MAP Protocol’s native token is $MAP. MAP token allows users to stake their MAP and earn a high annual percentage rate (APR).
Let’s first understand what APR is and how it is calculated. APR refers to ‘Annualized Percentage Rate’. APR is different from APY that takes the annual rate of return WITHOUT compound interest. Ex. 200% APR: $1 => $2. Does the higher APR, the better choice? That’s not true — the motivation for staking stems from the belief in the future growth potential of the token you are staking. For successful staking, the following factors are crucial.
1. Stability of token price: The price of the token you are staking is most important.
2. Value of token: Token staking rewards are only valuable if the token you staked is valuable.
The most important thing for staking is, above all, the price change of the token you staking. Here are key reasons why MAP protocol is the best choice.
Recently, many projects started native token staking upon launch. However, Map Protocol opens LP staking pool two years after its first launch. MAP Protocol has launched a testnet after long and in-depth research and development over the past two years and is set to launch the mainnet this quarter.
There are two types of blockchain projects. One is the project that starts staking at the same time of its launch and lists its tokens on the exchange in a few days. The other is that it starts staking after the test of time. What is the difference? Projects that begin staking programs on the first launch day mainly offer astronomical staking APR interest rates. And in just a few days, apr drops to 1/10 and even 1/100. And the price of tokens, which used to run on high ground at the time of their initial launch, soon fell sharply. No matter how high apr interest rates are, it can become useless when a token price approaches zero exchangeable value.
Token prices are volatile and can drop quickly. If your staked assets suffer a significant price drop, that could outweigh any interest you earn on them. Staking requires locking up investors’ tokens for a minimum amount of time. During that period, investors cannot do anything with staked assets, such as selling them. The most considerable risk we face with crypto staking is that the price decreases.
Based on this, I will introduce why MAP protocol is the best option for staking.
1. Map Protocol is a very stable project that has gone through its technical development for the past two years and has always tried to be innovative. And also, it is a project that has already experienced many types of market fluctuation through two years of operations, and we have learned how to overcome any facing risks.
2. The potential for future price hikes of MAP tokens is very noticeable. MAP protocol is the first true decentralized cross-chain bridge without any centralized nodes. It operates a testnet and is going to launch the mainnet this quarter.
3. MAP protocol adopts DAO governance. So, insider ownership in MAP protocol is significantly lower than in other projects. The graph is shown below:
Lastly, our team doesn’t want to be a smooth talker. Even if it may not receive explosive attention from the market, we want to be a trustworthy project that runs long-term and gains people’s trust.
Staking Rewards Calculations
Understanding how the MAP Protocol calculates and distributes token rewards is essential. The amount of staking rewards one can earn is proportionate to the total amount of tokens staked to the LP pool(MAP-ETH/ MAP-USDC).
For example, if there are 1000 total tokens staked and you have staked 100 of them, you can earn 10% of the total rewards distributed to the pool. If there are 2000 tokens staked in the pool and you have staked 100 of them, you’ll only earn 5% of the total rewards.
As is familiar with the PoS mechanism, the total number of staked tokens will increase as the pool matures and more people become familiar with it. It means that while today Staking rewards are split between a pool of a number of tokens, in the coming days, months, or years, that total amount of tokens staked could be as much as big. In theory, if you assume that there are 100 million tokens that were staked now and will be 400 million tokens staked in the future, you would receive ¼ of the number of rewards as one would today with only 100 million tokens staked. Keep this framework in mind as you consider staking to the network to earn token rewards on MAP protocol!