---
description: What is xMagik?
---

# xMagik Staking

xMagik is a utility token for the Magik Finance protocol. This allows you to stake Magik to earn additional Magik as the redemption ratio between Magik and xMagik increases. Holding xMagik in your wallet will enable you to vote on decisions that will shape the future of Magik Finance. The more xMagik you hold, the more power your vote will carry.

## Why xMagik?

xMagik will serve to benefit the protocol and its users in many ways. Single sided staking will allow users to stake their Magik to earn interest without any risk of impermanent loss. We believe that this incentive will also increase buy pressure on the Magik token as investors looking to earn a yield will no longer have to pair Magik with Fantom, leaving them with more investable cash to flow directly into Magik purchases. Having more Magik staked will decrease the selling pressure on the Magik token also, as well as incentivise users to maintain the peg as xMagik rewards will increase based on expansionary periods. An expansionary period occurs when TWAP exceeds a peg ratio of 1:1.01 moving from the previous epoch into the current epoch. Expansionary periods will continue for as long as the ratio of 1:1.01 is maintained or exceeded. The Dungeon is activated and Magik rewards are generated.

## How Does xMagik Work?

Magik can be exchanged to and from xMagik at any time on the xMagik page. When xMagik was launched, the ratio of Magik to xMagik was exactly 1.0. At a ratio of 1.0, if you deposited 100 Magik, you would receive 100 xMagik in return. Similarly, if you redeemed 100 xMagik, you would receive 100 Magik back. xMagik is only minted when Magik is deposited into the contract. Any time Magik is sent to the xMagik smart contract as rewards, it will increase the ratio of Magik to xMagik, generating a yield for all xMagik holders.

Each time rewards are sent to xMagik contract, the APR will increase along with the exchange rate. The exchange rate will never go down. The APR increase is based on how many xMagik are in circulation along with how many rewards are in the contract and the amount transferred from the treasury. The APR is based upon protocol performance. Whenever the price of Magik is over PEG, the difference will be sent to xMagik contract, thus increasing APR's. The initial APR upon launch will be low as the exchange rate will be 1:1. Rewards will be sent randomly thus increasing the APR.&#x20;

## How APR's Are Calculated

### Daily APR

$$
APR_{daily}=\frac{ExchangeRatePercent}{Date_{now} - Date_{start}}
$$

where

* `ExchangeRatePercent` is current `XMAGIK` to `MAGIK` ratio represented in percent form $$ExchangeRatePercent=\frac{XMAGIK}{MAGIK}*100 - 100$$\

* $$Date_{now}$$  is current date
* $$Date_{start}$$ is the date of `XMagik` release it is constant and equals $$Date_{now}=9\ Feb\ 2022$$

### Yearly APR

$$
APR_{yearly}=APR_{daily}*365
$$

## Example:&#x20;

Afrishib deposits 10,000 Magik into xMagik staking, when the exchange is 1.0. Afrishib receives 10,000 xMagik in return for his 10,000 Magik. Now he is holding. Other users stake a combined 90,000 additional Magik, making the total staked amount of Magik 100,000. Now we have 100,000 xMagik in total, and 100,000 Magik in the xMagik staking contract. 10,000 Magik are now sent to the xMagik reward contract, making the total amount of Magik in the contract 110,000 now (learn where Magik rewards come from below). Since the total amount of xMagik is still 100,000, but the Magik shared among stakers is 110,000, the exchange rate (ratio) will now be 1.1 Magik per xMagik. Afrishib can now redeem his 10,000 xMagik to receive 11,000 Magik in return. Any new Magik deposits at this point will receive xMagik at the current exchange rate of 1 xMagik per 1.1 Magik (as per this example).

## How Does xMagik Get Additional Magik?

Magik rewards are generate during expansionary periods and sent to the xMagik rewards pool for the xMagik holders. Yield is generated according to protocol performance.&#x20;
