Egoras staking is designed to be a palliative to the problem of coin growth. It follows a secure and trustless process of proper currencies. Egoras is ensured to become faster and have a steady increase in value. This is achieved using a smart contract. Egoras system also ensures that early claimers get bonuses, and late claimers are fined. Additionally, larger stakes get more coins and less Egoras is available on the market. This is why the price per coins goes up. Egoras also helps to align incentives. This makes it possible for everyone to do better. It depends on how many individuals take part in.
How Egoras Staking Works
To stake Egoras you interact with the smart contract on the blockchain. You can stake some or all your Egoras to the smart contract. You get to determine how much you’ll like to stake. The bigger you stake, the more bonus you receive. While your Egoras is locked in the smart contract, it earns a share of the 3.12 per cent base inflation rate. Proportional to the size of your stake. That means the bigger you stake, the greater your rewards.
Staked Egoras cannot be transferred or traded. Those coins stay locked into the contract until the end of staking. That means the drawback of staking is that you’re not given a choice to transact with your Egoras.
Egoras staking and the stability of Daric token
Egoras protocol uses the Egoras staking pool to adjust the supply of Daric(a decentralised stable coin pegged to the price of an ounce of gold”xau”) in response to changes in demand. It relies on a number of ‘oracles’ external to the ethereum blockchain to provide feeds of the Egoras price in XAU. To maintain the peg, the protocol allows users to create new Daric token by sending 1 XAU worth of Celo Gold or any listed cryptocurrency to the vault, or to destroy Daric by redeeming 1 XAU worth of Egoras from the vault. This is similar to how fiat-collateralized coins work, except that the trusted third party (e.g. Tether or Circle) is replaced by a decentralized protocol.
When demand for the Daric rises and the market price is above the 1 XAU peg, arbitrageurs can profit by purchasing 1 XAU worth of Egoras, exchanging it with the protocol for one Daric, and selling that Daric for the market price, pocketing the difference. Similarly, when demand for the Daric falls and the market price is below the peg, arbitrageurs can profit by purchasing a Daric for the market price, exchanging it with the protocol for 1 XAU worth of Egoras, and selling the Egoras to the market. These actions drive the market price of the Daric back towards 1 XAU.
Additional mechanisms are needed to prevent the vault from becoming overly depleted when the price of Egoras and other cryptocurrencies supplied by the oracles does not match the market price. This can happen during times of high volatility or when the oracle system is compromised. Without these mechanisms, the protocol may offer to sell Egoras from the staking pool at a large discount, or purchase it at a large premium, depleting the reserve and weakening the protocol’s ability to absorb future contractions in demand for Daric.
To mitigate this risk, the protocol uses a constant-product market-maker model*, inspired by Uniswap, to dynamically adjust the offered exchange rate in response to exchange activity. Whenever the oracle price of Celo Gold is updated, the protocol initializes a new constant-product market-maker that will trade Egoras with other listed cryptocurrencies and Daric with users at the exchange rate provided by the oracle.
If the oracle price is correct, the exchange rate quoted by the constant-product market-maker will be equal to that of the market, and no-arbitrage opportunity will exist. If the oracle price is incorrect, the two rates will differ, and an arbitrage opportunity will exist. As arbitrageurs exploit this opportunity the constant-product market-maker model will dynamically adjust the quoted exchange rate until the arbitrage opportunity is erased.
Egoras Staking Reward
If one per cent of Egoras supply is staked, it attracts an average interest of 312 per cent. Two per cent will attract 156 per cent. Five per cent and 10 per cent will attract 31.2 per cent.
The lesser the number of stakers, the higher the bonus. An increase in the number of stakers will translate into a less circulating supply.
Egoras has a base inflation rate of 3.12 per cent. Based on the total Egoras which is minted per year and paid to stakes. Payout is weekly.
Bigger Pays Better
The Bigger you stake, the more you earn. Trustless Interest
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