Fee Share for Stakers

August 22nd, 2024

Today, a highly anticipated upgrade is coming to Kwenta's staking mechanism, designed to maximize rewards for our loyal $KWENTA stakers and streamline our fee distribution process. These changes, approved through KIP-125 and KIP-127, mark a new era in Kwenta's staking ecosystem. Let's break down these changes and what they mean for you as a $KWENTA staker.

This upgrade comes with several technical changes

What has changed?

While the KIPs referenced above approved rewards distribution to stakers and outlined a technical approach, there are four main changes to staking which enable these rewards, and which are now active.

We're implementing a new default policy for fee distribution. Fee share from new and future integrated protocols will be redistributed to KWENTA stakers on Optimism. This includes new integrations like Perennial on Arbitrum and any future protocol integrations. The treasuryDAO will manage the capture, bridging, and redistribution of these fees, and $KWENTA stakers directly benefit from the platform's growth.

Dual Token Rewards

KWENTA and USDC The StakingRewards contract has been upgraded to support both $KWENTA and $USDC rewards. This means you'll now earn two types of tokens for your staking efforts.

$KWENTA: Continues to accrue from inflationary rewards and early vest fees.
$USDC: Continuously streams as fee share from Synthetix, Perennial, and future integrations are sent to the contract.

This technical upgrade allows the immediate start of all $USDC rewards, including the backlog of rewards since the launch of Synthetix v3. This rewards backlog will be distributed at 10,000 $USDC per week in addition to ongoing rewards. By spreading the distribution of the $USDC backlog over time, long term stakers are rewarded.

Continuous Reward Accrual and Distribution

We've revamped how USDC rewards accrue and distribute. Now, USDC rewards will accrue continuously with weekly additions to the StakingRewards contract. There's no longer a need to wait for large thresholds, ensuring more predictable and frequent rewards, especially benefiting smaller stakers.

Stakers can now participate in the platform's growth

What should I do?

Okay, this all sounds great. But how do I take advantage of this new change as a staker, or potential staker?

If you're already staking KWENTA

You’re already earning! These upgrades will automatically apply to your staked tokens. You can see your accrued USDC rewards on the staking page and claim at any time.

Claim all rewards and compound your $KWENTA stake on the staking page

For those considering staking.

If you’d like to stake your $KWENTA, ensure that your $KWENTA tokens are on the Optimism network. If you have tokens on another network, you can bridge to Optimism via Celer Bridge. If you don’t yet have $KWENTA tokens, you can get $KWENTA on the Optimism network using your favorite swap aggregator (we like LlamaSwap, but it’s up to you!)

Once your tokens are on Optimism, simply visit our staking page and consult our documentation for step-by-step instructions.

Looking Forward

This change represents the first of several planned changes to Kwenta’s tokenomics system. By enabling $USDC streaming, Kwenta is laying the foundation for our revolutionary $KSX upgrade, described in KIP-123. $KSX, a liquid staking derivative built on the $KWENTA token, will enable automated buybacks and compounding in a multichain token designed to provide deeper liquidity and a simple user experience.

These tokenomics upgrades work alongside Kwenta’s new integrations and chain expansions as we unveil Kwenta’s innovative derivatives marketplace — a powerful one-stop-shop for onchain leverage.