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To start staking all you need to do is deposit your ALTR token to the Alternity staking contract. Once done you will start earning a pro rata share of the borrowing and redemption fees in LCNY and ETH.
Your ALTR stake will earn a share of the fees equal to your share of the total ALTR staked, at the instant the fee occurred.
No, you can withdraw your staked funds at any time.
You can only stake ALTR tokens. LCNY can be deposited into the Stability Pool instead.
No, staked ALTR are not used to backstop the Alternity system and are not used for governance as there is no Alternity governance.