🌀Staking Mechanisms

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.