What’s a Warm-Up Staking Period?
Warm-up staking periods in the context of Luxor Money is the amount of time one must wait between staking and claiming to avoid forfeiting rebases.
We rolled out a warm-up period today, as announced on Twitter, in response to community requests to stabilize emissions and combat potentially harmful strategies that take advantage of our staking (rebase) APY.
Our rebase consistently ranks in the Top 3 Highest APYs for all protocols, according to Ape O’Clock and currently Ranked #1 on Fantom Opera.
Our APY currently exceeds 20M% and has hovered above this figure for the last few weeks. The APY is not set manually and is the result of a number of factors, each of which help to determine the resultant APY. As such, we have been tasked with optimizing parameters to ensure the outflow of these emissions lands in the hands of those who have demonstrated patience and commitment to the longevity of the Luxor Money protocol.
In an effort to combat the deleterious effects of high inflation, Luxor Money imposed a delay on withdrawing rewards starting today, such that if you stake your LUX and then withdraw prior to 21 rebases (7 days) have elapsed, then you forfeit your rewards earned during this 21 rebase period.
What About: Your Staked LUX?
Your staked LUX is converted into LUM and then sent to a contract, which holds your LUM for the duration of the warm-up period (of 21 rebases).
Staked LUX is not locked, however removing from the staking mechanism forfeits the yield you earned on the staked LUX, which is pending until the period ends, unless you execute an early withdrawal.
The contract is designed to give you your LUX back on demand, no matter what. You cannot lose your staked LUX. You risk your rewards, but this is only if you leave staking too soon. Your staked LUX will be fine, regardless.
What If: You Stake More?
Staking additional Luxor Money will not result in forfeiting your pending rewards. However, it is prudent to take note that in the event you choose to add more to your staking position, you will reset the timer on your warm-up period. For example, staking on Day 1 ordinarily means withdrawing on Day 8 (7 Days) comes with 100% of your earnings, however, if you stake more on Day 2, then Day 9 (7 Days) is your new completion date, and so on.
Note: we will implement a forfeit button to make it clear that you are forfeiting rewards. In the meantime, we have included a warning in the Rebase UI to ensure you are reminded of the new policy we have enacted.
How to: Claim Your Rewards
After the 21 rebase warmup period ends, your LUM rewards are available for you to claim. It is not mandatory to claim those rewards as they will continue earning staking rewards, regardless. In the event you would like to sell, send LUX, or withdraw LUX, you will need to first claim your warmup period rewards prior to withdrawing from your staked position.
Why: Impose Warm-Up Periods?
As pointed out by our community, there is a strong incentive to buy up Luxor prior to each rebase period and sell immediately after a rebase, leading to a downward spiral on the price performance of Luxor Money around each rebase period, which occurs 3 times daily, 8 hours apart.
This has made a noticeable impact on our price action and required a strategic solution to resolve this inevitability, especially as our APY is simply too juicy to ignore. The warmup period is just one solution — other solutions are under develop to further strengthen and stabilize our economy.
In order to equal the playing field and prevent whales from gaming the system, implementing this warmup period requires everyone to stake their LUX for 21 rebases (7 days) in order to earn rewards.
Warm-up staking periods are a period of 21 rebases wherein which early withdrawals result in the forfeiture of pending rewards. Staked LUX is safe regardless of when you choose to withdraw. Waiting 21 rebases (7 days) prevents you from losing your pending rewards. We implemented warm-up periods to prevent unwanted price action around rebases, especially via bots and those who seek out a high-performance rebase mechanism, such as ours, without regard or concern for the longevity of the Luxor Money economy.
Founder of Luxor Money