Users can stake their fToken and earn an additional yield on them. This works in a very similar way to Algorand Governance, where users commit an amount which they must ensure their balance remains above for the duration of the governance period.
Users can stake their fToken by committing them for a 24-hour period. They can unstake their fToken at any time, but they can only get rewards for the cycle they participate in completely. If the users' balance falls below the amount they have committed for any reason, they will not receive rewards for that cycle.
Staked deposits remain in the users' accounts and they have the ability to change their committed amount at any time. It is important to highlight that deposits used as collateral for loans do not count towards your committed amount since these are stored in an escrow account.
The user must commit before the 24-hour period begins in order to be eligible for rewards for that cycle. Similarly, if the user changes their committed amount, then this will only take effect in the following 24-hour period. Each 24-hour period starts at midnight UTC.
The amount of rewards for a 24-hour period are fixed. For example, if Folks Finance sets a daily amount of 5000 ALGOs for staking fUSDC; if there are 100,000 fUSDC staked, then 1 fUSDC is earning 0.05 ALGO daily.
The users' fToken balance must remain above their committed amount for the 24-hour period. If they are successful in doing this, then they are entitled to receive rewards for the committed amount (not their min balance over that period).
The rewards will be paid out weekly by a direct transfer to the users’ account.