# 🦑 Staking

## What is Staking

Staking is called (🦑,🦑). It is the profit distribution mechanism of Stargate Finance. It is designed as the dominant strategy for participants; the best thing to do will likely be to just stake and compound.&#x20;

Staking (🦑,🦑) is the best strategy for both of the players and the protocol (both users gets the max gain in SGT🦑). For a rational player participating in the Stargate Finance, Staking (🦑,🦑) will be the optimal choice for you in the long run.

There is no time lock when staking. You can withdraw the staked SGT anytime.

## **What happens when staking**

#### **1. Staking is the profit-sharing procedure in Squid God Finance.**&#x20;

Stakers put their **SGT** tokens in the staking pool to earn passive rewards. The rewards are not originated from simply printing money, as it might seem to be. They come from the profit from minting(bonding), as the SGT is sold at a premium in this process. The staking rewards are distributed at the Reward Rate, which is a parameter controlled by the DAO governance.

#### **2. Staking is a passive, long-term strategy.**&#x20;

When you stake SGT to earn rewards, the amount of the SGT tokens staked is increasing at a compounded rate. This procedure will automatically lower your unit cost, at an increasing speed. The longer time you staked, the greater scale your SGT cost will be decreased. This means even if the market price of SGT drops below your initial purchase price, for a long enough staking period, the increase of your staked SGT holdings will be more than enough to compensate for the price drop and you will still be in profit.

#### **3. GAME Token is the staked SGT with a 1:1 rate**&#x20;

$GAME = Staked $SGT.&#x20;

When you stake your SGT tokens in the staking pool, you will get the same amount of GAME tokens. In each round, the GAME balance will be increased automatically, to keep in line with the inflated amount of the staked SGT tokens.

When withdrawing, you will burn GAME and receive an equal amount of SGT tokens. Withdrawing means the stakers forfeit the future rebase reward.&#x20;

## Why does a rational player choose to stake?

1. When you are taking part in the Squid God Finance protocol, no matter from minting or buying from the market, and holding SGT tokens, you are actually capturing a fraction of the SGT current total supply and marketcap. Staking will keep your share of the supply not dropping by distributing rewards in SGT, and even increasing if not 100% staked. If the marketcap increases in the future, you will get profit in staking by maintaining your share. Non-stakers only have the SGT price exposure, rather than the marketcap. &#x20;
2. When you purchase SGT or get SGT by minting, you are trading SGT at a premium if the price is above 1 USD. The majority part of the premium will become the protocol's profit and distribute back to the stakers. Staking is the only way to 'recover' the premium and reward with the profit.&#x20;
3. The distribution of the profit in Squid God Finance protocol is not instant. You may see the runway time on the dashboard. It means the sustainable time that the distribution of profit can last at the given APY. Only by staking, can you capture the distribution. If you quit early, you are actually forfeit your share of future profit in SGT to other players.
4. When the players choose to stake, the equivalent amount of SGT will exit circulation. It has positive effects on the SGT price, by reducing the circulating supply. The SGT token holders and stakers will all be happy.
5. The staking process is also beneficial for the protocol.  A higher staking rate means the players are all confident in the protocol's future and choose to hold. It may attract new players that are willing to join in the game, pay SGT at a premium and give more profit to the protocol. The sustainability will last. &#x20;

## How to track my rewards when staking? <a href="#how-do-i-track-my-rebase-rewards" id="how-do-i-track-my-rebase-rewards"></a>

You can track the rebase rewards by calculating the increase in the staked **SGT** balance. But it is much easier to do it by checking on the Index.

1\. Record down the current Index value on the staking page when you first stake your **SGT**. Let's call this the Start Index.

2\. After staking for some **SGT**, if you want to determine by how much your balance has increased, check the Current Index value again. Let's call this the End Index.

3\. By dividing the End Index by Start Index, you would get the ratio by which your staked **SGT** balance has increased.

## **Wrap-up**

Staking is how we distribute profits equitably to participants. Through GAME, everyone receives the same percentage profit per round. Rebasing also allows us to compound yield with no need to harvest or do anything except hold.
