Staking is a way to earn rewards by committing your crypto assets to support a blockchain network. Staking involves “locking up” or delegating a portion of your tokens for a certain time frame, thus locking them out of circulation, to assist a blockchain project you are supporting.
Staked funds cannot be unlocked prematurely, thus, when funds are staked for a chosen duration, they will remain locked for that period. After the timeframe has elapsed, you can unstake your tokens at any time you want.
The ‘duration multipliers’ and how it works
Long-term stakers are rewarded as it best aligns incentives and shows that the wallet-holder is willing to invest in the long-term growth of the network.
This is where the ‘duration multipliers’ come into play. A duration multiplier multiplies the rewards of staked tokens that are vested for a 1 year or longer (1. x multiplier). So, if a staker decides to vest their tokens for 3 years, they will receive a 3x multiplier on their staked rewards. Stakers are rewarded in FIDA and will earn a portion (%) of the daily network transaction fees that are generated from all the network protocols.
The duration multiplier is also applied to voting/governance at Bonfida. Stakers will receive gFIDA, a governance token, equivalent to the amount of FIDA staked times the duration multiplier if applicable, which permits voting/governance. To read more about gFIDA and governance see Bonfida DAO.