annual percentage yield
  2. Compare Pools: If multiple pools exist, compare their performance
  3. Timing: Consider market conditions when adding or removing stake

Risk Management​

  • Diversification: Don't stake more than you can afford to lose
  • Liquidity Management: Keep some assets liquid for opportunities
  • Regular Monitoring: Check pool health and platform performance

Monitoring Your Staking Position​

Key Metrics to Track​

  1. Share Balance: Your LCS token balance
  2. Share Value: Current value per share
  3. Position Value: Total value of your staked position
  4. Unrealized Gains: Profit since your last deposit
  5. Pool Performance: Overall pool metrics

Using the MCAP Dashboard​

The MCAP dashboard provides real-time information about:

  • Your current staking positions
  • Historical performance
  • Reward earnings over time
  • Pool statistics and health metrics

APIs for Monitoring​

// Get current position value
const getCurrentPositionValue = async (userAddress) => {
  const shares = await liquidityContract.balanceOf(userAddress);
  const assets = await liquidityContract.convertToAssets(shares);
  return assets;
};

// Calculate returns
const calculateReturns = async (userAddress, initialDeposit) => {
  const currentValue = await getCurrentPositionValue(userAddress);
  const returns = currentValue.sub(initialDeposit);
  const returnPercentage = returns.mul(100).div(initialDeposit);
  return { returns, returnPercentage };
};

Risk Considerations​

Smart Contract Risk​

  • Audit Status: Verify the contract has been audited
  • Admin Controls: Understand admin capabilities (pause, etc.)
  • Upgrade Mechanism: Check if the contract is upgradeable

Platform Risk​

  • Gaming Performance: Poor game performance affects rewards
  • Regulatory Risk: Changes in regulations could impact operations
  • Competition: New platforms could affect user adoption

Liquidity Risk​

  • Withdrawal Availability: Large withdrawals might not be immediately available
  • Pool Drain: Significant losses could reduce pool size
  • Market Conditions: Token price volatility affects position value

Mitigation Strategies​

  1. Start Small: Begin with a small amount to understand the system
  2. Stay Informed: Monitor platform announcements and updates
  3. Diversify: Don't put all assets in a single pool
  4. Regular Review: Periodically reassess your staking strategy

Troubleshooting Common Issues​

Transaction Failures​

Problem: Deposit transaction fails Solutions:

  • Check token approval amount
  • Ensure sufficient gas fees for blockchain execution
  • Verify contract is not paused
  • Check network connectivity

Problem: Withdrawal fails Solutions:

  • Verify sufficient liquidity in pool
  • Check if contract is paused
  • Ensure you own the shares you're trying to redeem

Share Value Discrepancies​

Problem: Share value seems incorrect Solutions:

  • Wait for transaction confirmations
  • Check for recent profit additions
  • Verify you're looking at the correct pool
  • Contact support if discrepancy persists

Best Practices​

Security​

  • Verify Contracts: Always verify smart contract addresses
  • Use Hardware Wallets: For large amounts, use hardware wallets
  • Regular Backups: Keep wallet backups secure and up-to-date

Financial Management​

  • Only Stake What You Can Afford: Never stake more than you can lose
  • Regular Monitoring: Check your positions regularly
  • Tax Considerations: Understand tax implications in your jurisdiction

Operational​

  • Keep Records: Track all staking transactions
  • Stay Updated: Follow platform announcements
  • Plan Exits: Have a strategy for when to withdraw

Getting Help​

  • Documentation: Review the technical reference
  • Integration Guide: Check the integration guide for developers
  • Support: Contact MCAP support for assistance
  • Community: Join the MCAP community for discussions and tips

Next Steps​