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How to Stake STEP
Staking STEP token is a way for tokenholders to earn yield on their STEP from revenue generated by the Step Finance protocol. When a user stakes their STEP they receive the xSTEP token which represents their stake in the staking vault. The mechanics of xSTEP are the same as xSUSHI on Ethereum and this is the first implementation of such a concept in Solana. The xSTEP token is movable like any other SPL token and is thus compatible for usage in other protocols.
You do not need to 'claim' your rewards from xSTEP, your rewards will be distributed when you unstake and receive more STEP than you originally staked.
xSTEP represents a claim on STEP staked in the staking vault. Over time, the Step Finance protocol generates fees from people using Step products and these fees are sent to the vault.
- STEP fee revenue that is sent to the vault is owned proportionally by stakers.
- xSTEP is a SPL token and is movable, tradable and compatible with any other protocol.
- xSTEP has a 'price' which represents the total STEP over and above the staked amount. This will grow as more fee revenue is deposited into the vault.
- When a user unstakes their xSTEP they are paid (in STEP) according to the current xSTEP:STEP price and the xSTEP is burned.
- xSTEP will always be > the value of 1 STEP.
- The APY associated with xSTEP is a representation of the price of xSTEP over a 365 day period.
- For example in the first funding period 5000 STEP was sent to the vault and 10155788 STEP was already staked, the APY is calculated as: (5,000/10,155,788) * 365 * 100 = 17.97% APY.
First navigate to the 'Step Staking' section in the left side menu once you have connected your wallet.
Step Stake Menu
Then input the amount of Step you want to Stake and hit the 'Stake' button. The amount of xSTEP you receive will be based on the current xSTEP price as described above.
Navigate to the 'Unstake' tab on the same same page and input the amount of xSTEP you want to unstake. You will receive an amount of STEP according to the price of xSTEP described above.
xSTEP can be used as a value accruing asset in other protocols, ideally suited as collateral in lending protocols. The Step team is working with various lenders and oracle providers on integrations for xSTEP in third party protocols alongside existing STEP listings. We believe xSTEP is an excellent fundamental building block for many interesting DeFi protocols and given the token yield requires no wrapping or other complex contracts it is a simple and elegant solution for intrinsically productive digital assets.