# Staking Engine

The Zenko Staking Engine is the protocol’s decentralized yield and liquidity coordination system. It enables users to lock $ZENKO tokens into non-custodial vaults to earn rewards and accumulate $ZEN — a non-transferable system token used to unlock ZENKO, pace liquidity release, and reinforce validator security.

This system aligns long-term participation with network security and tokenomic sustainability, ensuring fair reward distribution while preventing extractive, short-term farming behavior.

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#### Key Properties

* **Non-Custodial & On-Chain**: All staking logic is implemented via smart contracts, with no third-party fund custody.
* **Dual-Token Yield Model**: Users earn $ZENKO (transferable) and $ZEN (non-transferable) in tandem.
* **Liquidity Pacing**: Unlocked ZENKO requires $ZEN consumption, enforcing a time-weighted unlock schedule.
* **Validator Influence**: Staked ZENKO contributes to validator strength in Proof-of-Stake operations.

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#### Vault Lock Options

Zenko supports three staking vaults with different lock durations and reward profiles:

| Lock Duration | Monthly ROI | Annual ROI |
| ------------- | ----------- | ---------- |
| 6 Months      | 15%         | 180%       |
| 9 Months      | 20%         | 240%       |
| 12 Months     | 25%         | 300%       |

> **Note:** Actual yield may vary depending on protocol revenue inflow, network activity, and vault utilization. Rewards are distributed continuously and transparently on-chain.

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#### Reward Mechanics

Stakers receive rewards in two forms:

* **ZENKO**: Transferable token, subject to unlock via $ZEN
* **ZEN**: Non-transferable utility token used for unlocking ZENKO, pacing liquidity, and contributing to validator security

The longer the stake duration, the higher the ZEN accrual rate and governance weight. ZEN functions as both a **liquidity throttle** and **network trust signal**.

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#### Compounding and Strategic Positioning

Stakers may choose to:

* **Claim & Restake**: Compound rewards into the same or longer-duration vaults
* **Accumulate ZEN**: Allow ZEN to accrue over time to maximize future unlock capacity
* **Use Unlock Simulator**: Zenko Dashboard provides modeling tools to simulate compounding ROI and ZEN consumption ratios

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#### Exit Logic & Liquidity Control

To unlock staked ZENKO:

* Users must **burn ZEN** in proportion to the ZENKO they wish to extract
* Each vault has a **cooldown period** to prevent flash exits
* **Early exits** (before lock maturity) may incur additional ZEN burn penalties or forfeiture of pending rewards

All vault logic is executed through audited smart contracts, ensuring deterministic behavior and verifiability.