Unstaking is the process of exiting a current staking position, which reduces the user’s stkTOKEN balance and increases their pTOKEN balance by exactly the same amount (barring a small deviation due to fees).
Unstaking on most Proof-of-Stake networks takes a considerable amount of time (anywhere between 7 to 30 days, depending on the specific network). Most networks implement a 21-28 day unbonding period. This is not ideal for stakers and is a user experience problem that needs to be addressed. To bypass this restriction, pSTAKE allows for instant redemption of pTOKENs from stkTOKENs by charging a fee from stkTOKEN holders to exit their staking positions.
Once a user sends an unstaking transaction, the following process takes place:
- stkTOKENs are locked up (cannot be transferred)
- Native tokens are unstaked on the network
- stkTOKENs are burned
- pTOKENs are minted and locked up for the duration of the unbonding period
- pTOKENs are transferred to the unstaking user’s wallet at the end of the network’s unbonding period