# Staking Contract

Staking logic is relatively simple. Staking is the primary source of income for users participating in NovaBank. It's designed to be participant-led, rewarding NovaBank consensus builders and NVB token holders. For participants, the best method is to hold NVB long-term; the protocol automatically distributes rewards and compounds interest.

### <mark style="color:yellow;">Staking and Unstaking</mark>

By selecting "Stake" on the official website, participants send their held NVB into the staking contract and receive sNVB at a 1:1 ratio. sNVB is a proof of staking participation and has no other use besides holding. When users choose to unstake, they send sNVB back to the staking contract and receive NVB at a 1:1 ratio.

### <mark style="color:yellow;">Rebase</mark>

The protocol directly allocates tokens to the staking contract without needing to redeem sNVB. This increases the ratio of NVB to sNVB, leading to a rebase difference.

Example: When there are 100,000 NVB staked and 100,000 sNVB outstanding, and the protocol distributes 1,000 NVB as staking rewards in one day, it sends these NVB into the staking contract. The staking contract then holds 101,000 NVB with 100,000 sNVB outstanding. The supply of sNVB will increase by 1,000 (1%) to match the NVB amount. Therefore, the daily rebase yield of sNVB is 1%.

NovaBank performs a rebase every 8 hours on-chain, distributing staking rewards every 8 hours. The protocol distributes rewards fairly to all stakers through sNVB, with everyone receiving the same percentage profit. The protocol automatically compounds interest; stakers don't need to claim rewards— just maintain their staking.


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