FAQ
What is Liquid Staking Protocol (LSP)?
LSP allows users to earn staking rewards without locking $flow
tokens or running node softwares. Users can deposit $flow
tokens and receive transferrable $stFlow
tokens in return. Liquid staking combines the benefits of staking (earning rewards) and brings liquidity, as well as additional possibilities to increase your assets or hedge your positions by participating in Flowโs DeFi ecosystem.
Furthermore, LSP stakes these tokens to a set of different node providers for the sake of decentralization, preventing any single point of failure, diversifying staking risks and stabilizing liquid staking apr.
What is $stFlow
token and how can I get it?
$stFlow
token and how can I get it?stFlow
is a fungible token on Flow blockchain that represents a share of the total $flow
tokens staked through LSP, along with any generated staking rewards.
There is no waiting time for receiving stFlow
tokens - youโll receive the newly minted stFlow
as soon as you delegate to LSP. You can also purchase $stFlow
from the open market (e.g. DEX) directly.
Since the delegated $flow
tokens accrue staking rewards, $stFlow
is interest-bearing - meaning that its price grows on each flowchain's epoch advancement.
How do I claim my staking rewards?
The simple answer is: you donโt have to.
As explained above, stFlow
represents both your staking amount and the rewards you earn on each epoch, so its price grows over time. The same amount of $stFlow
entitles you to withdraw more Flow after each epoch.
Can I unstake at any time?
Yes. You have 2 options:
Directly swap
$stFlow
back to$flow
on the DEX, and youโll get$flow
tokens back immediately. Depending on the liquidity condition ofstFlow <> Flow
pair on DEX, sometimes it has better rates than normal unstaking.Perform an unstaking request by burning your
$stFlow
tokens for a redemption ticket, and youโll find both your pending and matured unstaking requests in the'Unstaking'
tab. Just like traditional unstaking, it takes 1~2 epochs, and after itโs matured you can come back to withdraw.
How long after (normal) unstaking can I withdraw my Flow?
Depending on the time of your unstaking request, the waiting period is 1 ~ 2 epochs (1 epoch ~= 7 days). After that, you will be able to withdraw your claimable amount.
Source: https://developers.flow.com/nodes/staking/schedule
What is Migrate? How to benefit from LSP if Iโve currently delegated to a node?
โMigrateโ is a feature specifically built for existing delegators. So if youโve delegated to a node already, you do not need to unstake from the node, but instead you can โmigrateโ the staked position to LSP and receive $stFlow
immediately in 1 transaction.
If you donโt have any staked position, the card will be empty; otherwise the Migrate
tab will be red dotted to give you a notice. Some notes here:
Any unclaimed rewards or unstaked tokens will be migrated along with staked and newly commited tokens, in 1 click.
Any new unstake request will be canceled and then the position will be migrated, all in 1 click.
Thereโre also certain restrictions on migratable staked positions though:
If the staked position has any ongoing unstaking request, it is temporarily non-migratable: youโll have to wait for 1 epoch until the unstaking request becomes โunstakedโ and then come back to the '
Migrate'
tab.If the staked position has used locked account to handle staking (for example: Blocto), you have to unstake from locked account first. Check
Unstake & Migrate
's case in the user guidance for more info.If you're staking through Flow Port, you should be good to go and migratable most of the case. (Unless you've staked any unvested tokens, see explanation in the end of user guidance)
Why should I use LSP other than traditional staking?
There are many reasons, just to name a few:
Instant liquidity: You get instant liquidity (transferrable
$stFlow
token) while still earning staking rewards. Use$stFlow
to participate in Flowโs DeFi ecosystem to earn more.Auto-compound: Thereโs no need to manually claim staking rewards anymore. With LSP, the staking rewards are automatically claimed and restaked in the beginning of each new epoch (and thus auto-compounding!).
Option of instant unstaking: As long as thereโs enough liquidity on DEX, you can always choose to redeem
$stFlow
back to$flow
immediately by swapping. Sometimes DEX has better rates than normal unstaking.Composability for more yield opportunity: With $stFlow, it unlocks broader yield opportunities. You can supply
$stFlow
on the lending market to earn double (or even triple) rewards. You can borrow more$flow
to mint$stFlow
with$stFlow
as collaterals. You can earn trading fees (plus LP rewards) by providing liquidity to thestFlow-Flow
pair, which has almost zero impermanent loss. And more opportunities waiting to be discovered.Ease of use and risk diversification:
In traditional staking, users have to search by themselves and manually specify which node theyโd like to delegate to. They also have to manually claim rewards, periodically check delegated node status and to perform unstake then stake if necessary.
As a comparison, with LSP one can start staking with a single click. Strategy bots will handle delegate distribution, auto-compound, slashed nodes detection, redelegation, according to different strategies (e.g.
nodeCut
,uptime
, etc).LSP benefits the decentralization of the whole network as well as some small node operators. LSP splits delegates among all eligible nodes other than delegating to a single, self-operated node.
Has LSP been audited, and what are the risks involved?
Yes, and you can find the audit report in audits.
We put security as top priority in developing in the DeFi space, and besides security audits, weโve also set up a bug bounty program for security researchers and white hats to help audit and protect LSP. The bounty program is also publicly accessible here.
Which nodes are receiving delegates from LSP?
We do not spin up our own nodes, so the delegated tokens are not staked to us.
We adopt the practice to stay transparent and reach progressive decentralization over time. The end goal is to let token holders (in future weโll release the token) vote and distribute delegates in a weighted manner. However, right now thereโs an allowlist of nodes, only nodes within the allowlist are eligible to receive delegates from LSP.
Nodes in the list are chosen based on reputation, former experiences in maintaining node infrastructure, partnership, and so on. Current nodelist included nodes running by below entities:
*A list of well-known nodes can be found here. If youโre a node operator and would like to join the node program, please fill in this form and tell us on discord / twitter / email.
What is the current Delegation Strategy?
There are 4 types of nodes that are eligible to receive staking rewards: Execution
, Consensus
, Collection
, and Verification
. Right now all of them are applied with the same rewards weight, but it may change in the future according to Flowโs plan. Also currently nodes cannot customize the nodeCut
parameter, as itโs fixed to 8%
, however, this is also updatable in future.
So for now, the delegation strategy is simple enough: it will try to evenly distribute delegates to eligible nodes. But in the future once the node weight and node cut feature have been upgraded, the delegation strategy would also be upgraded accordingly, including but not limited to metrics like self-bonded amount, uptime, slashing history, etc.
What fees does LSP charge?
The fee parameter is configurable, and right now there is a 5% fee applied on usersโ staking rewards (itโs only applied on generated staking rewards, not on staked principal). As a comparison with Lido, which charges 10% on ETH staking rewards, the fee is still much lower and is used to continuously fund operations, marketing expenses, stFlow <> Flow
LP rewards, insurance funds, auditing expenses, and future development, etc., to boost adoption and build a network effect of $stFlow
.
More questions?
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