Staking on Horizon Genesis
To incentivize liquidity, Horizon Genesis provides a staking mechanism that earns weekly rewards. Dividends via the token’s inflationary policy and fees levied from the Horizon Exchange are paid out to all users who have staked HZN, Horizon Protocol’s native token.
When a user stakes HZN to mint on Horizon Genesis, the stake is pooled with all other staked HZN and that pool collateralizes all zAssets on the entire Horizon Protocol network. As an investor, you can mint zUSD, which means you are incurring an interest-free debt to the network. The debt must be adequately collateralized and your C-Ratio always maintained in order to be eligible for rewards. For savvy investors, this debt can be leveraged to earn yield through staking as an LP or trading on the Horizon Exchange.
Anyone that holds HZN tokens can stake on the network, with no minimum requirements. However, you must also have BNB tokens to pay for network gas.
There are multiple ways to stake on Horizon Genesis and earn rewards. There are two ways to stake: Mint and Earn. Mint is when a user creates zUSD using HZN as collateral and gets rewards according to the amount of debt they hold. This will be the main way to stake and will also receive the majority of the rewards issued in Horizon Protocol. Earn provides different opportunities to earn through liquidity provision and the staking of LP tokens.
Staking rewards are distributed per system rules (these can change as the system evolves) and are provided by the token’s inflationary policy, exchange fees (relevant when the Horizon Exchange becomes available), and any other system incentives (if applicable).
There are two components to rewards: HZN and zUSD.
- HZN rewards are determined by the Horizon Protocol inflation policy. This started with the launch of Horizon Genesis and supplies all the rewards for Horizon Genesis as well as the LP staking pool rewards in Earn. As of April 2022, 86.88% of the rewards are going to HZN stakers who mint zUSD in Horizon Genesis. As a HZN staker, your percentage of the global debt will determine your percentage of rewards each week. If you hold 1% of the global debt, you will receive 1% of all the rewards.
- Rewards and your percentage of the global debt are calculated at a snapshot of the network taken every Friday at around 15:00 UTC.
- zUSD transaction fee rewards are also accrued by HZN stakers when the Horizon Exchange goes live. Each transaction on the Horizon Exchange will incur a fee (0.15-0.3%) and the sum of all the fees are distributed to HZN stakers each week proportionally to each individual stakers percentage of the global debt (same as HZN rewards).