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Staking Mechanisms

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Last updated 1 year ago

Staking Mechanisms

  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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