> For the complete documentation index, see [llms.txt](https://docs.summer.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.summer.fi/~/revisions/JU8hp8HXnIoqAVgQjTR0/lazy-summer-protocol/governance/usdsumr-token/staking.md).

# Staking

Staking V2 is the upgraded staking module for the SUMR governance token. It extends SUMR utility beyond governance participation and introduces new economic alignment between long-term SUMR holders and the growth of the Lazy Summer Protocol.

Staking V2 replaces the previous Staking V1 module and introduces a lock-based system, dual reward streams, and simplified governance power mechanics designed to support the next phase of protocol expansion.

### **What is Staking V2?**

Staking V2 allows SUMR holders to stake and optionally lock their positions to receive:

* **Governance power** (with no voting power decay)
* **SUMR emissions** (community incentives)
* **USDC-denominated vault rewards** (from protocol revenue)

Stakers continue to participate in governance through direct voting or by delegating. Staking V2 unifies token utility around long-term protocol alignment, predictable governance power, and access to protocol-level rewards.

### **Key Improvements vs Staking V1**

Staking V2 fundamentally changes how SUMR integrates with governance and protocol incentives.

#### **1. Governance power without decay**

In V1, voting inactivity reduced voting power over time.\
In V2, governance power is **constant** for the full duration of the stake or lock. Users can vote directly or delegate to those who curate ARKs, evaluate proposals, and uphold protocol standards.

#### **2. Dual rewards (SUMR + USDC)**

In V1, stakers earned only SUMR rewards.\
In V2, stakers may earn:

* **SUMR emissions** – from tokens earmarked for community distribution (streamed)
* **USDC-denominated LV tokens** – routed from protocol revenues generated by Lazy Vault deposit flows

These LV tokens automatically compound inside the Lazy Summer Protocol’s Base USDC LR Vault.

#### **3. Lock-based multipliers**

Stakers may optionally lock their SUMR stake for increased alignment and higher potential rewards.\
A longer lock grants a higher **multiplier** applied to SUMR and USDC rewards.

> The formula used for the multiplier calculation is: `7e-16 * seconds^2 + 1`

#### **4. Lock buckets with capacity limits**

Each lock duration has a fixed capacity.\
Once full, no additional SUMR can be locked in that bucket unless capacity is increased by governance.

### **Why Stake SUMR?**

Staking SUMR in V2 serves three primary functions inside the protocol.

#### **1. Participate in Governance**

Staking SUMR grants governance power used to:

* Onboard or offboard FLEETs/ARKs
* Set protocol parameters
* Allocate protocol revenue between lockers, growth incentives, and treasury
* Hold contributors accountable

SUMR is the coordination layer for the protocol. Staking expresses alignment.

#### **2. Earn SUMR Emissions**

Stakers earn SUMR from community distribution schedules.\
Locking increases reward weight, enabling long-term holders to receive a proportionally larger share of SUMR emissions.

#### **3. Receive Protocol Revenue (USDC)**

A portion of Lazy Summer Protocol revenue (based on the revenue **of strategy yields**) is allocated to SUMR lockers.

Revenue is distributed as **USDC-denominated LV tokens**, which continue auto-compounding in the underlying vault strategy (USDC LR on Base). This ties SUMR staking returns directly to vault usage, strategy performance, and protocol adoption.

### **How Staking Works**

#### **Stake Creation**

Users deposit SUMR into the staking module to create a position.\
Each position is independent and can have its own lock duration and reward multiplier.

#### **Lock Durations**

Available locks range from **no lock** to approximately **3 years**.

Each lock defines:

* A **time commitment**
* A **reward multiplier** (applies to SUMR + USDC rewards)
* A **capacity limit** (maximum SUMR allowed in that bucket)

Overview:

| Lock Duration       | Multiplier | Capacity Limit | Notes                             |
| ------------------- | ---------- | -------------- | --------------------------------- |
| No Lock             | 1.0×       | 15.000.000     | Flexible, no time commitment      |
| 14 Days - 3 Months  | ↑          | 15.000.000     | Introductory commitment           |
| 3 Months - 6 Months | ↑↑         | 35.000.000     | Medium-term alignment             |
| 6 Months - 1 Year   | ↑↑↑        | 60.000.000     | High alignment                    |
| 1 Year - 2 Years    | ↑↑↑↑       | 100.000.000    | Higher alignment                  |
| 2 Years – 3 Years   | 7.26x      | unlimited      | Highest conviction and multiplier |

#### **Capacity Limits**

Lock buckets close when capacity is reached.\
Users may:

* Choose a different bucket
* Split positions across multiple locks
* Wait for governance-approved capacity increases

#### **Rewards Accrual**

Staking rewards accumulate continuously and include:

* **SUMR emissions** – proportional to stake × multiplier
* **USDC LV tokens** – proportional to stake × multiplier × protocol revenue

SUMR rewards can be claimed at any time; USDC rewards will be distributed on monthly basis.

#### **Early Withdrawal Penalty**

Users may exit a locked position early, but an early withdrawal penalty applies:

* Maximum penalty: **20% of principal**
* Penalty decreases linearly as the lock approaches expiry
* Designed to reward commitment while allowing flexibility if circumstances change

Penalties remain inside the staking module and increase yield to remaining lockers.

### **Governance Participation After Staking**

Staking V2 resets all prior delegation.\
After staking or migrating from V1, users must **re-delegate** to the delegate of their choice.

Delegation determines:

* Who exercises your voting power
* Which delegate earns active participation rewards
* How effectively governance decisions reflect your preferences

Delegation can be changed at any time.

### **Migrating from Staking V1**

If you previously used Staking V1:

1. Unstake from V1
2. Claim any unclaimed SUMR
3. Restake using Staking V2
4. Optionally lock to select your multiplier
5. Re-delegate to a delegate of your choice

Migration is mandatory before earning rewards under Staking V2.

### **Staking and Protocol Alignment**

Staking V2 integrates SUMR more tightly with the Lazy Summer Protocol by:

* Introducing stake-based alignment (locks + multipliers)
* Removing governance decay
* Routing protocol revenue directly to lockers
* Strengthening delegation incentives
* Aligning SUMR value with vault adoption and long-term strategy performance

This establishes SUMR as an economically productive governance asset designed for protocol-scale growth.

### **Getting Started**

You can stake SUMR through the Summer app:

[**https://summer.fi/earn/staking**](https://summer.fi/earn/staking)

Typical steps:

1. Stake SUMR
2. Select lock duration
3. Review projected rewards
4. Submit stake
5. Delegate voting power

Once staked, rewards begin accruing automatically.