How Staking Works: A Quickstarter Guide

A brief overview of how staking and reward eligibility work on Rare Protocol

Rare Protocol is designed to enable onchain discovery, made possible by staking.

Curation staking helps you support and connect with creators and their communities, build your reputation as a curator, and earn rewards along the way.

To start, all you need is $RARE. Use $RARE to stake on artists, collectors, and curators and earn rewards whenever they make a sale.

Rewards

You can earn rewards by staking in a community pool. A community pool can be opened for the ETH address of any artist, collector, or curator. ETH addresses with a corresponding community pool are referred to as pool owners. If the pool owner makes a sale*, a portion of the marketplace fee is awarded to the stakers in their pool.

*The sale must occur on a marketplace or contract that is compatible with Rare Protocol in order for a portion of the sale fee to be forwarded to the pool. Additionally, please note that creator royalties are not automatically included in rewards.

Staking

When you stake, you temporarily lock $RARE in the pool’s address, and receive a pool-specific token (xRARE) in return, representing your percentage of the pool.

Rewards are paid out according to your percentage of the pool. The more you stake in a pool, the more xRARE you hold to represent your increased percentage of the pool; the higher the percentage, the bigger the rewards.

xRARE is distributed along a bonding curve, which gently favors xRARE payout to earlier stakers in a pool. This creates an incentive for staking in up-and-coming pools, creating new signals of discovery and curation data as you go.

You can unstake your RARE tokens at any time, but note: unstaking all RARE from a pool will forfeit any unclaimed rewards you’ve earned. To remain eligible, keep at least 1 $RARE staked. Unstaking a partial amount will lower your percentage of the pool, which in turn lowers your reward payout for future rounds.

Rounds

Staking activity is played in a series of rounds. Rounds last for 7 days, and are dormant until new activity in the pool triggers a 7 day countdown. When the countdown ends, rewards that accrued in that time can be claimed by eligible stakers. You

To be eligible for a round, you must be staked in the round prior to that given round. When a round is activated, a snapshot is taken of all participants in the pool before that new round began – this snapshot will provide a headcount of who is eligible for rewards at the end of the new round.

In other words: those who stake during Round 1, won’t be eligible for rewards until the end of Round 2. And those who newly staked in Round 2, won’t be eligible for rewards until the end of Round 3, etc.

This slight delay in reward eligibility is designed against those who may want to capitalize on short-term market activity. This gives staking an extra layer of signified conviction: it implies a belief in the Pool Owner’s broader success story, not just in their short term gains. (Plus, it helps to balance gas cost when reward payout is batched in this way 😜)

Reward Swaps

Rewards can accrue in multiple forms of currencies: $RARE, ETH, and erc-20 tokens such as WETH. However, rewards can only be claimed in the form of $RARE.

Non-$RARE rewards, known as unswapped rewards, must be swapped for $RARE in order for them to be claimable at the end of a round. To convert a pool’s unswapped rewards to claimable rewards, use the Reward Swap on the pool’s page.

The Reward Swap displays the balance of unswapped ETH that’s sitting in the pool’s Accumulator (a specialized contract that manages and converts multiple currencies). Here, you can trade in $RARE for ETH in order to make rewards claimable for all eligible stakers*.

As an incentive for performing this transaction, reward swappers receive a 10% bonus on the ETH they receive from the swap!

*Swapped rewards become claimable for the round in which they are swapped. They do not retroactively apply to the rounds that took place when they accrued in the Accumulator. Swapped rewards are only applied to the round taking place at the time that they were swapped.