FAQs
Liquid Staking
What are Liquid Staked Tokens (LSTs)?
Liquid Staked Tokens (LSTs) represent ownership of staked assets, typically cryptocurrencies like Monad (MON). LSTs let users earn staking rewards while keeping their tokens liquid—meaning they can still use these tokens across the decentralized finance (DeFi) ecosystem.
What are the benefits of LSTs compared to traditional staking?
LSTs offer three key advantages over traditional staking:
Liquidity: Unlike traditional staking where tokens are locked up, LSTs let users freely transfer and use their tokens while earning staking rewards.
DeFi Integration: Users can stake their tokens and participate in DeFi activities like lending and trading at the same time, maximizing potential returns across platforms.
Capital Efficiency: Users can put their staked assets to work as collateral for borrowing or providing liquidity, making their capital work harder.
How sMON earns yield
sMON earns yield because it represents a share of the protocol’s pool of staked MON. When MON is staked with validators on the Monad blockchain, the staking rewards earned are added back to this pool. As the pool grows relative to the total supply of sMON, the value of each sMON increases. Additionally, sMON can be used in DeFi to earn extra yield beyond the staking rewards.
Why is sMON not 1 MON?
sMON represents staked MON and earns yield over time, which causes its value to increase relative to MON. The protocol uses an Exchange Rate to reflect the difference in supply, as MON staking rewards are added to the total pool of staked MON. This means that holding sMON gives users access to both their initial MON and the yield earned
What do we mean by Composable Yield?
Composable Yield means that sMON tokens, while earning staking rewards, can also be used across various DeFi protocols for activities like trading, lending, and gaming. Because sMON is fungible and fully backed by staked MON, it retains its value while being integrated into other protocols, allowing users to benefit from both staking rewards and additional DeFi returns. Holders can redeem sMON for MON at any time (subject to the network’s built-in redemption delay) or swap them for MON on a DEX.
Can I unstake my MON at any time?
Yes, you can unstake your MON at any time, but there is a built-in redemption delay period that you need to be aware of. This delay is a security feature designed to protect the network. During this period, your unstaking request is processed, and once completed, you'll receive your MON tokens back. Alternatively, if you need immediate liquidity, you can trade your sMON directly on supported DEXs without waiting for the unstaking period.
Governance
Governance tokens vs. DAO NFTs
Kintsu’s governance system uses both KSU tokens and DAO NFTs. Users stake their KSU tokens into a DAO NFT, which grants them the ability to participate in governance. DAO NFTs add a layer of security against double voting and serve as a mechanism for delegation in representative-based voting. This model ensures that governance remains decentralized, secure, and flexible for participants.
How governance delegation works
If you hold KSU tokens but don’t want to vote directly on every proposal, you can delegate your voting power to someone else who will vote on your behalf. You’ll still own your KSU tokens and keep earning rewards, while the representative you choose manages your votes. This is a great way to stay involved in governance without needing to actively participate in every decision. Representatives may also earn a small portion of the rewards as an incentive for acting on behalf of delegators.
How proposals work
If you want to create a proposal, you’ll need to have a minimum amount of KSU staked in your DAO NFT. Once you submit a proposal, other participants vote on it using their staked KSU. If the proposal reaches the required approval threshold, it gets implemented. Proposals can cover a wide range of topics, from protocol upgrades to fee changes, allowing the community to help shape the future of the protocol.
Validators
Becoming a validator
To become a validator, you’ll need to deposit both KSU and MON as collateral. Once you’ve done that, you can permissionlessly add yourself to the validator registry. After being added, KSU holders can allocate their registry voting weight to you. As they do, the protocol will start delegating stake to you based on the amount of voting weight you receive. This process ensures that only validators trusted by the community receive significant stake, helping maintain network security and decentralization.
How are validators held accountable?
Validators are held accountable through a combination of economic incentives, governance oversight, and swift action by the Governance Council. To join the validator registry, validators must deposit KSU and MON as collateral, which can be slashed (partially or fully seized) if they act maliciously or fail to meet performance standards. Governance participants can also monitor validators and adjust their voting weight allocation if a validator underperforms or violates protocol rules. Additionally, the Governance Council has the authority to quickly disable a bad-acting validator to protect the network, ensuring the protocol remains secure and reliable.
Offboarding a validator
You can offboard a validator intentionally. When you do this, the Vault will start to direct stake away from your validator as over time as tokens are staked and unstaked from the Vault. Once your validator reaches 0 stake allocation, you can remove it and redeem the collateral you put up for it.
If you are honorably discharged as a validator by the Governance council, the same process applies. However, if you are dishonorably discharged by the Governance Council, you will forfeit the collateral.
Community
How can I get involved with Kintsu?
There are several ways to get involved with Kintsu:
Stake MON: Participate in liquid staking by depositing your MON tokens to earn staking rewards while maintaining liquidity through sMON tokens. You can then use your sMON across various DeFi protocols for additional yield opportunities.
Participate in governance: Get involved in shaping the future of Kintsu by staking KSU tokens, voting on proposals, or delegating your voting power to trusted representatives. You can also create your own proposals once you meet the minimum staking requirement.
Become a Validator: Help secure the network by running a validator node. You'll need to deposit KSU and MON as collateral, and maintain high performance standards to earn rewards and build trust within the community.
Join the Community: Engage with the Kintsu community by participating in discussions, sharing ideas, and providing feedback. Connect with us through our official communication channels and stay up to date with the latest updates and announcements.
Contribute to Development: If you are a developer or have technical skills, you can contribute to the development of the Kintsu protocol. Check out our GitHub repository and explore opportunities to contribute code, provide feedback, or suggest improvements.
How can I report issues with the Kintsu platform?
Kintsu welcomes feedback and encourages community contributions to improve the platform. Join the official Kintsu community forums and participate in discussions.
How can I stay updated with Kintsu's latest developments?
To stay informed about the latest news, updates, and developments from Kintsu, we recommend:
Following our official social media channels, such as Twitter, Discord, and Medium
Tracking our Gitbook
Checking our Documentation, which is regularly updated.
Security
Is Kintsu open-source?
Yes, Kintsu is an open-source project. We believe in the power of community collaboration and transparency. You can find our codebase and relevant documentation on our GitHub repository.
While staking and using LSTs can provide various benefits, it's important to be aware of the potential risks involved. Some common risks include:
Volatility: The value of staked assets and LSTs can be subject to price fluctuations, which may result in gains or losses.
Security: As with any blockchain-based activity, there are inherent security risks. It's crucial to use secure wallets and follow best practices to protect your funds.
Smart Contract Risks: LSTs rely on smart contracts, and vulnerabilities or coding errors in these contracts can lead to financial losses. However, thorough security audits and best development practices mitigate these risks.
Is Kintsu's code audited for security?
Yes, ensuring the security of our users' funds and the integrity of our protocol is of utmost importance to us. Kintsu used pre-audited code from smart contract libraries such as Open Zeppelin. Additionally, the code will be open-sourced so the community is able to both audit and contribute.
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