# Fuel Cells

## What are Fuel Cells?

Fuel Cells are vaults that you can stake your H2 tokens in for set durations (activation cycles), and start earning H2 tokens right after the deposit. 

### Three layers of rewards:

1. **With the tokenomics in the form of deposit weight**

There are currently 4 lengths of maturity for Fuel Cells with their corresponding multiplier shown below:

| Activation Cycles | Multiplier |
| ----------------- | ---------- |
| 3 months          | 1x         |
| 9 months          | 4x         |
| 24 months         | 10x        |
| 48 months         | 20x        |

The longer the cycle you choose to deposit your $H2 tokens in, the greater the multiplier and thus the greater the rewards you will receive. As a representation of the rewards you are entitled to, $HYDRO tokens will be minted to your wallet. $HYDRO tokens are not transferable and will be burned when you withdraw $H2 tokens from your Fuel Cell positions.

You can start earning rewards as soon as you activate your Fuel Cell positions, and claim the rewards at any time.

2. **With the $H2 token buyback mechanism**

When you deposit your $H2 tokens into Fuel Cells, a portion of our platform's earnings is used to purchase $H2 tokens periodically from the open market. The purchased tokens are then shared between users with Fuel Cell positions, and labeled as Extra H2 when you withdraw your $H2 tokens.

![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXeN_7Yd3TN5h0pwpVlm_ZQxxKqTWvqus7ANWaCf2q7d2dY6sCuN1wkVVl5qn0yYBjBWTgZjH0GEzqPmDgp0qQfoaiBFDXyEb0a27ULf8ud4YvonDDVYf8VP_wfVrhinPAimMPi_XHga47H2Wwiliu7Fvx8?key=zpJPjakUSPOdrvYl-S9Qqw)

3. **Early withdrawal penalty from other depositors**

For those who wish to withdraw their funds early, they will be subject to a penalty. The penalty is paid in $H2 tokens and is added to a separate reward pool. This reward pool is distributed to other users based on the amount of tokens they have locked up in their Fuel Cell positions.

*Note: The APRs will vary based on Fuel Cell utilization. In general, the earlier and longer you lock your $H2 tokens, the higher the APR. The APR will lower as more tokens are locked across Fuel Cells.*


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