Staking

Why Staking

The goal of OGN Staking is to transfer both economic and governance power to those most committed to the long-term success of the protocol.

Origin's products are built for the long term. As such, we need community governance that is similarly focused on the long-term good of the protocol. We incentivize long-term thinking by having users lock Origin Tokens (OGN) temporarily in exchange for economic and voting power in the form of (xOGN). The longer users choose to stake, the more power they receive. This ensures that power is held by those who are most committed to the long-term success of the protocol. In return for staking OGN, users not only earn the ability to create proposals and vote on the future of the protocol. They are also rewarded with additional OGN derived from protocol revenue. These rewards can be collected at any time.

Economic & Voting Power Calculation

To receive voting power in the form of xOGN, you stake OGN for a duration of your choice between 1 month and one year. You always have the option to withdraw your OGN, though if you do so before your selected lock period ends, you will incur a penalty.

The amount of xOGN you receive is based on two factors: the amount of OGN you stake and the end date (expiration) of the lock-up. A multiplier is applied to the OGN amount to calculate the resulting xOGN amount, and this multiplier increases according to the length of the lock-up. In other words, the further into the future the end date is, the higher the multiplier. If two users stake the same amount of OGN on different occasions but their lock-up periods end on the same date, they will still receive the same amount of xOGN. The user who stakes earlier will accrue more rewards and be able to exercise her power earlier, but both users will have the same power once they have staked the same amount with the same expiration.

The staking multiplier curve is exponential. The multiplier grows by 1.4x over one year. As a result, a 1-year stake will be approximately 1.4x times larger than a 30-day stake. Extending stakes works similarly. If you extend your stake by a year, you immediately receive a 1.4x multiplier on your xOGN for that stake since the end date has moved forward by a year.

The maximum staking duration is 1 year. The minimum is 30 days.

Over time, the effective power of old stakes is diluted by newer stakes having larger multipliers. When the lock-up period ends, you keep your economic and voting power until you choose to unstake. The way to maximize your power is to stake for the full period and regularly extend the lock-up period. You can also compound your power by claiming accrued rewards and staking them to increase your xOGN balance.

Comparing xOGN to veCRV

If you're familiar with Curve Finance's governance token model, you'll notice that ours is similar in many ways. When designing the xOGN model, we were initially inspired by veCRV and borrowed the general concept of rewarding longer-term stakers with significantly more power. However, we introduced several improvements that drastically reduce the code complexity and gas costs for stakers of OGN. Here are a few differences between the two implementations:

• OGN holders can stake for multiple periods from the same Ethereum account.

• OGN stakers can delegate their votes, allowing for users to participate in governance from a hot wallet while holding a large amount of OGN in a cold wallet or with an insured custodian.

• xOGN uses an exponential decay function as opposed to veCRV's linear equation.

• veCRV holders see their balances go down as time passes, ending at 0 when their lock-up periods expire. xOGN holders see their balances remain the same throughout their lock-up periods. Instead of their balances falling, their share becomes a lower percentage of the overall vote-escrowed token supply.

Staking Rewards

Rewards for staking OGN can be collected at any time. These rewards are generated from OETH and OUSD performance fees. In addition, Origin is funding a 1-year incentive program of ~6.84 OGN/ block to OGN stakers, beginning May 28, 2024. These rewards are a bootstrapping mechanism that will ultimately be replaced by more sustainable protocol revenue. As a reminder, 20% of all yield generated by OUSD and OETH is collected as a protocol fee. Half of this fee is used to buy back OGN on the open market to be distributed as additional rewards for stakers. The remaining half goes toward purchasing flywheel tokens to boost yield generation for OETH. While this protocol revenue will start as a small percentage of the rewards, we anticipate it will become the primary source of rewards as Origin product adoption grows. Visit the Origin dapp at Originprotocol.eth.limo to stake your OGN