Hedron the Sleeping Giant | Part 3 – ICOSA Staking and WAATSA Pool
Updated: Nov 4, 2022
So far in this series, we have covered Hedron’s basic mechanics, how the Hedron staking pool works, How HSI’s create ICSA and how the ICSA supply both inflates and functions over time. If you have not Read the previous Blogs, go to there first so you fully understand how this all ties together. There are two remaining features we have not yet talked about, however.
As a brief overview, we will cover the ICSA staking pool which pays yield in the form of both ICSA and HDRN tokens, how the payouts work, as well as the minimum timeframes involved for staking and penalties for ending a stake early.
Secondarily, we will cover a brand-new concept: A We Are All the Source Address staking pool. This is a one-time access pool where users purchase an NFT as a representation of their stake in the pool. To see their reward, users must burn their NFT to obtain their portion of the yield ICSA to date. This means once they cash out, they are out forever. Kind of like a last man standing pool, but let’s continue this discussion later. Time to talk ICSA staking.
1) ICOSA staking pool
Very much like the Hedron staking pool, the Icosa pool has minimum time lengths of stake based on the total percentage of the supply a stake has. Let’s review these stake lengths quickly:
In order understand the minimum stake lengths in these pools, we must establish the Classes of ICSA Token Holders. A Whale is defined as holding 1% of the supply, a Shark Holds 0.1% of the supply, A Dolphin holds 0.01% of the supply and a Squid holds 0.001% of the supply. Anything less than these tiers will have a minimum stake length of 30 days.
A Whale sized stake must stake for a Minimum of 360 days. The benefit to the whale comes in the form of a 20% bonus in yield for the entirety of the stake. A Shark sized stake must stake for a minimum of 240 days. The benefit to the Shark sized stake is a 15% bonus in yield for the entirety of the stake. A Dolphin sized stake must stake for a minimum of 180 Days and gets a bonus of 10% yield over that period. Finally, as far as the minimums and bonuses go, a Squid must stake for 90 days and receives a 5% bonus for serving the minimum. All stakes smaller than a Squid size have a 30-day minimum and no bonus. These bonuses are received at the end of the stake; however, stakes themselves can be diluted or increased in the percentage of supply a stake has at a given time.
A user can also be diluted due to a brilliant mechanic in the staking pool: The ability to add to a stake at any point. The only catch to this is that the minimum stake length is reset any time the stake is added to. This means that users can both increase their own positions in the pool at any time and get knocked down by other users at any time.
2) ICOSA Yield
Because ICSA is only inflationary, this means users will likely continuously have to add to their stakes or be diluted; Especially in the early days since the inflation is likely to be its highest it will ever be.
So how does ICSA get calculated for the pools yield? First, let’s look at the formula below:
HDRN burned in previous day/T-share rate
=ICSA to pool
This means that all the Hedron burned in the previous day is divided by the T-share rate. Again, the T-share has that decimal included due to the solidity programming, meaning a rate of 22903.2 would use 229032 as its number to divide the Hedron burned.
As an example, if 50 billion Hedron were burned in the previous day and we used the share rate above, there would be a total of 218,310 ICSA distributed throughout the pool as yield to stakers.
What is included in the amount of Hedron burnt in the previous day, is 50% of the Emergency End Stake penalties. This means that 50% of all EES penalties in Hedron apply to the ICSA yield in both the ICSA pool and the Hedron pool. All ICSA penalties from EES are distributed evenly across the Hedron, Icosa, and WAATSA NFT pools.
Now that we’ve established how the ICSA is calculated, let’s go over the Hedron distributed to the pool.
3) Hedron Yield
To understand where the Hedron yield for this pool comes from, let’s quickly jog our memories to the HSI buybacks we spoke of in the previous video. When a user sells their HSI to the smart contract in exchange for ICSA tokens, all possible Hedron is borrowed against the HSI by the smart contract, which then puts the HSI up for auction in 90 days. This borrowed Hedron is sent to the ICSA pool and becomes part of the yield received by users.
What this implies, is the rate at which users sell HSI’s to the smart contract has a direct correlation to how much Hedron will be sent to the pools as yield. If ICSA is cheaper on the market and therefore you get more ICSA per dollar spent there, it is likely we will see less Hedron enter the pool during that period. On the contrary if HSI buybacks yield more ICSA than you could get on the market for the same value of the HSI, then it is likely we will see more Hedron sent to the pool as yield.
Secondarily, Hedron yield also comes from EES penalties. 50% of all Hedron taken in penalties is burnt from the supply, however the other 50% is sent to the ICSA staking pool as HDRN yield.
Now that we have covered the basic mechanics of the ICSA staking pool and where it gets its yield from, let’s move on to the final piece of this platform: The We Are All the Source Address Pool.
4) We Are All the Source Address Pool
The We are all the Source Address pool is a unique, one-time access pool that allows users to mint an NFT which is worth a certain percentage of the pool. The period where users can buy in will last around 14 days, and once it ends it will be closed forever. This pool gets the same amount of ICSA per day as the ICSA pool, but users can only withdraw their ICSA yield by burning their NFT. Let’s dive in a little deeper now.
To gain access to this pool, users must send one of the following currencies to the smart contract in exchange for “points” which will be applied to the NFT: USDC, ETH, HEX, HDRN, MAXI, or PLSD can be sent to earn these points. The points are then used to measure percentage of the pool each NFT is worth, with every dollar being worth 1 point.
The Pool gets the same yield amount as the ICSA pool, however there are no minimum or maximum time constraints. Instead, users can only access their yield by completely cashing out of the system forever and burning their NFT. When a user cashes out, everyone remaining in the pool has their percentage of the pool increased, meaning a larger Yield for those left in the pool. This process repeats every time someone burns their NFT to receive their ICSA yield until there are no more users left in the pool.
This process has no time limits and could last for years before the last user has burnt their NFT.
Let’s paint this picture and create a clear understanding of everything before we move on. Imagine that there are 10 people in this pool and each person had 100 points per NFT. This means there are a total of 1000 points combined, and each user gets 10% of the pools yield. When the first user burns their NFT and obtains their yield, there are now only 900 points remaining in the pool. Each user now holds 11.1% of the pool and their yield per day increases. This recalculation continues every single time someone cashes out until there are no users left in the pool. The last man standing gets 100% of the yield for as long as they stay in the pool.
While users hold this NFT and allowing their yield to accumulate, they do have the option if they so choose to sell this NFT on the open market. Because this NFT is worth the percentage it holds of the pool and will only be getting more valuable over time, a user could in fact leverage the future value to cash out of the pool at a likely higher value than what the Yield at that time would be. On the flip side, it is therefore possible for a user to buy in to the pool later, or if they missed the buy in period by buying one of these NFT’s on the open market.
5) Conclusion
Now, If you’ve been trying your best to follow along in this series but haven’t quite connected all of the dots yet, don’t worry. In the next part of the series, we will summarize everything we’ve covered in the last three videos into one, easy to understand video. I will also include my final thoughts on the platform and its implications for Hex.
Finally, I would like to give a massive shoutout again to the ICOSA Telegram chat including the Founder Alex, Cryptosloth, Bloo, Enigma, Nomad, Gifford, and many, many others who helped verify the info needed for this series. I could not have done it without you, thank you all.
- CRYPTOGRFX
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