Penalties for Early Unstaking
There is only one way to stake in Favrr, as discussed previously - with a mandatory 1 year lock-up period. However, users can withdraw earlier at the expense of a penalty rate on their rewards and stake:
PR = 50% x R + 5% x P
Where
PR is Penalty Rate
R is the reward tokens
P is the principal, ie.e. the initially locked amount
The Favrr platform will deduct the token penalty from the respective user’s accumulated rewards, and return the Favrr tokens to the platform’s Treasury. Let's Let’s illustrate the above with two practical examples:
Stake with duration
User A stakes 1,000 Favrr tokens.
Before the stake duration expires, the user decides to unstake all tokens. The user has earned 100 Favrr in rewards.
The amount of the penalty that it will incur is 20.0% x 5 = 100.0% penalty.
Disclaimer: The implementation of the above feature is subject to compliance with applicable laws and regulations. At this time, it may not be deployed due to current regulatory restrictions. However, we remain committed to adapting to evolving regulatory frameworks and will implement this feature in full compliance should circumstances permit.
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