# Staking Mechanics

Token Locking, Stake Weight, Rewards, and Governance

PepperDEX staking requires users to lock tokens in the PEP staking contract. Tokens can be locked at intervals between a minimum of 1 month and a maximum of 36 months (or 3 years). The protocol recognizes the large disparity in the minimum and maximum staking periods. Therefore, while all stakers will be rewarded for participating in the staking protocol, the protocol will give greater stake weight (via a stake weight multiplier) to wallets willing to lock tokens for a longer term. This is for two reasons:

1. Long-term staking carries much greater market and protocol value risk (since tokens are locked and cannot be unlocked) and should be compensated for this risk.
2. The protocol encourages long-term staking for wallets that are willing to align with and participate in the long-term objectives of the protocol with more stake weight as well as weighted governance voting power.

## Stake Weight Multiplier

The staking contract includes a stake weight multiplier. This will apply on a linear scale to all staked tokens that lock for greater than 1 year (1.x multiplier) out to the maximum staking period of 3 years (3x multiplier). An example of the effect of these multipliers can be shown below:

<figure><img src="https://lh4.googleusercontent.com/GJdPYvUSDd0kP_8GnUxtY2dGtBcdWmfIUwrVFrouGbgRWZgjw8dfw7Rn8QSQBTzl82L4JPJXXaW7qWCTbyyt75QsGVYJAhbAxwmOJKyZ5c6QinavXBPoQZcXgsQ12QDHhXGXCF-cDUmpuX0NJ7p1re4" alt=""><figcaption></figcaption></figure>

The simple example above shows the effect longer lock periods have on staking, governance weight, and rewards. (Please note: This is not financial advice. This table makes assumptions on token price and Reward Pool values strictly for informational purposes. Values may not accurately reflect current or future value).
