Tranquil stONE (HRC20 token) is a liquid staking derivative, which allows users to stake their ONE tokens with validators, helping secure the network and earn staking rewards. Unlike traditional staking, stONE can be used in DeFi dapps such as Tranquil Lending.
The contract address is
DeFi use cases of Tranquil stONE include:
- Depositing it as collateral on Tranquil Lending to borrow other assets
- Providing liquidity for the stONE-ONE LP, earning LP fees as well as incentives
- Swapping stONE for ONE using the LP to skip the undelegation wait time if funds are needed urgently
In addition to being more liquid and usable in DeFi, Tranquil stONE is also better than traditional staking:
- Auto-compounding of staking rewards periodically to earn higher APY.
- In traditional staking, you will have to manually collect and re-delegated rewards for compounding
- More tax efficient since taxable event only occurs during unstaking
- In traditional staking, you create a taxable event every time you collect rewards
Here is the main flow for staking and unstaking
Staking: Users stake their ONE token with the LiquidStaking smart contract and receive stONE tokens as receipt, representing their staking deposit. The smart contract directly delegates the deposited ONE tokens to a whitelisted validator.
Unstaking: Users redeem / burn their stONE token and the smart contract will undelegate a corresponding amount of ONE from a validator. After the undelegation delay of 7-9 epochs, the user can withdraw the undelegated amount.
Rewards: The stONE token represents a share of the total amount of ONEs under control of the protocol. The smart contract will collect and compound rewards periodically, which will increase the total ONEs under its control. This will update the exchangeRate, which determines the value of ONE to stONE.
The stONE implementation takes the following design decisions:
Non-Rebase Index - To be compatible with DeFi, stONE is a non-rebase token, with collected rewards being reflected in an increasing exchange rate between stONE and ONE. This is similar to wrapped stETH.
Trusteless - The implementation of stONE is completely trustless, there are no trusted relay nodes, and every happens onchain. The contract directly delegates to one of the whitelisted validators.
How do I collect my staking rewards?
With stONE, you do not manually collect staking rewards. The protocol will automatically collected and compound it. The rewards will be reflected in the stONE exchange rate. Initially the exchange rate will be 1-to-1. As the protocol collects rewards, this exchange rate will gradually increase, so you can redeem stONE for more ONEs than you deposited.
Which validators do you use and how are they selected?
The validators used by stONE are all stored on-chain in the smart contract. The selection logic for selecting a validator also occurs on-chain. Each validator will have an allocation score that determines how much ONEs will be delegated to it.
Validators should meet the following criteria:
- 5% commission rate or less
- Support multiple BLS keys
- Over 99% uptime and election rate
What are the protocol fees for using stONE?
Tranquil stONE will collect a protocol fee in addition to validator commission fee for collected rewards. Another portion of the protocol fee will be used to create a reserve fund to pay for the gas costs of staking transactions and insurance against slashing events.