In the second week of November 2022, Dogechain native staking will be available for community members that wish to do their part in securing the network.

That said, Dogechain utilizes a unique staking model that might be unfamiliar to some. This article will provide details on how this staking model works and its implications in the Dogechain ecosystem.

TL;DR

Dogechain uses IBFT PoS.
Dogechain uses a vote escrow staking model called veDC.
$DC tokens cannot be directly staked with validators. Instead, users will need $veDC tokens for staking.
Users need to lock $DC in the veDC locker to obtain $veDC tokens.
The longer you lock $DC the more $veDC ou receive
Locked $DC can be recovered once the timelock period matures.
$DC staking rewards are liquid and unlocked as soon as you claim them.
Once the timelock matures, users need to burn the $veDC to recover their $DC tokens.

How Does Dogechain Staking Work?

Dogechain uses an IBFT Proof of Stake model to secure the network and validate transactions. This model ensures that the chain is secure and resistant to 51% attacks as it becomes increasingly expensive to revert transactions as more tokens are staked.

In this model, there are two major players:

Validators, who stake a pre-determined amount of tokens (yet to be announced) to get the right to validate transactions on the network. Validators receive rewards in the form of $DC tokens for their service. However, to ensure honest participation in the network, validators can also be subject to a penalizing mechanism called slashing. This disciplinary measure will slash a certain amount of tokens from the validator’s stake in case they show malicious or dishonest behavior on the chain.
Delegators, who delegate their tokens to a validator of their choice to increase the safety of the network. The more tokens are staked with validators, the more difficult it is to attack the blockchain. For their trust, delegators will receive a portion of the token rewards from the validators.

Since all the $DC tokens have been preminted at the token generation event, block generation doesn’t create new tokens. To incentivize validators and community members to stake tokens, the Dogechain Foundation has allocated 15% of the total supply of $DC tokens for Network Operations. These tokens are distributed dynamically to the staking community in order to provide compelling yields for continuous incentivization.

Vote-Escrow veDC Timelock Model

Dogechain doesn’t implement a run-of-the-mill staking mechanism. To keep the tokenomics of the $DC token viable for the long term, the Dogechain team has instead opted for a vote escrow model with predetermined timelocks.

Consequently, validators and delegators cannot directly stake their $DC tokens. Instead, they need to go through the veDC model and lock $DC for fixed periods to receive $veDC tokens.

Once users lock up their $DC in the veDC locker, they will receive $veDC tokens, in proportion to the length of their lockup time. More precisely, lockups will provide the following ratios of $DC to $veDC:

1 month — x1.1 amount of $veDC
3 months — x1.2 amount of $veDC
6 months — x1.5 amount of $veDC
1 year — x2.0 amount of $veDC
2 years — x3.0 amount of $veDC
3 years — x4.0 amount of $veDC
4 years — x8.0 amount of $veDC

This model has been implemented to ensure long-term commitment from both validators and delegators. The exponential increase of rewards incentivizes longer timelocks, which takes tokens out of circulation and reduces selling pressure.

⚠ ️Important Notes

$veDC tokens cannot be transferred or sold. This means that the user sacrifices the liquidity of their $DC tokens to be able to receive staking rewards.
Users can burn the $veDC tokens to retrieve their locked $DC and reclaim their liquidity, only when the lockup timer has matured.
$DC token rewards are liquid. This means that the rewards can be used in the Dogechain ecosystem right away after the claim. Users can choose to lock them in veDC or plug them into the multiple DeFi protocols present on the blockchain.
Only Dogechain mainnet $DC tokens can be locked in the veDC locker. If you have Ethereum-based $DC tokens, you will need to bridge them to Dogechain before you can stake them.
Rewards can be claimed each block, which means users can claim rewards as frequently as they wish.

Network Operations Rewards

The staking rewards are distributed from the “Network Operations” wallet that holds 15% of the total supply of 200 billion $DC tokens. This allocation has a dynamic vesting schedule to be able to accommodate the dynamic yields of the protocol.

Usually, staking protocols reduce their yield ratios as more tokens are staked in the network. This has often the inverse effect of discouraging the community to work together and lock more tokens out of circulation.

To highlight Dogechain’s community-first approach, these yields will be adjusted dynamically so that remain appealing, while simultaneously controlling inflation. The team will release more information in the future about the activities that will allow them to increase community yields through sheer participation.

Staking $veDC Delegator Workflow

Let’s quickly go over the basic workflow on how to stake $DC tokens.

Step 1: Acquire $DC on an exchange.

There are two types of DC tokens:

$DC on the Dogechain mainnet, which can be immediately locked in the veDC locker.
$DC on Ethereum, which need to be bridged onto the mainnet using a bridge.

Step 2: Lock your $DC tokens in the veDC locker to obtain $veDC.

There are several options open to you at this point. For example:

You can choose the amount of $DC you want to lock up.
You lock $DC by using the fixed timeframes provided by the protocol. Higher timeframes provide more $veDC tokens in relation to your $DC holdings.
You can lock different amounts of $DC on different timeframes. This allows you to remain flexible regarding the amount of $DC you want to lock up, and the returns you wish to get from your staking activity.
If you haven’t chosen the maximum timelock, you can prolong your timelock to get more $veDC for already-locked $DC tokens.

Once you have set up your preferred lockup options, you can press the “Lock DC and Mint veDC” button to proceed.

⚠️ Note: This transaction cannot be reversed, so make sure you are confident in your choice. You cannot reduce the lockup time once you have locked your $DC, you can only increase it.

Step 3: Stake/Unstake with a validator of your choice

Once in possession of $veDC tokens, you can delegate them to the validator(s) of your choice. Simply navigate to the validator page, choose one that is to your liking and delegate the number of tokens you wish to stake.

You can unstake your $veDC tokens from the validator after 5 epochs (roughly 2 hours.)

Step 4: Claim rewards

After the creation block, your $DC rewards will be available for claim with the validator of your choice. You can choose to claim these as often as you like.

Once you have claimed them, you can either use them in the Dogechain ecosystem or lock them in the veDC locker to increase your staking yields.

Step 5: Burn $veDC to reclaim your $DC

The final step in the Dogechain staking journey is to reclaim your $DC when your timelock matures. This optional step will burn the $veDC that you hold, unlock the underlying $DC, and return them to your wallet.

However, if you don’t claim your $DC tokens, you will still be able to use your $veDC and stake them to receive rewards until you burn them.

Phase 2A — “Closed Garden” Unchained mainnet

The Polygon Edge framework upon which Dogechain was built is still being battle-tested. In fact, Dogechain is one of the first functional blockchains that uses this framework and fully utilizes its features.

One of the major advantages of Polygon Edge is the ability to switch from PoA (currently running on Dogechain) to a PoS consensus. To ensure a smooth transition, the network will temporarily run on a “closed garden” validator system in the early stages of the PoS implementation.

This means that, in the beginning, the validators of the network will solely be deployed by the Dogechain team. At first, the community will only be able to participate as delegators until the PoS protocol is running smoothly.

At the same time, the team will proceed with public validator onboarding to ensure that the transition to the “Unchained” mainnet will be as seamless as possible. Additional information about validator requirements will be released by the team in the following months.

Conclusion

Staking is an essential piece of the Dogechain puzzle. The veDC model strengthens the $DC tokenomics while staking itself secures the network and contributes to its decentralization.

We are excited to release this crucial upgrade of Dogechain that will provide $DC holders with increased utility for their tokens and allow the community to control the circulating supply through extended timelocks.

Dogechain is bringing DeFi & long awaited utility to Dogecoin. Join the family!

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Dogechain Staking 101 — All You Need To Know