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Design of Liquid Staking (stCORE)

stCORE is designed to enhance the utility of the CORE token and simplify the staking process. This initiative allows token holders to maximize the potential of their assets with greater flexibility and efficiency.

Design Summary​

Liquid staking via stCORE is designed as follows:

  • A new module called Earn is introduced alongside a standard ERC-20 token, stCORE
  • Users interact with the Earn module to mint, redeem, and withdraw assets
  • The Earn module interacts with Core platform contracts such as PledgeAgent (staking) and CandidateHub
  • All value accrued by the Earn module is reflected in the stCORE token value
  • The CORE/stCORE conversion ratio is updated daily
  • Additional methods are provided to allow the system operator to rebalance and optimize staking across validators

User Perspective​

Mint​

Users can mint stCORE using CORE. At any given time during the day (UTC), the conversion ratio remains fixed. For example, if the ratio is 1:1.1, users can mint 100 stCORE using 110 CORE.

Redeem​

Users can redeem any amount of stCORE they hold. For example, if the conversion ratio is 1:1.1, users can redeem 100 stCORE to receive 110 CORE.

note

There is a redemption period of 7 days. Once users initiate a redemption, they must wait 7 days before withdrawing the CORE tokens to their wallet.

Common ERC-20 Use Cases​

stCORE is a standard ERC-20 token and can be used in all typical ERC-20 scenarios: transfers, liquidity provision on DEXs, swaps, and more.

Implementations​

The implementation of the Earn module for liquid staking can be found here.

User methods in the Earn module include:

  • mint(): Mint stCORE using CORE
  • redeem(): Redeem stCORE for CORE
  • withdraw(): Withdraw CORE to the wallet after the redemption period

Operator methods in the Earn module include:

  • afterTurnRound(): Implements autocompounding
  • rebalance(): Balances staking between the most and least staked validators
  • manualRebalance(): Manually transfers staking between validators

Validator Selection on Mint/Redeem​

Whenever a mint happens, the Earn contract delegates CORE to PledgeAgent. While when a redeem happens, the Earn contract undelegates CORE from PledgeAgent. This is implemented in such a way to keep the bookkeeping simpler.

When users mint, they must specify a validator address to stake the CORE with. This ensures equal treatment of all validator candidates, whether elected or queued. For a smoother experience, the official frontend may randomly select a validator on behalf of the user.

During redemption, the Earn contract selects validators randomly using _randomIndex(). This random index determines where in the validator list the system starts undelegating CORE until the requested amount is reached.

Keeping Validators Balanced in Stake Amounts​

Validator distribution works as follows:

  • When minting, users choose the validator
  • When redeeming, the system randomly selects validators

This system naturally balances staking across validators. However, large mint or redeem operations can disrupt this balance. To correct such imbalances, two rebalancing methods are available:

  • rebalance(): Automatically balances the validator with the most staked CORE and the one with the least, if the difference exceeds a set threshold
  • manualRebalance(): Allows the operator to manually redistribute stake between validators

stCORE/CORE Conversion Ratio Calculation​

Each round, after the turn round completes, the Earn module:

  • Collects rewards from validators
  • Re-delegates rewards to the same validators (autocompounding)
  • Moves stake from jailed/inactive validators to active ones to maximize APR

Then, the conversion ratio is recalculated using the formula:

    Amount of CORE tokens staked on PledgeAgent / stCORE.totalsupply()

Since rewards claiming only happens once per day, the conversion rate remains same for the entire day until the next turn round happens. The logics for this are implemented in the afterTurnRound() method.

Handling the Dues Protection When delegating/undelegating​

In the PledgeAgent contract (the staking contract), when users delegate the amount of CORE must >= 1.

Whereas, upon undelegation

  • The amount of CORE must >= 1 AND
  • The remaining CORE left on a validator of this address must >= 1

When handling delegate and undelegate internally, the Earn module must also follow the same restrictions.

The implementation of these requriements can be found in _undelegateWithStrategy() method.