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ApeCoin Staking FAQ's
Read below for answers to our most Frequently Asked Questions.
You can always reach out with any and all questions via ParaSpace Twitter and/or join the conversation in our ParaSpace Discord channel. Below are our answers to our most Frequently Asked Questions.
ParaSpace charges a 3% ApeCoin Staking auto-compound fee to cover gas spent on auto-compounding. We have specifically set this threshold to cover the gas cost ParaSpace spends to auto-claim, compound, and auto-repay outstanding users' cAPE debt if applicable.
Users may track the Reserve + Protocol Revenue via this address. Any net profits from ApeCoin staking will be kept in the auto-compounding wallet unless stated otherwise.
If the user stakes their NFT alongside borrowed ApeCoin via the ParaSpace protocol and borrows the $APE for staking on ParaSpace but nothing else, their NFT would be safe from liquidation. It is possible that sharp ApeCoin appreciation and/or sharp NFT floor price declines could force her account's
to 1, in which case the protocol would call
unstakeAndRepayand return her NFT to her ParaSpace account. But her NFT would not be liquidated.Of course this changes if a user likewise borrows ApeCoin which they do not stake via ParaSpace, ETH, or other supported fungible tokens against the same NFT. Our studies suggest borrowing ETH against NFT's has historically been relatively low-risk but obviously not risk-free. And users should take care to monitor the Health Factor of their accounts to ensure their NFT’s are not at risk of liquidation.
ParaSpace's cAPE is a derivative token which corresponds 1:1 with ApeCoin staked and auto-compounded within the official ApeCoin DAO/Horizen Labs contract. If a user borrows cAPE their ApeCoin debt will at a minimum grow at the cAPE APY and any Borrow APY the user pays on the same. Specifically:
As of current writing single-side ApeCoin pool APR stands at 122% which leads to a compounded
of 241%. Separately the
currently stands at 11%. Using the above formula, our
is 279%.
This is obviously quite high, but if a user pays off the interest at regular intervals they cut that
to the APR of 122%. Thus on a daily basis they are in fact paying
, or 146% APR as long as they pay off interest and thus do not allow it to compound.
Users who stake into the single-side ApeCoin pool via ParaSpace receive cAPE in return, which is a derivative token 1:1 backed by the ApeCoin ParaSpace has staked on their behalf into the Horizen Labs contract. This process is permissionless and users can withdraw the underlying ApeCoin by unstaking it and withdrawing via the ParaSpace pool at any time.
Those who supply cAPE can likewise earn extra yield if they supply it to the ParaSpace money market, and other users can in turn borrow cAPE from the money market on a permissionless basis. The suppliers' motivation is to generate additional yield which can be substantial.
But cAPE lenders should be aware that there is liquidity risk if there is insufficient unutilized cAPE in the pool for their withdrawal. The ParaSpace interest rate model is such that interest rates rise significantly if lending pool utilization rises near 100%, thereby strongly encouraging users to repay debt and other cAPE holders to supply into the market. But this represents the additional risk of supplying cAPE to the lending market.
ParaSpace displays the user's Effective APY based on auto-compounding over the course of a year. On a daily basis this means the user earns the daily APR which is then compounded along with their principal to achieve the auto-compounding yield. The daily APR is necessarily below the auto-compounding APY, but the total value in yearly rewards will match the stated APY's at the stated daily rewards through the course of the year.
Notably ParaSpace likewise states Borrow APY's which assume the debt compounds over the course of the year. If a user pays off interest at regular intervals, however, the borrower will effectively pay much lower borrow rates than if total debt and interest is allowed to compound.
Not in the Bored Ape Yacht Club, Mutant Ape Yacht Club, or Bored Ape Kennel Club staking pools. But ParaSpace auto-compounds NFT pool staking rewards into the single-side ApeCoin staking pool in order to greatly improve ApeCoin yields.
If a user stakes their Bored Ape Yacht Club, Mutant Ape Yacht Club, or Bored Ape Kennel Club NFT via ParaSpace and subsequently sells it, ParaSpace will call
unstakeAndRepay to claim rewards, unstake the NFT and ApeCoin, and pay off any $APE loans before completing the sale. The seller's ParaSpace account will receive the price paid for the NFT and any ApeCoin staking rewards net of any interest owed on ApeCoin loans. The buyer receives the NFT as a standard transfer. The buyer may of course choose to subsequently stake the NFT via ParaSpace but this would be a separate transaction.Yes, users may stake ApeCoin into the single-side ApeCoin staking pool via ParaSpace and gain auto-compounding on their stake. Our borrow and lending market for APE and cAPE is permissionless and users can likewise borrow against supported collateral to then stake. But it is relatively less likely to be profitable to borrow ApeCoin to then stake in the single side pool.
Yes, ParaSpace now supports P2P pairing with Bored Ape Yacht Club, Mutant Ape Yacht Club, Bored Ape Kennel Club NFT's, and ApeCoin. Within this system users can find others who have the ApeCoin they lack or other NFT's and pair them with a fixed set of staking rewards split between users.