WISE is a PoS (Proof of Stake) cryptocurrency that works on the concept of staking. In short, it rewards investors with interest for staking (locking up) their funds in the WISE contract for a certain period of time.
WISE staking is flexible, low-risk and gives better returns than most traditional investment options.
How to Earn Shares and Interest with WISE Staking
You can start earning interest from WISE by opening a stake by sending ETH to the contract. Learn here how!
WISE Stake & Shares
When a stake is created, the WISE principal amount is burned and an actual amount of shares are released. These shares represent details of the stake size, length and when it was opened.
Depending on a stake length, value and the global share price, the amount of shares to be assigned to the stake is determined. The stake also gets bonus shares based on its length. The share price in WISE staking only increases with time, so the early you stake the more you can earn.
WISE Staking Interest
As the WISE supply inflates, i.e. the value of the token increases at about 3.5% annual rate, stakes automatically start generating interest in the following manner:
6/7th of the inflation (i.e. 3.0% APR) is distributed to all active stakes, in proportion to their shares in the total share pool, on a daily basis.
The remaining 1/7th (i.e. 3.0% APR) is distributed to the CM referrer shares.
In addition, stakes also generate income from the penalty paid by other stakes.
Also, a bonus amount of shares is generated based on the stake length and added to the particular stakes. Depending on the length of stake, the bonus may range from above 0% for a one day stake, to 25% for a 5+ year stake.
The price of a WISE share is predetermined based on certain factors. It may change whenever a stake is closed. For instance, if the ratio of a closing stake's total return (principal + interest - penalty) to its shares is greater than the current share price, then the share price will be updated to the new value.
Also, the share price will increase by 15% on the start of the third day of the Circulation Epoch (a one-time event), incentivizing investors to open stakes on the first two days of the Circulation Epoch.
How to Withdraw Interest from WISE
The WISE contract allows users to withdraw any amount of earned interest from their active stakes at any time during or upon the maturity of the stake. In simple words, you can withdraw the interest amount from your stake at any time and even multiple times, up to the maximum of the remaining interest.
Withdrawing/scraping interest means you are liquidating some of your shares in the WISE stake. It will not affect the principal shares but will reduce the number of interest shares. This also means that going forward the stake will earn less interest.
You can also choose to close a stake before maturity if you ever need funds, however, in that case you will have to pay a penalty. Once a stake closes or matures, the unscraped (remaining) interested is minted back to the user.
For more details, about WISE Staking, Interest and Withdrawals, check out the whitepaper https://wisetoken.net/teal/
Originally published at https://weku.io on September 1, 2020.