Staking ADX & DeFi: Everything You Need to Know
Posted by AdEx Network on September 2nd, 2020StakingADX
Decentralized finance is the new black, and the native token of AdEx Network, ADX, is a part of that ecosystem. Below is everything you need to know.
What is ADX
ADX is the native token of AdEx Network, a decentralized advertising network with focus on privacy and ethical ads. The token is used to incentivize validator uptime and ensure the smooth running of all advertising campaigns.
Validators are appointed for each advertising campaign on our platform, and are responsible for processing the micropayments between publishers and advertisers (a campaign cannot run without validators) through layer 2 payment channels. The more tokens are staked, the stronger the reliability guarantees of the validator network.
What is AdEx staking
Staking is a way of participating in the AdEx Network ecosystem, while simultaneously earning generous rewards.
Explained in simple terms, staking is the process of locking a certain amount of ADX tokens on the AdEx staking portal in order to increase the trustworthiness of the validators in the platform. Staking allows for AdEx users to have governance over validators, enabling better transparency, reliability and decentralization of the entire process.
It is also a great way of making your cryptocurrency “work” for you and bring you passive income. Right now, our stakers earn both DAI and ADX rewards.
If you want to learn more about the role of staking and validators on the platform, check out this article.
👉 👉 👉 STAKE ADX NOW 👈 👈 👈
The ADX upgrade
We recently performed a major upgrade of the ADX token in order to integrate it with the DeFi and yield farming ecosystem. In this upgrade we added new features like new staking rewards and flash loan functionality, making ADX the first ERC-20 token to implement built-in flash loans. The upgrade also helps us reduce gas costs.
The upgrade prompted us to update our rewards distribution model and introduce rewards not only in DAI but also in ADX. You can learn more about it in this article: New token economics and incentivized staking.
Where do staking rewards come from
DAI rewards come from validator fees, which are taken from processed ad impression payments. Each campaign on AdEx Network is subject to 7% validator fees.
Additionally, we are minting 7 million new ADX tokens. These will be distributed to active (bonded) stakers by the end of 2020 and this is where ADX rewards come from. This is similar to how Compound incentivizes liquidity providers by minting COMP, except in our case we incentivize security providers by minting ADX. We call this security mining.
How much do you earn by staking
Rewards are calculated based on the formulas below. Our early bird stakers (people who create their staking bonds before August 12, 2020, are enjoying returns as high as 200-400% APY (annual percentage yield), while the current APY for new stakers is 120%, which is comparable to most well-established yield farming projects.
For more information on how to calculate rewards, check out this article.
👉 👉 👉 START STAKING NOW👈 👈 👈
What are the risks?
Each pool has a different purpose, reward policy and slashing rules.
Currently the only available pool “Validator Tom” does not have slashing, as it’s the initial “seed” pool.
In addition to this, staking bonds are locked for a certain period of time so in a case of an unexpected market movement, you may not be able to pull your tokens and react quickly.
You should also be aware that staking happens via a smart contract, and every smart contract comes with a certain level of risk as well. In order to minimize this risk, we conduct extensive reviews and audits of the smart contracts we use. Furthermore, the AdEx Staking contract is very simple (less than 100 LoC) and has been battle tested on mainnet since late 2019.
Here are the reports of our latest audits: AdEx Audits