Staking crypto is similar to depositing money in a bank in order to earn rewards for your deposits. In the case of staking, users delegate a certain number of Ice coins to the blockchain’s governance model, removing the tokens from circulation for a set period of time.
The blockchain network protocol locks the investor’s coins, similar to how money is deposited in a bank. This provides benefits to both the investor and the network, as well as decreasing the circulating supply. Investors can choose to pre-stake their Ice based on the rewards they will receive, which represents their trust in the project and earns them rewards in return.
During Phase 1 of the Ice project, users have the opportunity to pre-stake their Ice and increase their mining rate by up to 250%. They can opt-in for a staking period of up to 5 years, with the longer staking period resulting in higher rewards. Users can pre-stake a percentage of their balance and can only increase this percentage without the ability to decrease it.
Ice staking period begins when Phase 1 ends, access to the Mainnet is opened, and users complete the KYC process to verify that they are not using fake accounts or bots. During this period, pre-stake users will receive staking rewards, which will be accessible as they become available.
Alice has 10,000 Ice in her balance, which she earned through mining with her team of friends. Although there are still ten months left until the transition to the Mainnet, Alice is considering increasing her mining rate through the pre-stake process. She trusts the Ice project and decides to do a 5-year pre-stake, committing to 75% of her balance. This results in an additional bonus of 150% to her mining rate.
Alice has a significant advantage because for the next ten months of mining Ice (until the transition to the Mainnet), she will earn, in addition to the base mining rate and daily bonuses, another 150% mining bonus. Let’s say the base mining rate is 16 Ice/hour and the daily mining bonus is 100% (because Alice is very active in the network), so in addition to the base mining rate of 16 Ice/hour, she also receives an additional 16 Ice/hour from the daily bonus.
Alice has pre-staked 75% of her balance for five years in preparation for the Mainnet release. She will also benefit from a pre-stake bonus of 187.5% of the mining rate. This means that Alice will mine a total of 92 Ice/hour: 16 Ice/hour (base mining rate) + 16 Ice/hour (bonus from daily activity) + 60 Ice/hour (pre-stake bonus of 187.5% on the base mining rate and daily bonus).
But that’s not all!
In Mainnet, during the 5-year staking period, Alice will also benefit from the network staking rewards. For example, if the average APY for the 5-year period is 15%, she will get an extra 75% reward, which is accessible as soon as it becomes available, which is a daily event.