In the first article from our ADA Finance DeFi 101 series, we presented two major features of the ADA Finance ecosystem: referral program and address milestone rewards with a 10% kickback program.
In this article, we will elaborate on our unique and progressive ADAFi Staking and ADA Finance DAO Program. We are excited about these particular features as they are key to fulfilling our vision of offering innovative and transparent passive earning opportunities.
Staking is the process of holding crypto assets (coins, tokens, or NFTs) and earning interest from them. The return is typically dependent upon the length of time and the number of assets committed. The longer one stake assets, the bigger the benefits. The more assets staked, the greater the return. Sounds simple, right?
Staking terms and conditions are not the same with every project. Within the ADAFi ecosystem, ADAFI staked tokens remain in the custody of the delegator. In other words, you, as a delegator, stay in control of your assets. You retain ownership and can unstake without delay. This is in stark contrast with some projects which offer staking through a locked system that requires the delegator to transfer tokens to a centralized exchange and require assets to be committed for long periods of time (i.e. months) at the risk of forfeiting rewards.
Furthermore, staking usually yields a constant APR for most coins and tokens. In our ecosystem, the longer you stake ADAFI tokens, the higher your rate of return. In more detail, with the ADA Finance progressive staking rewards model, if you stake for less than 90 days, you are entitled to the base 15% APR but if you stake your ADAFI tokens beyond that mark, your APR increases to 20%! Minimal fees (0.75% for deposit and 0.5% for withdrawal) are charged for staking and unstaking. Every time a new deposit is made, a staking fee is charged. The rewards, on the other hand, compound by default at no cost and can be freely claimed at any moment.
This fee structure is designed to benefit the users and maintain incentives within the ecosystem. The fees are redistributed to users of the ADAFi ecosystem in the delegator’s tree (as kickback) and used to refill the incentives pool (50%), the referral program (30%), and the DAO program (20%).
Finally, staking is required to participate in the DAO program which itself leads to multiple additional passive income sources within the ecosystem as we will describe in the next section.
The ADA Finance DAO Program
A decentralized autonomous organization, or DAO, is an institution or enterprise operated according to a set of rules defined by code, which automatically executes certain actions without the need for intermediaries or a verticalized chain of command. In other words, DAOs create a way for organizations or companies to be structured less hierarchically. This warrants transparent operation and fast-paced responses. At the same time, investors directly steer the direction of the organization as opposed to designated leaders.
In the ADA Finance DAO program, there are 3 levels: Counselor, Minister and Ambassador. The level within the ADA Finance DAO program is determined by the amount of ADAFI tokens staked. Users need to manually claim the DAO title when they have reached the required amount. Engaging with a DAO title will lock the required ADAFI Tokens for a period of time. A delegator with 25.000 ADAFI staked can claim the Counselor title after locking its stake for 3 months. Users are able to upgrade their DAO level while the activation lockup period is still active. So the same user can later become an Ambassador after reaching 100.000 ADAFI staked.
The higher the DAO level, the more passive income a user can earn. While a Counselor receives 3% of ADAFi staking fees, an Ambassador gets 10% of the platform staking fees in addition to other passive income sources from other elements of the ADA Finance ecosystem. Therefore, as your DAO level increases, not only do your opportunities for passive income multiply but so do your options to define the future of ADA Finance also grow. For example, as an Ambassador, you can vote to define the smart contract audits, farming pools, and ADAFi Launchpad.
Hopefully, by learning a little more about the ADAFi progressive staking model and DAO Program benefits in the ADA Finance ecosystem, you have a better understanding of how you can be in control of your passive income. In the next article, we’ll dive into providing liquidity to ADAFi Swap, which allows you to benefit from a dedicated ADAFi Farming rewards pool!