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Protocol

1. How is asset issuance done on pSTAKE?

pSTAKE is powered by pBridge which allows issuance of multichain assets and enables transfer of value between multiple disparate blockchains such as Ethereum, Cosmos, Persistence etc. Unlike other bridges available in the blockchain ecosystem which only facilitate the creation of peg tokens, pBridge can also perform interchain transactions pertaining to PoS staking and unstaking, which are fulfilled at the protocol level on the native chain.

2. Why does pSTAKE use a dual token model over a single token model?

A dual token model solves problems around complexity and composability, enabling staking rewards to be accrued in the form of pTOKENs which can be claimed by the user at any point in time. A single token model creates additional complexities in terms of using the liquid staked representatives in certain DeFi applications; some DeFi protocols require a constant balance token mechanism. In the case of a single token model, the staking rewards are accrued in the same token, which requires the balance of the token to change with the accrual of rewards. This makes such a token unusable in most DeFi protocols.

3. How does staking/unstaking work on the pSTAKE application?

pSTAKE allows users to stake a portion or all of their deposited native PoS assets (such as ATOM), on the network through pSTAKE’s staking dashboard. Staking through pSTAKE allows users to earn network staking rewards and in return also receive ERC-20 based stkTOKENs which are 1:1 pegged with the native staked token. Unstaking is the process of exiting a staking position which reduces the user’s stkTOKEN balance by burning the number of stkTOKENs unstaked and minting an equivalent amount of pTOKENs (barring a small deviation due to fees). This process is not instantaneous and users have to wait for the completion of the unbonding period defined by the native network before they can receive pTOKENs. Find instructions for the staking / unstaking operations.

4. How does pSTAKE secure the staked assets?

The assets deposited on pSTAKE are delegated to some of the most reputed validators in the industry. These validators are a subset of the validators of the underlying PoS chain.

5. How are staking rewards accumulated? How do I view/claim staking rewards?

If you have stkATOM in your wallet, staking rewards accrue automatically during every block creation of the native (Cosmos) blockchain in the form of pATOM. You can view your unclaimed rewards in the right pane of the application, the ‘Unclaimed Rewards’ region. You can use the ‘Claim Now’ button in the Unclaimed Rewards card to claim your rewards. Users can claim rewards at any time.

6. What is the selection criterion for the validators that pSTAKE works with?

pSTAKE validators are chosen based on their track record and reliability in running stable validator nodes. These parameters include, but are not limited to, their uptime, voting power, commission rate etc. The process will initially be carried out by the pSTAKE team and will later evolve into governance-driven onboarding.

7. How does pSTAKE ensure that security of the supported network is not affected?

To achieve a high level of decentralisation, the stake is distributed not just across the largest validators on the network but also delegated to relatively smaller validators who have proven track records. At launch, the stake distribution will be even, i.e. all the safelisted validators will receive the same proportion of delegations. As the application matures, a score based delegation mechanism will be introduced, which will result in validators having to compete in terms of performance and service offering inorder to receive larger delegations compared to their peers.

8. What if any of the chosen validators goes rogue?

pBridge allows pSTAKE to add/remove validator partners based on their performance. In case any of the validators holding delegations through pSTAKE consistently acts maliciously, the protocol can remove the concerned validator and onboard a new validator in its place. Initially this will be carried out by the pSTAKE team, and this process shall become governance-driven as the application matures.

9. How does pSTAKE deal with Slashing events?

pSTAKE will use a portion of $PSTAKE, pSTAKE’s governance token, from its community fund to buy slashing cover for all its staked assets. Over time, as the protocol generates revenues that are self-sustaining, a portion of the application fees will be added to the Insurance Fund which will then be used to provide insurance against slashing. pSTAKE delegates the deposited assets across multiple safelisted validators to mitigate the risk of slashing. In case of a slashing event of one or more validators safelisted by pSTAKE, a portion or all the slashing costs are covered by pSTAKE’s Insurance Fund.

10. What are some of the initial use-cases for pSTAKE’s assets?

pSTAKE’s issued tokens can initially be used within the vast Ethereum DeFi ecosystem. This support can be broadly classified into the following categories:

  • Decentralized Exchanges: To bootstrap liquidity on DEXs, users will be incentivized in the form pSTAKE’s governance tokens allocated specifically for supplying liquidity to whitelisted pairs.
  • Borrowing/Lending: stkTOKEN holders can use these tokens as collateral in DeFi lending and borrowing applications to leverage up while having exposure to the PoS asset and earning staking rewards.
  • Other: Other use cases such as the use of vaults to maximise yields on stkTOKENs will be built by the pSTAKE team to allow stkTOKEN holders to further maximise yields.

11. Has pSTAKE protocol’s code been audited?

pSTAKE codebase is currently being audited by multiple tier 1 audit firms. The complete reports will be once the audits are completed, before the Application's launch for Cosmos mainnet.