Staking Guide
Staking is how investors participate in Locale Lending pools. This guide covers mechanics, strategies, and best practices.
The Share Model
When you stake USDC, you receive shares representing pool ownership:
Shares Received = (Stake Amount × Total Shares) / Total Pool Value
Share Value = Total Pool Value / Total Shares
As pools earn yield from borrower interest, share value increases.
Example
Initial State:
- Pool Value: $1,000,000
- Total Shares: 1,000,000
- Share Price: $1.00
Your Stake: $10,000
- Shares Received: 10,000
- Ownership: 1% of pool
After Pool Earns $50,000:
- Pool Value: $1,050,000
- Share Price: $1.05
- Your Position: ~$10,495
Requirements
Minimum Stakes
| Pool Type | Minimum |
|---|---|
| Small Business | $1,000 |
| Real Estate | $5,000 |
| Consumer | $500 |
| Mixed | $1,000 |
Token Requirements
- Asset: Native USDC on Arbitrum only
- Approval: One-time token approval required
Staking Process
Step 1: Approve USDC
Before staking, approve the StakingPool contract to spend your USDC:
Wallet → Approve → StakingPool Contract
This is a one-time approval per pool.
Step 2: Execute Stake
The stake transaction:
- Transfers USDC to pool
- Mints shares to your wallet
- Records timestamp
Step 3: Confirmation
After staking, you receive:
- Transaction confirmation
- Share balance update
- Current share value
Fee Structure
Staking Fee
0.1% deducted from stake amount.
Stake: $10,000
Fee: $10 (0.1%)
Net Investment: $9,990
Management Fee
0-2% annually (pool-specific) on total value locked.
Performance Fee
0-20% (pool-specific) on profits only.
Fee Example
Stake: $10,000
Staking Fee: $10 (0.1%)
Net Investment: $9,990
Gross Returns (12%): $1,199
Management Fee (2%): $200
Performance Fee (20% of profit): $200
Net Profit: $799
Net Return: 8%
Unstaking
Cooldown Period
Unstaking requires a 7-day cooldown:
- Request Unstake — Initiates cooldown
- Cooldown Period — 7 days, shares locked
- Complete Unstake — Burns shares, returns USDC
During Cooldown
- Shares are locked
- No yield earned during cooldown
- Cannot cancel (must complete)
Partial Unstakes
You can unstake any portion of your shares:
Total Shares: 10,000
Unstake Request: 5,000 shares
After Cooldown:
- Receive USDC for 5,000 shares
- Retain 5,000 shares (still earning)
Investment Strategies
Dollar-Cost Averaging
Reduce timing risk by spreading investments:
Month 1: Stake $2,500
Month 2: Stake $2,500
Month 3: Stake $2,500
Month 4: Stake $2,500
Total: $10,000 at average entry price
Yield Optimization
Compare APYs across pools:
| Pool | APY | Risk |
|---|---|---|
| Small Business | 8-12% | Medium |
| Real Estate | 6-9% | Lower |
| Consumer | 10-15% | Higher |
| Mixed | 7-11% | Balanced |
Portfolio Rebalancing
Review allocations quarterly:
- Target: No pool > 30% of portfolio
- Adjust based on performance
- Consider risk tolerance changes
Risks
Pool-Level Risks
| Risk | Description |
|---|---|
| Default Risk | Borrowers may not repay |
| Liquidity Risk | High utilization may delay withdrawals |
| Smart Contract Risk | Potential vulnerabilities |
Mitigation
- Diversify across multiple pools
- Monitor pool health metrics
- Understand each pool's risk profile
Getting Started
- Connect Wallet — MetaMask, WalletConnect, or social login
- Get USDC — Bridge to Arbitrum if needed
- Browse Pools — Review available pools
- Stake — Start with minimum amount
- Monitor — Track via Portfolio page
Next Steps
- Portfolio Management — Track your investments
- Yield Calculation — How returns work
- Risk Assessment — Evaluating pools