# How staking works

TANGO holders who provide liquidity on the [80/20 Balancer pool](https://balancer.fi/pools/arbitrum/v2/0x1ed1e6fa76e3dd9ea68d1fd8c4b8626ea5648dfa0002000000000000000005cb) can stake and lock their LP tokens on Contango. In exchange of taking the risk of impermanent losses, minimized by the 8020 design, stakers are currently rewarded with 100% of the Contango trading fees.

When locking, users will be credited a veCBPT balance (CBPT as in *Contango Balancer Pool Token*) based on the amount and duration of the lock. Please note that each user’s balance of veCBPT decays linearly over time. Although veCBPT won’t have a voting mechanism at the start, we opted for the veCBPT naming because of its similarities with other [veToken designs](https://www.coingecko.com/learn/vetokens-and-vetokenomics).

For simplicity, let’s call *staker* any user with a veCBPT balance. All staking and locking actions occur on Arbitrum.

By becoming Contango stakers, users will receive the following rewards:

1. **Balancer trading fees.** While locking on Contango, users keep receiving a share of trading fees from the TANGO/wstETH pool each time a swap is made.
2. **BAL rewards from Balancer**. While locking on Contango, users keep receiving BAL incentives too.
3. **Contango protocol fees**. Initially, 100% of the protocol revenue will be distributed to stakers, who are compensated for providing liquidity on Balancer and facing the risk of impermanent loss. In the future, a portion of protocol revenue may be redirected to the Contango treasury. Fees are distributed based on each user’s share of the total veCBPT locked.

<figure><img src="/files/GiG5gvHF4NwF5K2BvV07" alt=""><figcaption></figcaption></figure>

It’s important to understand that:

* veCBPT decays linearly over time, just like other veTokens in DeFi. Although veCBPT won’t have a voting mechanism at the start, we opted for the veCBPT naming because of its similarities with other [veToken designs](https://www.coingecko.com/learn/vetokens-and-vetokenomics).
* The staking contract (the same as Balancer's) computes your share of total veCBPT during a week. On the midnight between Wednesday and Thursday at 00:00 UTC a new week starts. You need to stake for a full week to be eligible for receiving protocol fees.
* Staking duration is always rounded down to the nearest Thursday of the selected duration.
* Money sent to the [rewards contract](/app/staking/staking-apr.md#fee-collection) on week N will be claimable on week N + 1. in other words, the first week of staking is not taken into account for fees distribution, so staking on Thursday at 00:01 UTC or on the following Wednesday at 23:59 makes no difference.
* Balances at the beginning of each epoch are being  considered when distributing rewards via the staking contract, so if you wanna maximise your share, extending the lock period every Wednesday should do the trick.


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