AxoriaPrice

(AX)

Staking Axoria (AX) carries inherent risks, typical of Decentralized Finance (DeFi) protocols. These include potential smart contract vulnerabilities, which could lead to exploits, and broader economic risks. A significant risk specifically mentioned is that associated with liquidations, where your staked AX tokens might be utilized or converted into collateral. While Axoria has undergone audits by security firms to mitigate some risks, users are always encouraged to conduct their own thorough research before participating.

The Annual Percentage Yield (APY) for staking $AX is variable and not fixed. Its value is influenced by dynamic factors such as liquidation events within the Axoria protocol and the ongoing emissions of AX tokens. This variability means the APY can fluctuate significantly, ranging from a single-digit percentage during periods of market stability to potentially triple digits or even higher during times of increased market volatility.

In the Axoria ecosystem, AX and veAX serve distinct purposes. AX is recognized as the liquid governance token, meaning it can be freely traded and transferred. In contrast, veAX, which stands for vote-escrowed AX, is a non-transferable token. It represents crucial voting power within the Axoria governance system. Users obtain veAX by intentionally locking their AX tokens, thereby committing them for a period to gain influence in governance decisions.

Accumulated AX rewards can be claimed at any time, with no specified frequency limit. However, it's important to note that every claim transaction will incur a gas fee. Regarding compounding, AX rewards do not automatically compound. To grow their position, users are required to manually claim their accumulated rewards and then redeposit these claimed tokens back into the Stability Pool. This manual process is essential for effectively compounding one's staked assets within Axoria.

Based on the available information, there are no explicit details provided regarding a mandatory lockup period for staking AX tokens directly. While the process of claiming and redepositing rewards is mentioned, which implies some form of interaction with the staked tokens, the text does not specify any fixed duration during which AX tokens must remain locked after initial staking. Users should review the latest documentation for comprehensive details on staking terms.

During a liquidation event in Axoria, a fundamental system mechanic is activated: staked AX tokens are utilized to purchase liquidated collateral. This process is an accepted risk for users who stake AX. Consequently, the user's AX token balance may decrease as it is converted to acquire the liquidated collateral. Simultaneously, their collateral balance will increase. This mechanism is a core operational aspect designed to maintain the stability and health of the Axoria protocol.