What is Staking
Staking is a secondary value accrual strategy of Dominium. Stakers stake their DOM on the Dominium website to earn rebase rewards. The rebase rewards come from the proceeds from bond sales, and can vary based on the number of DOM staked in the protocol and the reward rate set by monetary policy.
Staking is a passive, long-term strategy. The increase in your stake of DOM translates into a constantly falling cost basis converging on zero. This means even if the market price of DOM drops below your initial purchase price, given a long enough staking period, the increase in your staked DOM balance should eventually outpace the fall in price.
When you stake, you lock DOM and receive an equal amount of sDOM. Your sDOM balance rebases up automatically at the end of every epoch. sDOM is transferable and therefore composable with other DeFi protocols.
When you unstake, you burn sDOM and receive an equal amount of DOM. Unstaking means the user will forfeit the upcoming rebase reward. Note that the forfeited reward is only applicable to the unstaked amount; the remaining staked DOM (if any) will continue to receive rebase rewards.