Staking is the primary value accrual strategy of Paladin DAO. Stakers stake their Pal tokens on to earn rebase rewards. The rebase rewards come from the proceed from bond sales, and can vary based on the number of Pal staked in the protocol and the reward rate set by monetary policy.
Staking is a passive, long-term strategy. The increase in your stake of Pal translates into a constantly falling cost basis converging on zero. This means even if the market price of Pal drops below your initial purchase price, given a long enough staking period, the increase in your staked Pal balance should eventually outpace the fall in price.
When you stake, you lock Pal and receive an equal amount of sPal. Your sPal balance rebases up automatically at the end of every epoch. sPal is transferable and therefore composable with other DeFi protocols.
When you unstake, you burn sPal and receive an equal amount of Pal tokens. Unstaking means the user will forfeit the upcoming rebase reward. Note that the forfeited reward is only applicable to the unstaked amount; the remaining staked Pal (if any) will continue to receive rebase rewards.