CORE CONCEPTS
Yesterday you learned how to swap tokens on a decentralized exchange. Today we’ll swap tokens to effectively acquires the crypto equivalent of “shares” in a decentralized autonomous organization (DAO). Then we’ll stake our tokens to earn rewards from the DAO.
Trade for $KLIMA
Go back to Zapper and click the Swap link (or just go here). Double-check that you’re using your MetaMask enabled browser and still connected to the Polygon network.
Once you’re in, set-up the following swap:
- From: WETH
- To: KLIMA
- Number: 0.01 (a small amount)
Click Approve and Confirm on MetaMask.
Then Exchange and Confirm to execute the swap.
Go to your Zapper homepage and you should see some $KLIMA tokens in your wallet.
Connect to the Klima DAO dapp
Klima is a decentralized autonomous organization (DAO) that is trying to create a digital currency backed by real carbon assets. I’ll explain more about “DAOs” in tomorrow’s article. I won’t attempt to explain the economics behind Klima’s carbon-backed reserved currency. (I will include some links in the “Further Reading” section if you’re interested in exploring this concept further.)
Today you’re just going to “ape” into buying a token without doing your own research.
Start by going to the Kilma DAO dapp: app.klimadao.finance. You should come to a dashboard that prompts you to “Stake KLIMA” and looks like the page below.
Connect your wallet and then click Next and Approve on MetaMask. Your are giving the dapp permission to see if you have any $KLIMA in your wallet.
The homepage dashboard should update, and now show a Balance equivalent to the amount of KLIMA you swapped for a few minutes ago. Your balance of sKLIMA (“staked KLIMA”) is 0.
Stake your $KLIMA tokens
Staking tokens is a bit like putting money into an interest-bearing savings account. By staking them, you are giving the network capital to work. You are rewarded for staking with voting power and additional tokens as rewards.
Just like a bank account, you can unstake them and remove your tokens at any time. Unlike a bank account, the reward for staking your tokens can often be an APY well above 10%.
In Klima’s staking widget, click the Max button and then click Approve. This is the first part of the transaction. When MetaMask pops up, click Confirm.
The transaction will take a minute or so to process. Then you’ll get a second prompt on the Klima page to Stake. Click Stake and click Confirm on MetaMask. You’ve just staked all of your $KLIMA.
Once the transaction is complete, your dashboard will update. You should see all of your KLIMA moved into the sKLIMA balance.
Recap
What just happened? You just bought and staked a token created by a decentralized autonomous organization (DAO). You will earn rewards (in their token) and you will get the right to vote in their governance forum in proportion to the number of staked tokens you hold.
I’ll explain more about DAOs and voting in the next post.
There are some similarities between DAO tokens and corporate stock. Staking a token is like taking your shares off a public exchange, so there are fewer shares on the liquid market for people to buy/sell, and, in return, getting additional stock payouts and voting rights at shareholder meetings. There are some important differences too, so don’t get too hung up on this analogy.
To end the day, go back to Zapper and scroll down to see your Klima holdings reflected in your portfolio.
