Liquid Staking
Liquid staking allows users to stake their token and receive the equivalent representation of a staked token. These tokens are yield bearing and grow in value as they continue to accrue the reward. It also enable users to maintain flexibility and accessibility to their assets while still earning rewards.
In the context of Restake, the platform enhances the liquid staking experience by providing users with a streamlined process. When users stake their ETH, Restake issues hETH (Hashstack ETH) tokens based on an exchange rate (hETH-ETH). This hETH token acts as a secure representation of their staked ETH within the system and is backed by StaderLab’s ETHx and Lido Finance’s wstETH token. It's noteworthy that Restake implements a predefined percentage as a staking fee in ETH upon user deposits.
The staking mechanism within Restake is governed by three pivotal criteria:
Stake Threshold: Minimum ETH required to close/dispatch an stake batch to L1
Number of Stakers: The count of stakers in the current batch.
Time Elapsed: The duration since the last stake batch was sent to L1.
Batching
Batching is a critical step in the liquid staking process in Restake, where individual user-staked ETHs are systematically grouped together to create a stake batch. This batch is then seamlessly transmitted to Layer 1 (L1) and actively staked on platforms such as StaderLab or Lido Finance. The bridging process from Layer 2 (L2) to L1 takes a duration of 10 to 16 hours, which is the time Starknet takes to settle the transaction in Layer 1, ensuring the secure and efficient transfer of staked assets across different layers of the blockchain. We utilizes Stakrnet native L1 <-> L2 messaging and don't use any 3rd party messaging services.
Prior to dispatching the stake batch to L1, Restake employs a thoughtful approach by setting aside a predetermined percentage of the total amount as reserves in the vault. This is necessary in establishing a reserves vault. The reserved funds are strategically earmarked to address and finalize immediate redeem requests, providing a layer of security and liquidity to users engaging with the Restake protocol. This ensures that the system is well-prepared to fulfill the immediate redemption needs, enhancing the overall reliability and responsiveness of the liquid staking process on the Restake platform.
Additionally, Restake adopts an approach to determine the optimal location for staking assets. This decision is based thorough analysis of past transactions, benefits, and various parameters. The protocol evaluates these factors to identify the most suitable partnered protocol for the staking process. This careful consideration ensures that staked assets are allocated to the protocol that maximizes benefits and aligns with the overall goals of the user.
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