A Guide To Staking
The Processes and Functions of FUZN and yFUZN.
FUZN is the governance token of Fuzion. Staking FUZN is how our token holders participate in decision making regarding our protocols, development decisions and other general community based decisions relevant to our protocols and products.
Stakers of FUZN are eligible to earn yield generated from Fuzion’s products. This is distributed using a token called yFUZN.
What Is FUZN?
FUZN is our standard CW20 token and has a static supply of 200,000,000 (two hundred million). The number of tokens in circulation, vesting and yet to be migrated from Terra can be viewed on our dashboard.
Staking
FUZN is primarily a governance token. A holder’s weight regarding any vote relevant to the protocol is proportional to the amount of FUZN staked relative to the total amount staked.
The governance process ensures that owners of the token have the opportunity for fair representation in the management and progress of the Fuzion protocol.
Staking and unstaking is done via the Fuzion dashboard, where users can also view their staking totals, review governance proposals and, if required, cast their vote.
While tokens are staked, they cannot be transferred from the wallet which owns them. This means they cannot be placed in an order on a DEX or CEX, used as collateral for a loan, or to provide liquidity on an AMM.
Bonding And Unbonding Periods
In order to discourage acts of bad faith, opportunism and manipulation, staking and unstaking includes a bonding and unbonding period.
When staking FUZN, a holder is only eligible to participate in a governance vote that was created prior to the end of the bonding period.
The bonding period is 00 days, and commences from the block recording the successful staking transaction.
This requires a degree of diligence from FUZN holders, and is designed to encourage participation, and discourage attempts to manipulate governance or abuse yield distributions, promotion or rewards for stakers.
Unbonding FUZN follows a similar process for much the same reasons. The unbonding period is 14 days from the successful unstaking transaction.
During the bonding and unbonding periods, FUZN will not be counted as staked and as such will carry no weight in governance.
Minting yFUZN
When FUZN is bonded, a yFUZN token is minted. This has many similar attributes to FUZN. It can be transferred from one wallet to another, sold on a DEX or swapped on an AMM, placed in an OTC deal, used to provide liquidity or offered as collateral.
1 yFUZN is minted for every FUZN staked. When an address has successfully staked FUZN, the corresponding amount of yFUZN is minted and transferred to the address.
While yFUZN can be used in many ways, it has 2 principle functions: It is a representative of the yield due to the staked FUZN and it is needed in order to successfully unstake FUZN.
Earning Yield With yFUZN
Fees earned by Fuzion protocols like Plasma and Pilot are distributed amongst the addresses which have staked FUZN. It is necessary to stake yFUZN in order to be eligible for and receive a share of these fees when they are distributed.
FUZN stakers may prefer not to stake their yFUZN, electing to use them in another way. Doing so forfeits their share of the yield, which is distributed to staked yFUZN only.
Unstaking FUZN
Unstaking a FUZN token is done by burning a yFUZN token. This means the address needs 1 unstaked yFUZN token available to the address to initiate the FUZN unstaking process.
Once the unstaking tx is successful, the yFUZN is burned and the staked FUZN enters the unbonding period.