💡Key concepts

Staking Basics

Staking consists of locking your ALEX tokens temporarily to earn ALEX and APower tokens as rewards. Users can stake their tokens to earn passive income in the form of newly minted tokens and transaction fees.

The ALEX staking pool offers two main options, each one rewarding stakers with a different token: manual staking with $ALEX or liquid staking with LiALEX.

Rewards

Staking rewards are the compensation that you can receive in return for locking up your $ALEX tokens for a certain amount of staking cycles. The longer you stake your $ALEX, the greater the rewards. They are obtained from transaction fees and newly minted tokens.

The network calculates each participant's reward share based on their staked amount. Rewards are either automatically reinvested in the case of Liquid Staking or can be claimed after every cycle in the case of Manual Staking. This means that, even if you decided to stake your tokens for 8 cycles, you will be able to claim rewards after each cycle concludes.

To maximize your returns, you should claim and re-stake your rewards as soon as they are available to generate compounded returns. Unclaimed rewards do not expire, so you can claim them whenever you wish, but they do not generate returns either.

APR

The average APR (Annual Percentage Rate) reflects the yearly interest of your investment minus fees. It does not include compounding interest. The longer the staking cycle, the higher the APR, since you will be skipping less cycles due to cool-down.

Cycles & Cooldown Period

Staking is measured in cycles. Cycles are 525 Stacks blocks or about 3.5 days long, and both manual and auto-staking receive rewards when each cycle concludes. When you decide to stake your ALEX tokens, you need to select the amount of cycles you wish to stake for. In the case of Manual Staking, your $ALEX won't be accessible during that period.

After the chosen cycles expire, you can claim your rewards and withdraw your staked tokens, or re-stake them for however many cycles you choose. Bear in mind that, once your custom-selected number of cycles ends, there will be a cooldown cycle with no rewards received, after which you may re-stake and resume earning rewards. For that reason, the longer you stake, the fewer cool-down cycles you will have, resulting in greater returns overall.

Manual Staking

Manual Staking is the conventional way of staking your tokens on the ALEX network. After each cycle, you will have the option to harvest your rewards, which you may re-stake manually to generate compound interest. When you harvest your rewards, those tokens are automatically transferred to your wallet.

Liquid Staking

Liquid Staking with LiALEX allows users to earn rewards just as in manual staking, but with the added benefits of maintaining liquidity and automatic re-staking. Liquid staking is made possible through LISA, a set of tools deployed by ALEX Lab on the Stacks blockchain.

Liquid staking earns you passive compound interest on your investment, as you won't need to manually harvest and re-stake your rewards. Since your rewards are automatically reinvested, there is no cooldown period, which allows you to maximize your returns.

Staking $ALEX through LISA provides users with LiALEX, a transferable utility token that can be used for other on-chain activities. Liquid staking not only allows you to earn rewards from your investment, but also frees you from the constraints of locking up your assets.

For more information, you can consult the LISA Documentation.