🔐The Block TOOLS staking vaults
Handy guide to understand how staking works at Blocktools
Last updated
Handy guide to understand how staking works at Blocktools
Last updated
The first component of the farm (TOOLS - WETH LP Staking) is currently live, below are some key pointers to be aware of.
Demo:
At the outset, adding this feature gives us multi-fold benefits:
A. Is already a product on the Shop, but with this, it becomes a live PoC for touch and feel effects. Anyone can stake 1 Blocktools live on mainnet and interact with the Product along with the rest of the Blocktools community!
B. Having a Staking dapp gives the Blocktools Project a Defi protocol cloak, as we now tick three key boxes for DAO, Net Assets TVL, and now Staking.
C. Helps us to decentralize our liquidity distribution. At the time of writing 22.38% of the WETH-TOOLS LP has been made available for stakers. This increases the sense of ownership and belonging in the Community and incentivizes them to participate in the success of the Project
D. Has a positive impact on circulating supply. With a majority of the holders expected to stake their TOOLS, and no further tokens mintable at a fixed supply of 100,000 (Thereby avoiding emission/inflation pitfalls), the floating TOOLS in the market will reduce significantly as stakers lock up their holdings (at the time of writing 5.3% of TOOLS has already been locked)
E. Provides an additional padding to holders. Lack of emissions/inflation was already a benefit, but additionally, an added extra is the reward component which returns WETH-TOOLS Uni LP tokens to holders. Thereby providing a price padding from the volatility in TOOLS price as the staker will always receive a reward of WETH + TOOLS via the LP Token.
F. Impermanent Loss typically faced by LP providers is a negligible risk here because the holders are not adding to the LP, they are receiving the LP Tokens as an extra over and above their TOOLS holdings. The addition to the LP is happening with the auto-liquidity tax on the TOOLS token itself.
G. Incentivizes long term vision. Decentralizing liquidity and passing it on to holders helps to engage deeper with the community in the hope that they develop a long term vision in line with the success of the Project. This is dependent on market forces, nonetheless there is a significant up-side to providing the platform for long term holders to slowly trickle in.
H. The staking itself has a 1/1 Tax for Staking/Unstaking. This again provides an additional tollgate for the Project to ensure that short term traders give something back while long term holders that intend to stake longer would gain LP Tokens far over and above the tollgate. This tax will form the basis of a 2nd staking pool.
Head to Legacy UI: Blocktools.org/workshop (you will need TOOLS, available on Uniswap, P2B and CoinW exchanges) Migrated UI: https://www.blocktools.org/pool1
Enter the desired quantity of TOOLS to stake and click “Approve”
Enter the desired quantity of TOOLS to stake and click “Stake”
Enter the desired quantity of TOOLS to unstake and click “Unstake”
Click “Claim Rewards” to periodically claim LP Tokens (to save gas it is recommended to let it accumulate for a longer duration as per the holders convenience and risk appetite)
Track the Staking performance via the simple UI provided
The rewards have been split into 6 Tiers (Tier distribution has been addressed in earlier communications and has been visible on your Dashboard profile on the Workshop)
The above code snippet throws light on the reward calculations for TOOLS stakers. In laymans terms below is an easy primer.
If the Reward Pool has 100 LP Tokens, this is how each Tier will accrue rewards:
Tier 6: Tools balance greater than 1200 gets an allocation of 35% of the Tools LP Balance in the pool.
Rewards: Tools LP Balance (example as 100) x 5 (at 0.5% reward) x (1 day) 1 x 35 (35% of LP balance allocated for Tier 6) / 100000
Tier 5: Tools balance greater than 701 gets an allocation of 25% of the Tools LP Balance in the pool.
Rewards: Tools LP Balance (example as 100) x 5 (at 0.5% reward) x (1 day) 1 x 25 (25% of LP balance allocated for Tier 5) / 100000
Tier 4: Tools balance greater than 351 gets an allocation of 20% of the Tools LP Balance in the pool.
Rewards: Tools LP Balance (example as 100) x 5 (at 0.5% reward) x (1 day) 1 x 20 (20% of LP balance allocated for Tier 4) / 100000
Tier 3: Tools balance greater than 151 gets an allocation of 10% of the Tools LP Balance in the pool.
Rewards: Tools LP Balance (example as 100) x 5 (at 0.5% reward) x (1 day) 1 x 10 (10% of LP balance allocated for Tier 3) / 100000
Tier 2: Tools balance greater than 51 gets an allocation of 7% of the Tools LP Balance in the pool.
Rewards: Tools LP Balance (example as 100) x 5 (at 0.5% reward) x (1 day) 1 x 7 (7% of LP balance allocated for Tier 2) / 100000
Tier 1: Tools balance greater than 1 gets an allocation of 3% of the Tools LP Balance in the pool.
Rewards: Tools LP Balance (example as 100) x 5 (at 0.5% reward) x (1 day) 1 x 3(3% of LP balance allocated for Tier 1) / 100000
Tips:
Hold on to LP Tokens to earn Fees
Split LP tokens to cash out and sit on ETH + TOOLS
Split and convert the ETH to TOOLS and add the additionally acquired TOOLS to stake to compound earn more LP
How much is 1 LP worth?
Check the TOOLS Staking Dashboard: 1 LP Value (USD)
How to Manage:
Go to Uniswap -> More -> V2 Liquidity -> Import Pool
Add TOOLS ca and check your LP performance
How to add to wallet:
Click on the “Add to Wallet” button on the Dashboard.
At the time of blueprint, the price of the highest tier, 1200 TOOLS, was $2400. We believe that since price is the main driver of Project engagement and interest, it only makes better sense to incentivize large holders to stake, stake for longer, and earn the highest reward, simply because their exits typically cause extreme volatility on the charts.
However at the same time those holding lesser TOOLS are still anyways earning the same reward rate (0.5%). The only difference to put it simply is, there are 6 pools within this 1 pool, all paying the same reward rate, but the available reward quantity in the pool varies based on holdings. Therefore someone holding a larger amount of TOOLS will enjoy a long term steady supply of TOOLS LP to earn as rewards, whereas the lesser holdings pool will run dry quicker.
This is in Blocktools opinion how it should be, because:
A. A long term believer in the Project will not mind upgrading his Tier to get a share of the larger pool
B. Someone de-risking but retaining some TOOLS still has the opportunity to continue earning based on the Tier they belong too
C. The established Tiers also help us to track and manage earnings redistribution (shop), whitelist & airdrop eligibility (launchpad) and referral bonuses
Like everything else at Blocktools, this remains a scalable feature. A rescue feature has been baked in allowing the Deployer access to manage the Pool contents. This means that scaling to a sharper V2 is possible, also holders can utilize the DAO to vote on matters such as Fee on stake/unstake, Minimum stake, doing away with this and improving the reward structure. doing away with the Stake altogether! A good number of possibilities can be covered as a result depending on what the governance deems fit.
Staking CA: 0x9768E642A7Dc053cda11e8F3362C5E276b64D288
TOOLS WETH LP CA: 0xDaE6d9662C4904026AC311a5fDc8917FDc51971A
TOOLS CA: 0xc14B4d4CA66f40F352d7a50fd230EF8b2Fb3b8d4
TBC.
$1,800,000 in TVL and $320,000 in rewards from Pool 1 later, we are now commencing operations in Pool 3.
What about Pool 2? As participants may recall, Pool 2 was to initialize with a reward of $25,000 to begin with. Then, a vote was conducted based on community feedback to include WETH as a reward. The vote ended 50–50 in favor of TOOLS / WETH.
Therefore a decision was made to have two Pools (Pool 2 for WETH rewards and Pool 3 for TOOLS rewards) instead of 1! However, with an initialization at $25,000, splitting that would have resulted in two Pools of $12,500 each.
Therefore at the present moment, Pool 3 is going live (favorably, the rise in TOOLS Marketcap has increased the rewards pool value to $45,000!), and Pool 2 will follow basis WETH accumulation via Tax and or Revenue.
The below primer will help you navigate it.
Head to
Legacy: Blocktools.org/workshop
Migrated: https://www.blocktools.org/pool3
You will need ETH-TOOLS LP Tokens.
LP Token Contract Address: 0xDaE6d9662C4904026AC311a5fDc8917FDc51971A
This is available as an earned reward from Pool 1, or can also be generated manually by adding liquidity to Uniswap)
How to add Liquidity to procure LP Tokens:
Click More -> V2 Liquidity -> Add V2 Liquidity -> Supply 50% $ value ETH and 50% $ value TOOLS
Demo on how to Stake:
NOTE: Minimum Stake is 1 LP Token + 1% Tax, therefore use 1.01+
There is no maximum stake.
Enter the desired quantity of LP Tokens to stake and click “Approve”
Enter the desired quantity of LP Tokens to stake and click “Stake”
Enter the desired quantity of LP Tokens to unstake and click “Unstake”
Click “Claim Rewards” to periodically claim TOOLS Tokens (to save gas it is recommended to let it accumulate for a longer duration as per the holders convenience and risk appetite)
Track the Staking performance via the simple UI provided
The rewards have been split into 6 Tiers.
The above code snippet throws light on the reward calculations for TOOLS stakers. In laymans terms below is an easy primer.
If the Reward Pool has 100 LP Tokens, this is how each Tier will accrue rewards:
Tier 6: LP balance greater than 20 gets an allocation of 35% of the Reward Balance in the pool and the highest interest rate of 0.6%
Rewards: TOOLS Balance x 6 (at 0.6% reward) x (1 day) 1 x 35 (35% of Reward balance allocated for Tier 6) / 100000
Tier 5: LP balance greater than 12 gets an allocation of 25% of the Reward Balance in the pool at an interest rate of 0.5%
Rewards: TOOLS Balance x 5 (at 0.5% reward) x (1 day) 1 x 25 (25% of Reward balance allocated for Tier 5) / 100000
Tier 4: LP balance greater than 8 gets an allocation of 20% of the Reward Balance in the pool at an interest rate of 0.4%
Rewards: TOOLS Balance x 4 (at 0.4% reward) x (1 day) 1 x 20 (20% of Reward balance allocated for Tier 4) / 100000
Tier 3: LP balance greater than 4 gets an allocation of 10% of the Reward Balance in the pool at an interest rate of 0.3%
Rewards: TOOLS Balance x 3 (at 0.3% reward) x (1 day) 1 x 10 (10% of Reward balance allocated for Tier 3) / 100000
Tier 2: LP balance greater than 2 gets an allocation of 7% of the Reward Balance in the pool at an interest rate of 0.2%
Rewards: TOOLS Balance x 2 (at 0.2% reward) x (1 day) 1 x 7 (7% of Reward balance allocated for Tier 2) / 100000
Tier 1: LP balance greater than 1 gets an allocation of 3% of the Tools LP Balance in the pool at an interest rate of 0.1%
Rewards: TOOLS Balance x 1 (at 0.1% reward) x (1 day) 1 x 3 (3% of LP balance allocated for Tier 1) / 100000
Common Errors and FAQs:
Gas too high when trying to claim: You have not reached the 24 hours limit
Gas too high when trying to stake: You have not approved the Staking CA to spend the LP Tokens on your behalf
Dashboard not displaying Staking Info: Clear Cache and make sure you are connected using Metamask on an account that holds the LP Tokens balance or has staked LP Tokens
No more rewards being earned: You are in a Tier that has exhausted it’s pool allowance — Upgrade to the next Tier or unstake and retain your TOOLS LP
What is stake/unstake Tax used for: Circles back to Pool 1
Can I unstake anytime: Yes, there is no lock-in tenure. Note you will pay 1% tax everytime you stake or unstake
When should I claim rewards: Claim it at your convenience, different strategies apply, common sense is to await larger accumulation and low gas cost to claim periodically. Ensure to claim rewards regularly.
Can I add to Stake: Yes you can add to existing stakes without impacting your prior stake. When in doubt, claim rewards prior to updating
I unstaked some amount but am still staked for some amount: Check the tier you fall into after unstaking, the revised Tier calculation will apply based on the leftover amount that is in the stake
What is an LP Token, why is it needed: https://docs.uniswap.org/contracts/v2/concepts/protocol-overview/how-uniswap-works
My earned rewards is fluctuating: This is normal, as people constantly join and leave the pool, the code will need to re-calibrate the available rewards allocated for that Tier and manage distributions for the new number of stakers in that Tier accordingly (whether lesser or more).
Engaging with any cryptocurrency offering is a risk. Volatility is rife. You can seek counsel from qualified financial advisors on whether or not any of the Blocktools offerings is within the realm of your risk appetite and or a worthy investment for you. We neither endorse nor recommend engaging with anything financial without first assessing the possible outcomes.
