Staking

Staking lets you earn yield from protocol fees. When you stake plDXY-BEAR or plDXY-BULL, you receive staked tokens (splDXY-BEAR or splDXY-BULL) that appreciate over time as rewards flow in.

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Staking Your Tokens

To stake:

1. Choose which token to stake (plDXY-BEAR or plDXY-BULL)

2. Enter the amount

3. Receive staked tokens (splDXY) representing your share of the vault

To unstake:

1. Enter the amount of splDXY to withdraw

2. Receive your underlying tokens plus any accrued yield

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How Yield Works

Staking yield comes from protocol fees. When yield is harvested from the Splitter, 80% flows to stakers (20% goes to the treasury).

The RewardDistributor converts this USDC into plDXY tokens and donates them to the staking vaults. This increases the exchange rate between splDXY and the underlying token—your splDXY shares become redeemable for more tokens over time.

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The Reward Flywheel

Rewards aren't always split 50/50. The protocol compares each token's market price against its theoretical oracle value and allocates more rewards to whichever token is underperforming.

Price Discrepancy	Underperformer Gets	Other Gets
0%	50%	50%
1%	~63%	~37%
2% or more	100%	0%

At a 2% discrepancy threshold, 100% of rewards flow to the underperforming token's stakers.

This creates a self-correcting mechanism:

1. Token trades below the theoretical value

2. Its stakers receive outsized rewards

3. The RewardDistributor buys the underpriced token on Curve to distribute as yield

4. Arbitrageurs may also buy to capture the elevated staking APY

5. Combined buying pressure pushes the price toward equilibrium

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Staking vs Holding

Aspect	Holding	Staking
Earn yield	No	Yes
Price exposure	Yes	Yes
Use as Morpho collateral	No	Yes
Liquidity	Immediate	Immediate

Staked tokens can be unstaked at any time with no lockup period.

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Staked Tokens as Collateral

Leveraged positions require staked tokens as Morpho collateral. When you open a leveraged position, the router automatically stakes your tokens before depositing them to Morpho.

If you want to use Morpho directly (outside of the Plether interface), you'll need to stake your tokens first to obtain splDXY-BEAR or splDXY-BULL.