Nov 27
Cinnamoon Releases Staking Contract
As part of the Q4–2022 product deliveries, Cinnamoon is introducing its Staking contract that allows $CIMO holders to earn passive income. From the ideation of an inflation-resistant Staking solution to the pfp design show, the team has decided to add NFT boosters to the contract as upgrade to initial plans. These boosters are an enabler for tokenholders to increase Staking rewards. Users can connect with any eligible web3 wallet to the dApp. The Cinnamoon team recommends using the following wallets: MetaMask, Coinbase Wallet, and Trust Wallet.
This FAQ goes through questions that are relevant for users of the Staking contract. Access the dApp here: [Coming]
What are the Staking characteristics?
Staking is a popular type to earn passive income in DeFi. While most contracts distribute rewards in the governance token of the protocol, Cinnamoon’s Staking solution aims to avoid inflation of the $CIMO token by rewarding in $ETH. The $ETH pool of the Staking contract is funded by income that is generated from trading taxes. These will be replaced with other income streams once our fee structure goes to 0%, and DevTool generates $ETH to fund the pool.
Rewards can be claimed at any point in time. There is no sell pressure on $CIMO as the contract distributes solely in $ETH. Users of the Staking contract can (but may not) lock their $CIMO holdings and boost rewards with Cinnamoon NFTs. $ETH rewards of investors are a function of the following parameters:
- Locktime (see below)
- NFT boost (see below)
- Trading volumes and corresponding $ETH Staking pool (APY increases with pool)
- Amount of staked $CIMO tokens (APY increases with staked $CIMO holding)
- Number of Staking users (APY increases if there is more free float of $CIMO/ unstaked users)
What is the meaning of locking $CIMO?
One of the parameters defining the APY is the timelock which Staking users set when locking their $CIMO tokens. The contract allows daily lock intervalls with a maximum locking period of up to 90 days. As such, the maximum APY is achieved by locking 90 days. Before making the lock time decision, $CIMO holders should understand the meaning of locking: Tokens are locked in the Staking contract and cannot be transferred across wallets or swapped for any other token. The holdings are visible on the dApp and in the Staking contract. These will be unlocked once the locktime goes to zero.
What is the NFT multiple?
Cinnamoon offers a boost to the rewards by holding and connecting utility NFTs to the Staking contract. Cinnamoon NFTs are part of the DevTool ecosystem. Our popular pfps that have been presented during the NFT design show in recent months will act as reward booster (more details here: https://cinnamoon.cc/nft). While these NFTs will unlock additional features on DevTool, they act as an additional multiple on top of the lock period when linked to the Staking contract. NFT boosting will be available after the mint date of our NFT pfps.
What is LP Staking?
Cinnamoon enables yield farming in its Staking contract, which allows even higher rewards for users. While the rewards increase significantly by locking as LP (x% $ETH + (1-x)% $CIMO), users should understand the risk of impermanent loss. Similar to traditional staking, LP staking has a lock time — but it is not a requirement.
Are there additional details?
We are listing a few more details here and will add more to the list whenever we deem them as relevant after the release of the Staking contract:
- There are no taxes when users stake their tokens.
- Any transaction on the Staking contract requires gas fees in $ETH.
- Compounding additional $CIMO to an already staked pool increases $ETH rewards.
- There are no limits to rewards. The parameters above define the APY and $ETH rewards. The APY moves with the parameters and is a point-in-time assessment, i.e. it is not a guaranteed APY over the entire Staking period.
- Once $CIMO tokens are unlocked, users continue to earn rewards despite that lock time is at zero. This continues until users are withdrawing the staked tokens, which then calls the Staking contract to stop distributing rewards.
- Users can increase their Staking amount by adding additional $CIMO tokens without extending the pre-set lock period. The lock period cannot be lowered when adding additional $CIMO to the staking pool, but it can be extended.
- Compounding $CIMO on top of an existing staking pool translates into higher $ETH rewards. Compounding means that the contract buys $CIMO for the callers and stakes it immediately on top of the existing pool. This is gas-efficient.
