V2 Staking + $250k USDC Rewards

DragonSwap V2 Staking Upgrade

DragonSwap has upgraded its staking system with the introduction of the DragonSwap V2 Staker. This new platform is designed to offer greater transparency and empower users with more control over how they earn and manage their rewards. The V2 staker incorporates new mechanics, staking tiers, compounding reward options, and an OTC marketplace to provide enhanced flexibility for users.

To support the launch of the new V2 staker, a total of $250,000 in USDC rewards will be distributed over a three-month period, commencing on October 15th, 2025. During this migration phase, DRG emissions will continue for existing V1 stakers.

V2 Staking Migration Process

Migrating to the V2 staking system is a straightforward two-step process. Users first need to withdraw their DRG from V1 staking. Subsequently, they can deposit their DRG into V2 to begin earning rewards with the latest features and advantages.

V1 stakers will continue to receive emissions for 90 days, ensuring that all users who remain locked in will receive rewards throughout this transition period. After these 90 days, emissions for V1 will cease. New deposits into the V1 staking pool will be disabled immediately upon the deployment of the upgraded V2 staker.

How the New Staker Works

The V2 staker maintains the core functionality of the previous version, converting DRG to sDRG at a 1:1 ratio, while introducing additional functionalities and options for users.

Deposit Process

Users can stake their DRG to receive sDRG at a 1:1 ratio. The sDRG represents the user's staked position, and it begins earning rewards immediately upon deposit.

Withdrawal Process

Exiting the staking process involves two distinct steps:

1. Unstake sDRG: The initial transaction unstakes the sDRG, initiating a 180-day redemption period.
2. Redeem DRG: The second transaction converts the sDRG back into DRG. The total amount of DRG received is calculated based on the linear redemption period.

Supporting Long-Term Stakers

DragonSwap's staking system is designed to incentivize and reward long-term commitment. While stakers have the flexibility to unstake at any time, the system encourages sustained participation through a linear redemption period of 180 days.

If a user chooses to claim their DRG before the completion of the 180-day redemption period, a penalty is applied. This early redemption penalty starts at 50% and decreases linearly to 0% by day 180. This mechanism ensures that long-term participants who believe in the protocol's growth are consistently rewarded for their commitment.

All penalties collected from early redemptions are automatically redistributed to active stakers. This creates a positive feedback loop that aligns the protocol's success with its most dedicated supporters.

Staked States

A user's staked position can exist in one of three states:

1. Active: The position is actively earning and compounding rewards.
2. Redemption: The sDRG has entered the redemption process and is no longer earning rewards.
3. Active OTC: The stake is listed for sale on DragonSwap's marketplace, and rewards continue to accrue.

When a stake is listed on the marketplace, it is offered directly to another user at a price determined by the seller. Rewards continue to accrue until the order is matched. Once an order is matched, the stake is automatically transferred to the buyer. The seller receives an immediate payout for the sold stake, and the buyer receives the staked DRG. DragonSwap applies a marketplace fee to both buyers and sellers, which will be utilized for further DRG support.

Rewards and Compounding Options

Users have direct control over how their earned rewards are managed:

1. Claim: Rewards are sent directly to the user's wallet.
2. Compound:

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     DRG rewards are re-staked at a 1:1 ratio as sDRG.
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     USDC rewards are used to perform market buys of DRG, which are then staked as sDRG.

This feature allows users to compound their positions seamlessly. Users can choose to compound their rewards manually or enable an automatic compounding option.

Autocompounder Functionality

Users can configure how their earnings are handled through the autocompounder feature:

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  No Autocompound: Rewards accumulate in the user's account until they are manually claimed.
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  Autocompound DRG: Rewards are automatically converted from DRG to sDRG at a 1:1 ratio once per day.

To enable autocompounding, a minimum of 5 USDC in rewards is required. Users retain complete control over their staking strategy, with the option to claim rewards manually or automate the process.

Staking Tiers Introduced

The V2 staking system introduces a tiered structure that categorizes users based on the USD value of their staked DRG. This system is designed to be inclusive for smaller holders while providing progressive recognition for larger participation levels. The tiers are as follows:

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  Tier 1 - Baby Dragon: $0 – $200
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  Tier 2 – Bronze Dragon: $200 – $1,000
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  Tier 3 – Silver Dragon: $1,000 – $5,000
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  Tier 4 – Gold Dragon: $5,000 – $10,000*
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  Tier 5 – Platinum Dragon: $10,000 – $25,000
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  Tier 6 – Emerald Dragon: $25,000 – $50,000
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  Tier 7 – Diamond Dragon: $50,000+

*Eligibility for the DRG Airdrop 2 is unlocked upon reaching the Gold tier.

Benefits of Staking Tiers

In addition to standard staking rewards, higher tiers offer enhanced benefits. These include priority access to new product features, boosted reward rates, and exclusive partner opportunities. This tiered system ensures that while all stakers contribute to the protocol's growth, those with greater commitments receive increased recognition, access, and potential upside.

A Comprehensive Staking Experience

The upgraded DragonSwap staker provides a more complete and integrated staking experience. It combines yield generation, compounding functionalities, and liquidity management within a single, clear system. Throughout this process, users' DRG remains active, earning rewards and engaging in redemption in a manner that aligns with their individual strategies.