# Staking and Stablecoin

Due to the support of a **floor price**, LUAUSD forms a mechanism of over-collateralization, where users can mint LUAUSD by staking LUA. 

The staking can be chosen as either no vesting or with vesting, with longer lock-up periods yielding higher returns. \
Additionally, the protocol provides a mechanism for early redemption, where a **penalty(ranges from 0\~30%)** based on the time until expiration is charged and allocated to the protocol's treasury.

Staking LUA rewards LUAB and LUAG PTS, with rewards divided into **base** and **boost** parts. \
Staking LUA by default earns base rewards, while boost rewards are based on the proportion of veLUA held; the closer to the expiration time, the fewer **veLUA** are held, until the quantity of veLUA reaches zero at the moment of expiration.

Users can increase their veLUA by extending the staking duration or increasing the amount of LUA staked, thereby gaining a competitive advantage in earning rewards.<br>

<figure><img src="/files/Mw0G9zJprij5fLD20u3T" alt="" width="375"><figcaption></figcaption></figure>

<figure><img src="/files/o8rnpbMOney4kDQSMjEP" alt="" width="375"><figcaption></figcaption></figure>


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