To start staking all you need to do is deposit your TEDDY token to the Teddy Cash staking contract. Once done you will start earning a pro rata share of the borrowing and redemption fees in TSD and AVAX.
Your TEDDY stake will earn a share of the fees equal to your share of the total TEDDY staked, at the instant the fee occurred.
No, you can withdraw your staked funds at any time.
No, staked TEDDY are not used to backstop the Teddy Cash system and are not used for governance as there is no Teddy Cash governance.