Staking is an important mechanism in a Proof of Stake blockchain like Cardano to support the security and operations of the blockchain network. Staking is the act of delegating or locking up crypto holdings in exchange for rewards. ADA staking rewards offer a way to earn passive income from holding Cardano.
Unlike similar platforms where staking is synonymous with yield farming, WingRiders divide these two terms for separate functionalities. Staking means you can stake ADA on Cardano. So by providing liquidity into Liquidity pools containing ADA, you are gaining additional rewards from ADA staking on Cardano blockchain. These rewards accumulate over time and are redistributed back into the Liquidity pools.
ADA locked inside a smart contract for the liquidity pools is automatically staked. The rewards from ADA delegation are automatically returned into the liquidity pools, increasing the value of the LP tokens owned by liquidity providers. This is a fully automated process - we have a staking agent controlled by the DAO. Delegation rewards for the whole pool are collected after one epoch and are added back into the given pool when the rewards become available.
If you provide liquidity you will be given a utility token, so-called Liquidity Provider Token or LP token, that functions as your receipt of the provided ADA. The ADA you provide will be staked automatically and rewards will be pushed back into the pool after a given period of time - defined as an “epoch”. After this epoch you can retrieve your liquidity from the Liquidity pool. The value of the LP tokens already be adjusted by the delegation rewards returned into the pool. The epoch is the typical time interval for ADA staking on the Cardano blockchain.
Not yet. The current version only supports staking into pools which only give ADA rewards. ISPO pools make it difficult to determine and distribute their rewards to individual users. In future, we will explore options to implement support for ISPO pools.
Not directly. The staking rewards after the epoch first will go back into the Liquidity pool which will in turn increase the overall value that you can withdraw with your LP tokens.
Staking of ADA is only relevant to ADA-to-Token pools. Other features in the DEX, like swapping, farming support both Token-to-Token Liquidity pools and ADA-to-Token pools.
In the initial release, ADA staking will only be done per Liquidity pool. Every liquidity provider that contributes to an ADA Liquidity pool will get a chance to vote on which stake pool the whole liquidity will be delegated to. Each Liquidity pool can be delegated to a separate stake pool, but one Liquidity pool can only be delegated to a single stake pool. The DEX is relying on the LP providers not to select a pool while voting, where they would oversubscribe with their delegation.