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BUDS Staking
The final piece for the Hashkings system is here!

Intro:

It's no secret that users are able to use different aspects within HK ecosystem by spending a variety of tokens and not just BUDS. BUDS being the central token within the HK ecosystem, some users wonder if this is a good idea as it doesn't create a natural use case for BUDS.
However, at HK we believe that having a free market is the best way for organic growth of our ecosystem and its token. Hence, we do not force people to use only BUDS.
For example: Crafting joints, forging avatars, and buying avatar packs can be done using $PIZZA, $ONEUP, $HIVE, $BUDS etc. This is free choice for our players, and there are some notable benefits of having a system like this;
  • The communities associated with these tokens will have easier access and exposure to our ecosystem.
  • Easy to build partnerships with any other tokenized communities.
  • Adds use cases for other tokens within HIVE ecosystem, which in turn adds more value to HIVE.
  • We let more capital enter the game.
However, a free market is not just the upsides and has created a few downsides as well;
  • BUDS don't have any other strong use case beyond burning BUDS for MOTA.
  • Since there is no restriction on using alternate tokens to access the ecosystem, users didn't feel the need to buy and hold BUDS.
  • No effective system to distribute all the extra capital coming into the game through various tokens.
  • All of these resulted in the value of BUDS decreasing over time.
It has been our vision at HK to always add more value and use cases for BUDS, which is our central and most liquid token. We also don't want to create another governance token further diluting the power of BUDS.

Introducing staking:

Staying true to our vision, In order to counter some of the downsides mentioned above, and to reward players and BUDS holders, we have come up with a tokenized staking system for BUDS.
So how does the staking actually work? This has a few different components, rewards and inflation, BUDSX tokens, calculation and distribution. Let's break these down one at time.

Where do the rewards come from? Does this create BUDS inflation?

Remember we mentioned above how users are able to access HK using a variety of tokens? Well, we are going to convert all these tokens to HIVE and send it to the staking account. This account will then use 1% of its total hive, calculated on a daily basis, to buy back BUDS from the market and add it to the pool. These BUDS will be the primary rewards for our stakeholders. This process of adding BUDS is automatically done once everyday at around 00:00 UTC.
Since this process does not mint any new BUDS, there is no inflation being created.

What is BUDSX token? How is it minted and distributed?

BUDSX is the token you'll receive when you stake your BUDS. It is a representation of your stake in the pool. Think of it as a receipt representing your stake. The amount of BUDSX you'll receive on any given day will depend on the current BUDS to BUDSX ratio. This ratio does not change when users stake or un-stake throughout the day, it only changes when the staking account buys BUDS from the market and adds it to the pool.
Formula to calculate the current ratio: TOTAL BUDS IN THE STAKING POOL / TOTAL BUDSX CIRCULATING SUPPLY
These tokens are newly minted when a user stakes any amount of BUDS. They are burned when they are un-staked. It is also freely tradeable in the market, which opens up new opportunities for stakeholders. This token is also how the rewards for stakeholders are calculated.

How are the rewards for stakeholders calculated and distributed?

At the end of each day when the staking account buys buds from the market and adds it to the staking pool, the ratio of BUDS against BUDSX increases. This process doesn't distribute more BUDS or BUDSX to users directly, it instead increases the amount of BUDS your BUDSX represent. So when a user un-stakes, they receive the BUDS as per the current ratio of the day. And since the rewards are added to the pool everyday, your share of the BUDS against your BUDSX will increase everyday.
Formula to calculate your gains: YOUR ORIGINAL STAKE - TOTAL AMOUNT OF YOUR BUDSX * CURRRENT RATIO

Example:

  1. 1.
    Liuke wants to earn more BUDS, so he stakes 1000 BUDS when the current ratio of the day for BUDS:BUDSX is 1:1. So he receives 1000 BUDSX.
  2. 2.
    Chocolatoso also wants earn more BUDS, so he stakes 1000 BUDS on the same day. Since the ratio of BUDS:BUDSX isn't affected by users staking or un-staking, it is still 1:1, and he also receives 1000 BUDSX.
  3. 3.
    At the end of the day the staking account buys 5000 BUDS from the market and adds it to the staking pool.
  4. 4.
    So we now have a total of 7000 BUDS in the staking pool. 1000 from Liuke + 1000 from Chocolatoso + 5000 added by staking account towards rewards.
  5. 5.
    The amount of BUDSX in in circulation is still 2000. 1000 belongs to Liuke + 1000 belongs to Chocolatoso
  6. 6.
    This means that the ratio of BUDS against BUDSX has increased and the new ratio will be: TOTAL BUDS IN THE STAKING POOL / TOTAL BUDSX CIRCULATING SUPPLY which is 7000/2000=3.5. So now the current ratio of BUDS:BUDSX will be 3.5:1
  7. 7.
    This also means that if Liuke were to un-stake, he will be receiving: TOTAL AMOUNT OF HIS BUDSX * CURRRENT RATIO which is 1000*3.5=3500 BUDS. To calculate Liukes' profit: TOTAL BUDS RECEIVED - ORIGINAL STAKE which is 3500-1000=2500 BUDS.
  8. 8.
    Let us assume Liuke has not un-staked, and let's continue with the example.
  9. 9.
    So now Rama also joins the pool and he also wants 1000 BUDSX. But now since the new ratio of BUDS:BUDSX(as per step 6.) is 3.5:1, he needs to deposit 3500 BUDS to get 1000 BUSX.
  10. 10.
    Now there are total 10500 BUDS in the pool and 3000 BUDSX in circulation
  11. 11.
    So now let's say Chocolatoso is an impatient guy and un-stakes his BUDS. So he basically sends back his 1000 BUDSX which will be burned and he will receive 3500 BUDS.
  12. 12.
    Now the new total in the pool is 7000 BUDS and 2000 BUDSX in circulation. So even if both Liuke and Rama un-stake their BUDS, they will each get 3500 BUDS.
  13. 13.
    In this example Liuke and Chocolatoso both have made a profit but Rama has not. Rama has received back his original stake amount, since he un-staked the same day and did not wait for staking account to buy BUDS from the market to add rewards to the pool.
  14. 14.
    The way this system is designed, the ratio of BUDS for BUDSX never decreases, it only increases as the rewards account keeps adding more BUDS to the pool everyday. The longer you stay in the pool your share of BUDS in the pool keeps increasing.

Is that all? Are there more rewards?

There's always more rewards!! We are working on a new EXP token, it is a new asset in our ecosystem that can be freely traded or redeemed for joints in our store in a 1:1 ratio. Basically if a pinner gives you 15 XP, you can use 15 EXP tokens to get a pinner. it will be like that with all the other higher level joints as long as you have the required avatar level to acquire them.
These EXP tokens will be distributed to all the BUDSX holders. This would basically work like a MOTA pool, ie distributing a certain amount of tokens between all the holders on a daily basis.
We're also constantly working towards adding more rewards for the BUDSX holders as the staking system will be the strongest reason to hold BUDS in HK.

Where to stake?

https://farm.hashkings.app/staking
farm.hashkings.app
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Outline
Intro:
Introducing staking: