In our previous blog, we introduced RAFT tokenomics, providing a brief glimpse of how veRAFT fosters community engagement and long-term commitment.

Let's dive deeper into veRAFT's mechanics and discover the benefits it offers to the community.

RAFT Use Cases

RAFT serves two primary functions within our ecosystem:

1. Staking: RAFT token holders can provide liquidity into the RAFT/R 80:20 Balancer pool and stake their Balancer LP token (BPT) into the Raft staking contract for up to 24 months.

2. Governance: RAFT token holders who stake their RAFT Balancer LP tokens receive veRAFT, which can be used to participate in the protocol decisions through governance voting, shaping the future of Raft.

In the future, the Raft DAO can explore the possibility of sharing protocol revenue with veRAFT holders as the Raft protocol gets further into its path to sustainable profitability.

The choice of an 80:20 Balancer pool is twofold:

• Ensuring a well-capitalized 80:20 pool guarantees ample on-chain DEX liquidity for seamless RAFT trading

• Pairing RAFT with R contributes to bolstering R's buying pressure, positively impacting its peg stability

RAFT Token Staking

Users interested in staking their RAFT LP tokens can choose staking periods ranging up to 24 months.

The RAFT token emissions directed towards RAFT LP Stakers amount to 10% (250,000,000 RAFT) of the total RAFT supply and are evenly distributed over three years.

Mechanics of the Staking Mechanism

The algorithm in the staking contract factors in both the amount of RAFT staked and the duration of the staking period. However, the latter is much more important than the former in determining the voting power and share of emissions a user is entitled to receive!

For instance, a user who stakes $100 worth of RAFT for 2 years could receive up to 1.5x as many emissions and 3x higher APR when compared to another user who stakes $200 worth of RAFT for 1 year. The staking program provides a consistent stream of rewards for users regardless of the amount staked as the time commitment is valued more than the capital commitment.

Wrap Up

The Raft LP staking mechanism promotes active engagement from the community and rewards long-term commitment. By linking governance power to staking duration, the Raft community will be better aligned and benefit from Raft’s long-term growth. Through these measures, we aspire to nurture a resilient, unwavering community of token holders fully committed to the Raft’s success.

Read more here.

Useful Links

• Website: https://www.raft.fi/

• Twitter: https://twitter.com/raft_fi

• Discord: https://discord.com/invite/raft-fi

• Telegram Channel: https://t.me/raft_fi

• Telegram Group: https://t.me/raft

• Documentation: https://docs.raft.fi/