Staking
Last updated
Favrr Tokenomics
Last updated
Staking is a critical aspect of the Favrr system, since it provides liquidity for the internal trading of ERC1155 tokens. Stakers enjoy high rewards on the Favrr platform and additional benefits, as their tokens will be transferred by Favrr to one or multiple stock NFT AMM pools to facilitate trading. As such, they risk impermanent loss, but also receive trading fees from the respective pool. Staking the Favrr token ($Favrr) will provide stakers with several advantages:
Discount on stock NFT prices
Passive yield in kind
Fee discount
Let’s outline two possible scenarios:
User A stakes 100,000 $Favrr tokens for 1 year and receives Level 2 benefits.
Favrr takes the 100,000 locked tokens and allocates them to Pool 1 for a total of 200,000 $Favrr tokens and 200,000 Madonna stock NFT. User A thus has 50% of the $Favrr in the pool.
At the end of the year, User A decides to withdraw their tokens.
Scenario 1: Pool 1 now has 50,000 $Favrr and 800,000 Madonna FAVEs (stock NFTs) at that point. User A will receive 25,000 $Favrr and 300,000 NFTs - 50% the excess stock NFTs from when entering the pool, i.e. 50%*(800 000 - 200,000) = 300,000.
Scenario 2: Pool 1 now has 500,000 $Favrr and 50,000 Madonna stock NFTs. User A will receive 100,000 $Favrr upon withdrawal and no NFTs.
With each withdrawal, Favrr will rebalance the amount of NFTs in the pool in order to keep the price constant.
In conclusion, in case the pool contains fewer Favrr tokens than the staker added to it, they will receive a compensation of stock NFTs.
Disclaimer: Token Incentives
The token incentive mechanisms described in this section are subject to regulatory approval and compliance with applicable laws and regulations. Specifically, the mechanisms for providing liquidity to external and internal AMMs, staking rewards, redistribution of $Favrr tokens, and fee-sharing arrangements may currently meet the definition of a security under the U.S. Securities and Exchange Commission (SEC)'s current regulatory framework. At this time, these features is not implemented yet. However, we are optimistic about the evolving regulatory landscape under the leadership of the new SEC head (as of Dec 2024), who has demonstrated a crypto-friendly stance. Should SEC policy or guidance change to allow such mechanisms, we plan to deploy this model in full compliance with future regulations. Until then, these mechanisms are described here as part of our forward-looking vision for $Favrr's role in fostering a dynamic and engaging ecosystem. We will prioritize transparency and regulatory compliance in all token-related activities.
In the table above:
Tokens are the number of tokens required to achieve the level.
% of total represents the tokens needed as % of the total token supply.
FIAT cost is the FIAT equivalent of those tokens based on the highest token sale price.
Difficulty inc. is the increase in the number of tokens required between different levels.
Once the project is up and running on the mainnet and data is available on how real users act and what the token price is, it may be necessary to change the estimates above. The platform also reserves the right to cap the net value of the maximum benefits at each level.
For reasons of comparison, we've also included the staking plans of a few other prominent coins:
