The KLIMA demand sink: How to earn rewards with C3’s wsKLIMA Staking Gauge

4. Mai 2022

Deepening its alignment with KlimaDAO’s mission to reward those who participate in financial activism for the climate, C3 has launched its wsKLIMA Staking Gauge. The gauge enables users to stake their wsKLIMA in exchange for C3’s governance tokens as rewards.

The wsKLIMA Staking Gauge showcases the power of the C3 platform by creating a win–win–win outcome for KLIMA token holders, the KlimaDAO protocol, and the C3 ecosystem:

• Klimates can put their KLIMA to work. By depositing wsKLIMA into the gauge, they earn C3 rewards, over and above KLIMA rebase rewards.
• As more Klimates lock their wsKLIMA, a demand sink is created whereby KLIMA is removed from circulation. This reduces volatility and increases economic security for KlimaDAO. KLIMA being locked in C3 sends a signal of stability to prospective buyers.
• C3 distributes its governance token to KLIMA holders, bestowing governance power on Klimates. Since C3 and KlimaDAO share an aligned vision for the future of the on-chain carbon market, this distribution model deepens the alliance between the two communities.

Ultimately, the benefits of this incentive mechanism are passed on to projects that are helping to fight climate change by mitigating the impact of greenhouse gas emissions. The C3 token rewards that are distributed will create a new class of participants in C3’s decentralized voting system that determines which climate-positive projects receive support – and the additional utility and security for the KLIMA token will strengthen its position as a carbon reserve currency.

The impact can already be seen, with over $1 million in KLIMA locked in the wsKLIMA Staking Gauge within the first 24 hours of launch.

Follow the steps below to deposit your wsKLIMA into the C3 wsKLIMA Staking Gauge.

The steps to earning C3 rewards with the wsKLIMA gauge

Earning rewards with the wsKLIMA gauge is a five-step process:

1. Wrap your staked KLIMA
2. Head to the ‘Staking’ page on C3.app, connect your wallet, and select the wsKLIMA gauge
3. Specify your balance, and time to lock
4. Lock your wsKLIMA in the gauge
5. Monitor your rewards, and claim them periodically

We’ve illustrated the steps below: 

1. Wrap your staked KLIMA

You can do this with the KlimaDAO app. Unlike sKLIMA, your wsKLIMA balance will not increase over time – but the rebase rewards are exactly the same (# sKLIMA = wsKLIMA x index). You can always unwrap wsKLIMA for sKLIMA.

2. Head to the ‘Staking’ page on C3.app, connect your wallet, and select the wsKLIMA gauge

When you navigate to the ‘Staking’ page, be sure to ‘Connect your Wallet’.

3. Specify your balance, and time to lock

You can lock for one day, 365 days, or anywhere in between. The longer you lock your wsKLIMA for, the more your reward share will be boosted, up to a 2x boost. More on this in the section below, titled ‘How to maximize your rewards’.

4. Lock your wsKLIMA in the gauge

Approve the transaction, and click ‘Lock’.

5. Monitor your rewards, and claim them periodically

Your C3 rewards start to accumulate immediately. For more information on claiming and using your C3 rewards, consult the C3 User Guide, which also explains how to lock your C3 for veC3 and participate in governance of the C3 platform.

Assessing risk when using the wsKLIMA Staking Gauge

As with any time-based locking mechanism, users are faced with liquidity risk. You are trading the liquidity of your assets for the platform’s rewards. If you lock your wsKLIMA for a full year, you will not be able to withdraw your position until the lock period is over. Make sure to consider your decision carefully.

By locking wsKLIMA in the C3 staking contract, you will not be eligible to vote in on-chain voting for KlimaDAO governance proposals (KIPs) with the quantity of wsKLIMA that you have locked. This is because you are depositing your specified wsKLIMA balance outside of your own wallet address. By earning C3 and vote-locking it for veC3, you will however be able to participate in C3 governance – so be sure to carefully consider all factors in forgoing your ability to participate in KlimaDAO voting.

The C3 contracts are forked from audited Frax Finance contracts, which currently hold $2.21 billion in TVL (Total Value Locked) and have the trust of many of DeFi’s largest protocols. During the governance process for KIP-22, the KlimaDAO policy team deemed that the smart contract risks involved for staking are at acceptable levels.

How to maximize your rewards

As a user of the C3 platform, you have several levers to pull to maximize your rewards earned. The main factors to consider are as follows:

• How long will you lock your wsKLIMA?
  As seen in Step 3 above, you can stake your wsKLIMA for one day, 365 days, or anywhere in between. The longer you lock, the greater your share of the rewards earned. For example: If two users lock 20 wsKLIMA each, where User A locks for a week and user B locks for a year, User B will receive a greater share of rewards.
  
  This happens through C3’s reward boosting system. By locking for 365 days, you are able to achieve a max boost of 2x to increase your earn rate.

• How much wsKLIMA will you lock?
  While the quantity of wsKLIMA locked does not increase your rewards boost rate, locking in greater quantities will yield greater rewards. As at the time of writing, the wsKLIMA Staking Gauge yields an APR of 50%. This yield can increase or decrease depending on how competitive the gauge is – keep an eye on the ‘TVL’ metric in the ‘Staking’ dashboard.

• How much veC3 will you hold?
  veC3 stands for ‘Vote-Escrowed C3’. To obtain veC3, you must vote lock your C3. By holding 4 veC3 for every 1 KLIMA staked, you will qualify for an additional max boost of 3x to increase your C3 earn rate. You can also check the “min veC3 required for max boost” wording on your dashboard. Having locked your wsKLIMA for a year, and the minimum amount of veC3 as per your dashboard, you qualify for a 5x earn rate boost. For more on veC3, consult the C3 User Guide.

With the above considered, use the strategy that best suits your time horizon and objectives. Get started by visiting C3.app!