Hodler Rewards System
Introduction
Why HRS?
With the DeFi boom we have seen lots of farming projects where you buy some coins and stake them into a pool to later get some kind of return of your initial investment.
Something that happened to many people is that often you will get less than what you initially invested. One of the reasons for this is the high transaction costs in Ethereum, but also the difficulty of competing with whale investors who might buy a huge amount of coins and the dump them just before you buy your ones.
Hodler Rewards System (HRS), proposes a way of rewarding users that stake and hodl the HRS token (HRST) into the Hodler Pool. The basic idea is the more HRST you have, and the longer you stake it, the more rewards and benefits you will get.
So how does it work?
In very basic terms, you will get rewards from staking your HRST coins in the Hodler Pool but also from other users when they unstake their tokens. So essentially, users that stake and hold HRST in the Hodler Pool get rewarded but users that dump their tokens will get “penalized”, aka taxed.
Hopefully this should encourage users to hold on their tokens, and hence the value of the token should not decrease. But even if this doesn’t happen, stakers will get some reward instantly when other users unstake their tokens. Yes, stakers will get paid in HRST directly to their wallets.
Just to clarify, if you just buy HRST and don’t stake/unstake, you won’t get rewards but you also won’t be penalized!
Features — Deep dive
Let’s start with some basic concepts…
Top Stakers
The top stakers are the 40 stakers that have been staking HRST for the longest time. These are the guys that get most of the rewards/benefits. So you want to be a top staker of course! I said most of the rewards because other stakers will also get rewards, more on this later.
There can be only up to 40 top stakers (this is hard coded). But obviously there can be less than 40 as well. This would be the case when there is less than 40 people staking in the pool.
Followers
These are the users that started staking HRST after there were 40 top stakers already. But don’t be sad. There is hope :)
If you are a follower and you don’t unstake, you will move up the ladder when someone that has been staking longer than you unstakes…Shame on them!
For instance, say there are 40 stakers and you start staking. You will be the first follower. So when any top staker unstakes their tokens you will become a top staker! Yay!
Same for the followers “behind” you. When you move one position, they will all move one position as well.
Normal staking rewards
This is simple, if you stake HRST you get 0.000001 HRST per HRST staked per ETH block. You can claim this rewards when unstaking only.
Rewards from redistribution of penalties collected
This is a bit more complex.
When someone unstakes their HRST from the Hodler Pool they get penalized (tax is a horrible word, let’s avoid it if possible). This is the formula to calculate how much you get back when unstaking:
unstaking penalty = (staking amount + normal rewards) * penalty percentage / 100
amount you get back = (staking amount +normal rewards) — unstaking penalty
The HRST collected from the unstaking penalty is distributed like this:
If there are 10 or more followers 10% goes to 1 random follower, and 90% is distributed among the top stakers and the dev fund.
If there are less than 10 followers 100% goes to top stakers and the dev fund.
How are these rewards distributed between the top stakers and the dev fund? Well basically the more HRST the top stakers are staking, the more they will get. For example, if Alice is a top staker, and she holds 20% of staked HRST, she will get 20% of the rewards allocated to top stakers.
Finally, when you get rewards from redistribution of penalties collected, you get them directly in your wallet (and there is not penalty on that).
Benefits of being a Top staker vs Follower
If you are a top staker you will get:
- normal rewards
- rewards from redistribution of penalties collected (see Rewards from redistribution of penalties collected)
- a reduction of the penalty for unstaking (see Staker Level)
If you are a follower, you will get:
- normal rewards
- and you might get “rewards from redistribution of penalties collected” if you are lucky (when there are 10 or more followers).
Staker Level
There are 5 staker levels: 0, 1, 2, 3 and 4
Staker Level 4 :
- you need to be a top staker, between position 1 and 10
- penalty to pay when unstaking: 4%
Staker Level 3:
- you need to be a top staker, between position 11 and 20
- penalty to pay when unstaking: 8%
Staker Level 2:
- you need to be a top staker, between position 21 and 30
- penalty to pay when unstaking: 12%
Staker Level 1:
- you need to be a top staker, between position 31 and 40
- penalty to pay when unstaking: 16%
Staker Level 0:
- you are a follower
- penalty to pay when unstaking: 20%
Hodler Pool expiry date
The Hodler Pool is hard coded to expire 26 weeks from the time it was created. That means it will expire around August 8, 2021. The website will tell you the the expire time for your timezone.
Please unstake your HRST before the expiry date. You will still be able to unstaker after the expiry date, but you won’t get any normal rewards.
Tokenomics
1700 HRST were initially minted, and the Hodler Pool is the only entity allowed to mint HRST. The initial 1700 HRST were allocated in this way:
- 1000 HRST are for the liquidity pool. This is for the USDC/HRST pool so that people can buy HRST with USDC.
- 600 HRST reserved as rewards for liquidity providers in the USDC/HRST pool so people can get some extra rewards for being liquidity providers.
- 100 HRST reserved for development (these are staked in the Hodler Pool).
There is no cap for the maximum supply of HRST at the moment. But HRST is only minted if people stake HRST in the Hodler Pool.
The rate of minting HRST is hard coded in the current Holder Pool to:
0.000001 HRST per HRST staked per ETH block.
Dev fund
There is a dev fund account to support the development and improvement of the project.
There is no fixed allocation of HRST for the dev fund. The dev fund will only get the remaining of the rewards from redistribution of penalties collected. For example, if 100 HRST are rewarded from redistribution of penalties collected, and all the top stakers hold 60% of the staked HRST, they will get 60%, and the remaining 40% will be allocated for the dev fund.
Next Steps
- UI improvements: we know the the current UI is not shiny and attractive. But all our efforts were in the backend, trying to build a smart contract that is as good as possible.
- More and better documentation
- Start working on the next version of the Hodler Pool: the current pool has an expiration date of 6 months since it was launched. So we’ll have some time to build an improved version of the current pool.
- Maybe other uses for the HRST token?
Links
App: https://hrs.finance/
Discord: https://discord.gg/ErsFS6hMMU
GitHub: https://github.com/drhodler/hrs.finance-backend
USDC / HRST pool: https://valueliquid.io/#/faas/0x1a299bc7977a10a8999ee1691d3cc693cf8a9735
Hodler Pool contract: https://etherscan.io/address/0x385bcf9e9a2ce3878a4dc9f95b4f93064935ace4
HRST contract: https://etherscan.io/address/0x385bcf9e9a2ce3878a4dc9f95b4f93064935ace4
Conclusion
Hopefully you find the idea interesting and join us in this adventure.
Finally, on a more boring note. We need to say and make sure you understand the following:
1- This project is experimental. Use it at your own risk
2- Using this platform may involve financial risk of loss.
3- Never invest more than what you can afford to lose.
4- Always do your own research!
5- By using this platform, you agree that HRS Finance is not liable for any financial losses you might incur as a direct or indirect result of using this platform.
