An update on $TEAK, Staking Contracts, and something new on DeFi: APR-M

Hey there Kangalians,

We wanted to give an update on the work related to Utility Token $TEAK’s contract, staking contracts, and where we are at this point. Plus some details on our reasoning and diving into how staking on Kangal Ecosystem will work.

First of all, when it starts, our Beta period will be on BSC side. If you would like to participate the Beta period and you are currently on ETH side, you can either use the BurgerSwap bToken bridge or you can simply deposit to Hotbit as ERC-20 and withdraw BEP-20 version.

The way the regular staking contracts work and their shortcomings

The way a regular staking contract works is generally by setting a constant reward amount per block and dividing the rewards proportionally to the staked amount. We believe there are some shortcomings of this approach.

The first one is impossibly high APRs that rekt the tokenomics of any projects that have such a staking pool. This happens when block rewards are either too high or there are not enough participants staking, hence the APR goes through the roof.

The second one is the way these staking pools are created is not decentralized. To create a staking pool you need to have these tokens minted at some point, either reserved at the project creation or minted at a later point. It is not decentralized because the project team needs to decide on the amount to be rewarded, keep it, and then put the amount to the pool.

Lastly, it is not really fair since these tokens come into circulation is not only by staking. High APR staking creates immense sell pressure and many who paid to get the tokens can find themselves in the red zone easily.

Staking on Kangal ecosystem and APR-M

KANGAL and KANGAL-LP staking is going to be a crucial part of the ecosystem since the only way to create supply for the ecosystem’s utility token $TEAK will be by staking. This means the holders, through DAO, will be controlling the tokenomics of $TEAK by setting the APR-M rate and staking their holdings. Kangal will be the first project where holders are in control of minting rights.

The way this is going to work is by doing the minting all on-chain through contracts talking to each other. When you get your staking rewards you will not be getting it from X amount of tokens that were minted at some point and then distributed. When you withdraw your deposited tokens and the rewards, you will be triggering the staking contract to go and ask the $TEAK’s minter function to freshly mint the tokens and send them to your wallet.

Since the staking will result in rewards being minted when you withdraw them, we need a different way to represent the earnings. And APR-M comes into play here, which means Annual Percentage Rate of Mint. This value will be used to calculate the percentage of rewards to be minted for staking. Thanks to these rates we will be able to foresee the maximum emission amount in a year. Later as we build the ecosystem and $TEAK gains value, DAO will be able to move the needle on emission levels by updating the APR-M values for available types of staking. Additionally, $TEAK will be burned in various ways which will also be configured by the DAO.

We believe staking with rewards in APR-M directly minted by contracts, and not having any other way of emission other than staking will fix the problems with decentralization and fairness.

Current progress and some concrete examples

$TEAK contract is done, it is a basic ERC-20 interface contract with ownership control around minting, which is going to be used for staking rewards.

Staking contracts are 90% done. Let me give you an explanation of how the staking will work on our platform from a user’s perspective:

As a user, you stake KANGAL or KANGAL-LP tokens on our dApp. This will be a similar experience to any pool-related operation you do on PancakeSwap or Uniswap or BurgerSwap. We will be starting with KANGAL and KANGAL-LP staking, with different APR-Ms (Annual Percentage Rate of Mint).

Rewards will be calculated by the amount of KANGAL’s you provide and the APR-M rate. Let’s say there’s 50% APR-M for KANGAL staking and 150% for KANGAL-LP staking and you staked 1,000,000 KANGALs. If you staked them as KANGAL, you would get 500,000 $TEAK in one year. And if you staked them as KANGAL-LP (to account for LP being a pair this would actually be the number of KANGALs multiplied by 2, since LP would be half KANGAL and half BNB/ETH) you would get 1,500,000 $TEAK in one year.

When you want to withdraw, you just come to dApp and withdraw your tokens and rewards. In the first version, the only requirement to be able to get your $TEAK reward calculated for the amount of time you staked with the APR-M reward will be keeping your tokens staked at least for one day. Other than that there will be no other restrictions for staking. If you withdraw your tokens before 24h, you only get back your staked tokens and you won’t be getting any rewards.

What’s next?

Related to development, next is dApp development, audits, testing on BSC Testnet and then finally the deployment.

Next for all of us is a discussion around these topics, your suggestions related to APR-M rates, and deciding on the date for the APR-M votes.

We will also show you some sneak peeks from the staking dApp UI in the upcoming days.

Thank you for your support Kang Gang, and much love! :v:

5 Likes

Love the problem solving! Suggestion- a lot of tokens have 3 7 14 and 30 day wait periods to unstake. I think we should have 2 to 3 day wait period. It discourages jumping in and out of staking plus if the rewards are atractive it wont deter people from staking. Ours will be one of the lowest wait periods among the tokens that have you wait.

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This short waiting periods is a good idea. Also we may give governance voting rights just to the people who is providing kangal and kangal-bnb lp. what do you think about this? 1inch dapp governance system might be a good example.

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I think the waiting period is something useful for sure. It would be better to do it in the next iteration with different APR-M rates for locking so that we can keep complexity low at this point.

What do you think?

Also, feel free to suggest APR-M rates for KANGAL and KANGAL-LPs.

1 Like

Hi all first of all! this is my first comment.

Congratulations for new update on staking contracts

  1. It makes sense to give different APR-M ratios to different staking times (maybe it can be locking mechanism). More staking period must be more APR-M logic can work . This option is good for long-term investors and token price stability.

  2. Rate model can be an exponentialy growing model, such as the Compound Interest Rate Model. When supply high , rates going to low (inverse proportion). Regardless of this model, the APR-M should not be too high because high rates is a trust-breaking issue (from where i stand) . If we are a project that wants to take firm steps towards its goal, the investor should be trusted.

In kangal we trust :hugs:

2 Likes

About governance: right now we really do not have any time to work on it but it’s definitely something we will come back to in the future.

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