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BlockEstate, a new player in the RWA area, is going to make waves with its innovative use of staking smart contracts. These contracts are a cornerstone of the BlockEstate ecosystem, enabling users to stake their $BEH tokens and earn rewards in $USDC. This article will delve into the mechanics of these staking smart contracts, illustrating their functionality with practical examples.

Staking in the context of blockchain technology usually refers to the process of actively participating in transaction validation on a proof-of-stake (PoS) blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn staking rewards.

BlockEstate has adopted this concept and integrated it into its real estate project, allowing users to stake their $BEH tokens. Since BlockEstate is not a blockchain, but a protocol on the Arbitrum Blockchain, its staking mechanism does not validate transaction on the Blockchain, but solely gives $BEH token holders the ability to participate in governance and receive their slice of protocol profits.

The staking process on BlockEstate is governed by smart contracts. A smart contract is a self-executing contract with the terms of the agreement directly written into code. It is stored and replicated on the blockchain, and its execution is supervised by the network of computers that run the blockchain. This ensures that the contract is executed exactly as written, providing a high level of trust and security.

BlockEstates staking smart contracts work in a straightforward manner. Users who wish to stake their $BEH interact with the contract by sending a transaction to it, indicating the amount they wish to stake. The smart contract then stores these tokens. In return, the staker receives rewards, which are also defined and automatically distributed by the smart contract. BlockEstate will use $USDC rewards, which are distributed by the staking contract over the course of three months. Every three months the contract is refilled with new $USDC. But, where does the USDC come from?

The rewards for staking come from one source: Real World Assets, or more specific, the underlying real estate portfolio of BlockEstate. There will therefore never be token inflation, as seen with multiple projects in the past, which used their native tokens as emissions, effectively diluting token holders. The BlockEstate reward system incentivizes users to stake their tokens, as it provides them with a steady income stream in $USDC. A $BEH holder will not be forced to lock their tokens. Once your tokens are staked, you will see continous reward emissions. You can ALWAYS withdraw your tokens, whenever you want! Just keep in mind, as soon as you do, the rewards stop coming in!

To illustrate, lets consider an example.

Toki, a BlockEstate user, decides to stake his 50.000 $BEH. He interacts with the staking smart contract, which stores his tokens until he withdraws them. During this time, the projects generates quarterly revenues of 35.000 $USDC. Toki, along with other stakers, receives a portion of these 35.000 $USDC proportional to his staked amount of $BEH. If Tokis stake represents 1% of all staked tokens, he would receive 350 $USDC as his reward, given he stakes his tokens for the full three months time period.

The staking smart contracts of BlockEstate also include considerations to ensure fairness and security. For instance, there is a NO minimum staking period or amount to prevent users from constantly staking and unstaking to game the system. However, the system is ungameable in this regard, because the staking rewards are distributed over the course of three months. Users that want to receive their whole respective share of these rewards, need to stake their $BEH tokens for the full duration of three months. Each day the $BEH tokens remain staked, the rewards will acrue the token staker. Users that unstake their tokens earlier, will receive less. If we use our example from above: If people withdraw their $BEH (the total amount of staked $BEH decreases), the remaining stakers will receive more rewards, as the total reward pool is divided by less stakers.

Additionally, the contracts are public, constantly tested and will be audited by a third-party security firm to ensure they are free from any vulnerabilities.

Right now, the staking contract is live on a forked mainnet for a controlled testing environment, named BEH Testnet. We welcome everyone to participate in beta testing our staking contracts! Hop on our Discord server, navigate to the #dev-updates channel and follow the instructions!

At this point, we would like to thank our developer Niera, who wrote the BlockEstate staking contracts from scratch and happily answers questions about the technical details in our Discord server!

Check out his work at https://github.com/BlockEstate

TL,DR

BlockEstates staking smart contracts provide a secure and efficient way for users to earn rewards by staking their tokens. They are a key component of the BlockEstate ecosystem, incentivizing user participation and contributing to the platforms overall security.

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Understanding the Smart Contracts of BlockEstate: A Deep Dive into ... - Medium