# Staking Mechanics

## Tax Rates

Staking uses a **self-assessed tax** mechanism (Harberger Tax). You choose what yearly rate you're willing to pay. This creates a continuous auction for staking slots.

### Rate Tiers

There are 30 discrete tax rates (percentages are yearly):

```
1%, 3%, 5%, 8%, 12%, 18%, 24%, 30%, 40%, 50%,
60%, 80%, 100%, 130%, 180%, 250%, 320%, 420%, 540%, 700%,
920%, 1200%, 1600%, 2000%, 2600%, 3400%, 4400%, 5700%, 7500%, 9700%
```

Rates are discrete (not continuous) to prevent micro-increment griefing.

### Tax Calculation

Tax accrues continuously from the moment you stake:

```
tax_owed = (staked_amount × tax_rate × time_held) / (365 days × 100)
```

Tax is paid when you:
- Unstake (deducted from payout)
- Get snatched (deducted from compensation)
- Manually pay via the dashboard

## Snatching (Position Challenges)

Anyone can take your staking slots by committing to a higher tax rate.

### Rules
1. **Higher rate required**: The challenger must use a strictly higher tax rate tier
2. **3-day minimum hold**: Positions are protected for 72 hours after creation
3. **Full compensation**: The snatched owner receives market value of their position minus accrued tax
4. **Discrete tiers only**: You can't snatch by increasing the rate by 0.01% — you must jump to the next tier

### What the snatched owner receives

```
payout = (shares / total_shares) × current_total_supply - tax_owed
```

The payout reflects the current token price, not the entry price. If the protocol grew, you get more back than you put in.

## Staking Pool

The staking pool holds 20% of all KRK supply. When new tokens are minted (from buys), stakers receive a proportional share. When tokens are burned (from sells), the pool shrinks proportionally.

### Owner Slots

- Total: 20,000 slots (representing 20% of supply)
- Your slots = your percentage × 20,000
- 1,000 slots = 1% of the staking pool

### Minimum Stake

To prevent fragmentation, there's a minimum stake:

```
min_stake = total_supply / 3000
```

At ~1.2M total supply, this is approximately 399 KRK.

## Adjusting Your Rate

You can change your tax rate on an existing position:
- **Increasing**: Takes effect immediately, extends snatch protection
- **Decreasing**: Takes effect after a delay to prevent gaming

## Strategy Guide

| Goal | Recommended Rate | Why |
|------|-----------------|-----|
| Long-term earning | Low (1-8%) | Cheap to hold, accept challenge risk |
| Defensive holding | Medium (18-40%) | Balance of cost and protection |
| Aggressive accumulation | High (60%+) | Hard to challenge, but expensive |
| Short-term flip | Lowest available | Minimize holding cost |
