# Single Sided Staking

Staking enables you to participate in the protocol's Safety Module by exchanging $PRSM for $xPRSM.

### The xPRSM Model

xPRSM is a liquid receipt token that represents your share of the staking pool. Its value is derived from a dynamic exchange rate rather than manual distributions.

* No Claiming: You do not need to manually manage or claim tokens.
* Ratio Mechanics: As additional PRSM flows into the xPRSM Smart Contract, the total amount of PRSM backing each xPRSM token increases.
* Result: The conversion rate rises over time.

### Value Accrual Mechanics

The increase in the PRSM-to-xPRSM ratio is driven by token inflows from two specific sources.

#### Phase 1: Bootstrapping (Launch)

Initially, the staking pool balance increases via Community Incentives (Emissions).

* New tokens are emitted directly into the staking contract.
* This increases the total PRSM reserves in the pool without minting new xPRSM, causing the exchange rate to rise.

#### Phase 2: Protocol Revenue (Maturity)

As the protocol matures, emissions are tapered off and replaced by Protocol Revenue.

* The protocol uses the settlement fee to buy back PRSM on the open market.
* These purchased tokens are deposited into the staking contract.
* Effect: This mechanism ensures that protocol activity directly increases the amount of PRSM backing the circulating xPRSM supply.

### How to Stake

1. Stake: Deposit PRSM into the staking contract.
2. Receive: You instantly mint xPRSM at the current exchange rate.
3. Hold: As tokens are deposited into the pool via buybacks & emissions, the redemption value of your xPRSM increases relative to PRSM.
4. Unstake: Burn xPRSM to redeem your PRSM at the current conversion rate.


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