Staking of SI Tokens allows to participate in SI Governance and to decide which projects will be part of SI Pools. At the same time, SI Governance secures SI pools against defaults.
Stakers are a part of the insurance system of SI Pools. If a project borrower defaults, up to the specified liquidation factor (currently: 10%) of staked SI Tokens can be liquidated to compensate for the occurring default. To bear this financial risk, all Stakers receive a portion of the return from all active projects within the specific SI Pool.
Stakers select to which SI Pool they want to stake their SI Tokens (currently: Sunny Pool). Stakers have the possibility to unstake at any time. However, there might be a cooldown and withdrawal period (see Unstaking SI Token).
All Stakers have the opportunity to participate in the voting processes or to select a delegate to participate in the voting of projects on their behalf. Through the voting process, new projects are added to the specific SI Pool. For each vote on a project proposal, voters receive monthly SI Rewards over the duration of the voted project. For more information about the voting and project approval process, please click here
Incentives for Staking
Staking in SI Network is rewarded with 50% of the protocol fee of the selected SI Pool as well as additional community rewards. Stakers of SI Tokens receive their rewards in the form of SI Tokens, which they can claim directly over the platform. Rewards are not automatically staked and therefore cannot be liquidated. Only SI Token holders who stake their tokens have the opportunity to participate in the Project Approval Process of the SI Pools and vote on which projects can become part of the selected pool. Therefore, only through staking SI Token holders are eligible to vote and earn additional rewards. Stakers can also delegate their voting power to external persons or organizations (e.g. UNDP).
Risks of Staking
Stakers of SI Tokens take the financial risk that parts of their staked SI Token will be used to cover loan defaults within the selected SI Pool. Liquidation is carried out regardless of the voting history. If a project within a SI Pool has failed, SI Tokens may be liquidated by all participants in the corresponding pool, regardless of whether they voted for, against or did not vote on the project. Staker hedge the entire pool rather than individual projects. The maximum SI Token holder may lose in case of liquidation is specified by the displayed liquidation factor (currently: 10%).
Unstaking SI Token
In order to prevent the advantages of known payment periods, a cooldown period (currently: 14 days) must be passed within the unstaking process. After the cooldown period SI Token Holder are able to unstake SI Token within the withdrawal time window (currently: 2 days).
Process of Staking
Please click here to view the entire staking process.