# Staking Mechanism

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## Staking Mechanism and Incentive: Polyquest ($POLY)

**Polyquest**'s staking mechanism not only rewards users for participating but also addresses a unique challenge in prediction markets: **the timing of votes**.

1. **Timing Disadvantage**: In prediction markets, users who vote (make predictions) earlier often face a disadvantage compared to those who vote closer to the closing date. Later voters have the benefit of more information, which can lead to better-informed decisions, putting early voters at a potential disadvantage.
2. **Incentive for Early Voting**: To counterbalance this, Polyquest has implemented a staking incentive. When users make a vote by depositing USDC into a market contract, their deposit is considered the **staking principal**. This principal is then eligible for staking rewards, calculated based on:

   * **APR (Annual Percentage Rate)**: Set by Polyquest and applied to the staking principal.
   * **Remaining Period of the Quest**: The reward is adjusted according to the remaining time in the quest.

   By offering staking rewards in $POLY, early voters are incentivized and compensated for their earlier contributions, making the timing of their vote less of a disadvantage.
3. **Reward Distribution**: The rewards are given in $POLY tokens, which not only compensate early voters but also encourage continued engagement with the platform. This approach ensures that all participants, regardless of when they vote, have a fair chance to benefit from their involvement in the prediction markets.

This staking mechanism ensures that early contributors are fairly rewarded for their participation, leveling the playing field and encouraging more consistent and active involvement in Polyquest’s prediction markets.


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