In the Bumper ecosystem, staking and locking tokens are the mechanisms that allow you to participate in governance votes in the DAO, and in this article we'll walk you through the process of staking and locking your BUMP tokens in the Bumper DAO.
In the Bumper DAO, staking and locking are two distinct yet interconnected mechanisms that allow users to participate in governance and earn rewards. Both processes involve the use of BUMP tokens, but they function differently and serve different purposes.
vBUMP is the governance token of the Bumper DAO. When you stake your BUMP tokens, you receive an equivalent amount of vBUMP tokens, which represent your voting power in the DAO. The more vBUMP you hold, the greater your influence in governance decisions.
Staking is the process of depositing your BUMP tokens into the Bumper DAO. When you stake your tokens, you are allocated vBUMP, which is not a token as such (and cannot be traded) but instead is a representation of your voting power in the DAO, allowing you to participate in governance decisions. The more BUMP tokens you stake, the more vBUMP tokens you receive, and thus, the greater your influence in the DAO. Importantly, you can unstake your BUMP tokens at any time without penalty, but doing so will result in the loss of the corresponding vBUMP tokens.
Locking, on the other hand, involves committing your staked BUMP tokens for a specified period of time, up to a maximum of one year. Unlike staking, once you lock your tokens, you cannot withdraw them until the lock period expires. The key advantage of locking is that it provides a bonus amount of vBUMP tokens, thereby increasing your voting power in the DAO.
Bonuses are applied in a linear fashion, with a maximum 1-year lock granting a maximum 2x vBUMP multiplier. For example, if you lock 1,000 BUMP for 1 year, you get 2,000 vBUMP (a 2x multiplier). If you lock 1,000 BUMP for 6 months, you get 1,500 vBUMP (a 1.5x multiplier).
The bonus vBUMP awarded through locking undergoes a linear decay over the duration of the lock period. This means that the bonus vBUMP gradually decreases over time, reaching a 1:1 ratio with the staked BUMP when the lock expires. For instance, if you lock 1,000 BUMP for 1 year and get 2,000 vBUMP at the start, after 6 months, half of the bonus vBUMP would have decayed, leaving you with 1,500 vBUMP.
You may delegate your base vBUMP (that is the vBUMP you receive for staking, but not any bonus vBUMP allocated for locking) to another wallet other than your own through the process of delegation. Delegating your vBUMP to another user effectively means you are either (a) lending them your vBUMP so they can increase their own level of vBUMP to meet the threshold to raise a new proposal and/or (b) lending them your vBUMP so they can proxy vote on your behalf.
You can read more about delegating vBUMP here and view the handy how-to guide here.
To stake your tokens, follow these steps:
Once the transaction has been confirmed on the blockchain, your BUMP tokens are now staked, and you have your vBUMP voting power.
View our helpful step-by-step guide to staking your BUMP tokens.
To lock your tokens, follow these steps:
Once the transaction has been confirmed on the blockchain, your BUMP tokens are now locked, and you have your bonus vBUMP voting power.
View our step-by-step guide to locking your staked BUMP tokens
Staking and locking your BUMP tokens in the Bumper DAO are crucial steps in maximising your influence and rewards in the protocol. By actively participating in the DAO, you can help shape the future of the Bumper protocol and the broader DeFi ecosystem. So, what are you waiting for? Stake, lock, and let your voice be heard in the Bumper DAO today!
Disclaimer:
Any information provided on this website/publication is for general information purposes only, and does not constitute investment advice, financial advice, trading advice, recommendations, or any form of solicitation. No reliance can be placed on any information, content, or material stated on this website/publication. Accordingly, you must verify all information independently before utilising the Bumper protocol, and all decisions based on any information are your sole responsibility, and we shall have no liability for such decisions. Conduct your own due diligence and consult your financial advisor before making any investment decisions. Visit our website for full terms and conditions.
Now's your chance to level up your BUMP token holdings with the launch of the Bumper DAO staking rewards! 6.25 million BUMP tokens will be rewarded over 3 years.
Explore the democratic process within the Bumper DAO. From discussion to decision, learn how BUMP token holders can shape the project's future through voting and active participation.
