Why is There a Cooldown Period?

When a staker decides to remove their stake position, multiple things happen:

1. Most importantly, the stake position stops earning XL1 rewards. This will happen the moment the staker confirms the unstake action on that position.

2. The XYO Tokens originally used in that staking position are not immediately returned to the wallet that staked with them.

3. A countdown, or "Cooldown Period" begins, signaling the system is both reviewing Node Stakers for potentially malicious actions and properly regulating the flow of XL1 tokens to reduce volatility for holders.

This Cooldown Period serves two key purposes as mentioned above: Protecting the network from malicious behavior and sustaining a well-regulated token economy.

Network Protection

In Node Staking, the delay is primarily a safeguard against bad actors. If a node behaves dishonestly or provides invalid data, its stake can be slashed. The Cooldown Period after unstaking ensures that these penalties can still be applied before funds leave the system. It discourages manipulation and ensures that all nodes act in good faith throughout their participation.

Token Protection

In System Staking, there is no slashing because the staker has no ability to carry out malicious actions. In this case, the Cooldown is mainly for XL1 and XYO Token protection.

With the Cooldown Period, staked XYO Tokens remain temporarily locked, preventing them from being fully withdrawn for a period of time. This slows the supply in circulation and prevents sudden shifts in token supply that could disrupt balance. This stability also supports the network’s overall health and encourages long-term contribution and use.

Learn more about each step of the Staking Process.