# Staking Rewards

#### <mark style="color:green;">Staking rewards are a critical component of the</mark> [<mark style="color:green;">ProfitRocket AI</mark>](https://whitepaper.profitrocket.ai/profitrocket-ai-whitepaper/welcome-to-profitrocket-ai/what-is-profitrocket-ai) <mark style="color:green;">ecosystem. They serve as an incentive mechanism to encourage token holders to "stake" or lock up their tokens in a smart contract for a predetermined period. By doing so, token holders contribute to the stability and security of the network while earning additional tokens as rewards.</mark>

### <mark style="color:yellow;">**How Staking Works**</mark>

1. &#x20;<mark style="color:orange;">**Token Locking:**</mark> Token holders can choose to stake their PRAI tokens by sending them to a designated staking smart contract.
2. &#x20;<mark style="color:orange;">**Time Commitment:**</mark> Staked tokens are locked for the 1st thirty (30) days. After 30 days tokens can be unstaked at any time.    &#x20;
3. &#x20;<mark style="color:orange;">**Reward Distribution:**</mark> Staking rewards will be distributed once per month on the same day the profit distributions are paid.
4. &#x20;<mark style="color:orange;">**Reward Calculation:**</mark> Rewards are still being worked out and we will update as soon as we have something that is fair for everyone.&#x20;
5. <mark style="color:orange;">**Claiming Rewards:**</mark> Token holders are able to unstake and withdraw any amount of tokens after the initial 30-day lock period. .

### <mark style="color:yellow;">**Benefits of Staking**</mark>

* <mark style="color:orange;">**Passive Income:**</mark> Staking provides token holders with a way to earn additional tokens without active participation.
* <mark style="color:orange;">**Network Security:**</mark> By staking tokens, holders contribute to the overall security and stability of the ProfitRocket.ai platform.
* <mark style="color:orange;">**Community Engagement:**</mark> Staking fosters a sense of community and collective ownership among token holders.

### <mark style="color:yellow;">**Risk Mitigation**</mark>

To protect against potential losses, [ProfitRocket AI ](https://whitepaper.profitrocket.ai/profitrocket-ai-whitepaper/welcome-to-profitrocket-ai/what-is-profitrocket-ai)maintains a 3% [loss prevention fund](https://whitepaper.profitrocket.ai/profitrocket-ai-whitepaper/features/loss-prevention). This fund serves as a financial cushion to offset any underperformance by the AI trading bots, ensuring that staking rewards remain consistent.

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