# Staking Mechanisms

## Staking Mechanisms

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1. **User Deposits Staked Asset (e.g., ETH) and Receives LSDs:**
   * Users initiate the staking process by depositing their staked assets (e.g., ETH) into the staking contract on Arbitrum.
   * Upon deposit, users receive Liquidity-Sensitive Derivatives (LSDs) representing their staked assets. These LSDs are minted by the staking contract on Arbitrum.
2. **Rollup to Ethereum Mainnet:**
   * Multiple staking contracts on Arbitrum aggregate transaction data and submit proofs to the Arbitrum Rollup.
   * The Arbitrum Rollup compresses and optimizes the transaction data and submits it to the Ethereum mainnet.
3. **Proof-of-Stake (PoS) on Ethereum Mainnet:**
   * Validators on the Ethereum mainnet verify the proofs submitted by Arbitrum, ensuring the correctness of off-chain computations.
   * Validated transactions are processed on the Ethereum mainnet, including the issuance of staked assets (e.g., ETH) into the deposit contract on Ethereum.
4. **Withdraw (Once Available):**
   * Once the staking period is complete or withdrawal conditions are met, users can initiate a withdrawal transaction.
   * The withdrawal process involves burning the LSDs, and users receive their staked assets (e.g., ETH) along with accrued interest.

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