VRTX Vertical Program - Unveiling the Staking Upgrades of Stage 2
We’re excited to usher in the next phase of the VRTX Vertical Program! Stage 2 features a fully revamped staking system that is poised to drive long-term growth and deliver rewards to the dedicated Vertex community.
Stage 2 takes a major step towards achieving Vertex’s multi-year vision of growing the industry’s first synchronous network of exchanges.
The staking upgrade implementation will occur throughout the upcoming weeks, followed by a flexible transition period to ensure community engagement and support.
Let’s dive into the details, anon.
Core Highlights of the New VRTX Staking System
Stage 1 introduced the reduction of VRTX rewards emissions by 50% as a means to redirect token holdings to support broader growth initiatives beyond trading rewards. Moving forward, a portion of the resources saved from the Stage 1 emissions reduction will be allocated into an enhanced, sustainable staking system.
Primarily derived from community feedback, the new staking mechanism can be defined by 4 primary upgrades.
1. Auto-Compounding Rewards
Staking rewards will automatically compound, continually growing the user’s staked balance without the need for manual compounding, boosting long-term returns seamlessly.
USDC from trading fees will be used to buy back VRTX. The purchased VRTX will then be transferred to the staking pool to grow stakers’ participation in the protocol over time.
2. Immediate Access to Maximum Staking Rewards
The original VRTX staking model required VRTX stakers to wait at least 6 months before receiving the maximum yield possible – based on their voVRTX score. While this rewards many users who staked early in the project’s history, it has also discouraged new stakers as the Vertex product has evolved.
In the new model, users can stake VRTX at any time and instantly start earning the maximum yield, simplifying the staking process and rendering staking rewards more accessible.
Instant yield access allows new and experienced users to maximize their earnings from day one, reducing friction while also encouraging broader participation.
3. Flexible Unstaking Options
The Stage 2 upgrade allows users to unstake their VRTX at any time, subject to a 21-day cooldown period before their tokens are returned to their wallet.
For those who prefer immediate access, there is an option to bypass the cooldown by incurring a 10% early withdrawal penalty, reinforcing the program's focus on incentivizing patience and loyalty.
To further emphasize long-term commitment, staked VRTX will remain non-transferable.
The penalties collected from immediate withdrawals will be redistributed to the following week’s yield pool, providing long-term stakers with enhanced rewards.
4. Sustainable Rewards Model
Stage 2 introduces a more sustainable staking rewards structure across a more diverse set of yield sources. The total yield can be broken down into 3 primary streams:
- Base APY: A portion of the VRTX emissions saved from recent reductions in trading incentives will be allocated to generate additional yield for stakers. This yield will start at an annualized rate of 15% and gradually taper to 1.5% over the course of three years.
- Fee APY: Trading fees will be used to buy back VRTX and add it to the staking pool. Initially, 50% of all protocol fees will go toward these buybacks, gradually increasing to 100% of total protocol revenue.
- Loyalty APY: Participants who bypass the 21-day cooldown period will incur a 10% early unstake penalty. The revenue from these penalties will be redistributed as additional staking yield for long-term participants
The reimagined staking system strikes a balance between rewarding both early adopters and new community members. By fostering long-term alignment, Vertex can ensure the protocol’s sustainability while delivering value to active participants.
Migration Bonus for voVRTX Holders
To reward loyal users, current voVRTX holders will receive a migration bonus of 2.5% to 7.5% based on the duration of their stake, recognizing early adopters as the protocol transitions to the new system.
A Clear Path Forward
The staking upgrades introduced in Stage 2 of the Vertical Program are designed to balance the interests of early adopters and new community members, fostering long-term alignment. As we continue to refine the Vertical Program, community feedback remains essential to ensure a smooth transition and protocol sustainability.
Stay tuned for further updates as we progress toward Vertex’s goal of building the first synchronous network of exchanges!
About Vertex
Vertex was founded by a team of seasoned traders and engineers from both traditional finance and DeFi markets. Recognizing the need for more flexible DeFi trading, Vertex launched on Arbitrum and now is proud to play a role in the innovation of a multi-chain DeFi ecosystem.