Staking and Unstaking with Kintsu

How to Stake, Un-stake, and earn yield with Kintsu

Staking with Kintsu

When a user stakes tokens with the Kintsu protocol, the experience is as follows:

1. User initiates a stake transaction with the Vault contract, in which they submit MON tokens to the Vault.

2. User receives sTokens from the Vault. The amount received depends on the current Redemption Ratio, which can be seen on the Kintsu website beforehand.

For example, if the current Redemption Ratio is 1.1 MON for every sMON, then a user who stakes 11 MON will receive 10 sMON from the Vault.

sMON tokens are fungible, and can be traded on DEXes or used as a proxy for MON in other activities on the blockchain, such as DeFi applications, Gaming, NFTs, and more.

When MON tokens are staked with Kintsu, they are transferred to the Vault contract. The Vault handles the rest of the process behind the scenes, including:

1. generating the new sMON tokens and transferring them to the user, and

2. making sure the user's MON tokens make it downstream to Validators for staking on the network.

For more technical information on how staking works behind the scenes, see Kintsu's docs on the Staking Mechanism.

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Unstaking with Kintsu

Users can redeem MON tokens from the Vault in exchange for submitting sMON tokens to the Vault. The number of Gas Tokens received depends on the Redemption Ratio at that time, with respect to the number of sMON they submit for redemption.

For example, if the current Redemption Ratio is 1.1 MON for every sMON, then a user who submits 10 sMON will receive 11 MON from the Vault.

It's important to note that when using Liquid Staking, there will be a delay between the time that a user requests to unstake MON and when they actually receive the MON. There are a few reasons for this, including native unstaking delays built into, and enforced by, the blockchain itself. The user experience is as follows:

1. Initiation: User executes an unstaking request by making a requestUnlock call to the Vault. When they call this function, they specify either how many sMON they'd like to submit, or how many MON they'd like to receive.

2. Cooldown Period: Once the unbonding request is sent to the Validators, the users must wait for the Cooldown Period. This is enforced by the blockchain itself, and there is no way around it.

3. Redemption: Once the Cooldown Period is over, the user can redeem their MON tokens to their wallet.

For more detailed technical information on how this process works, see Kintsu's docs on the Unstaking Mechanism.