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⛓️How Liquid Staking Works

Liquid staking transforms the native staking process into a more flexible and accessible model.

Overview

Liquid staking with Project Pi unlocks the potential of PLS by combining staking and liquidity. Through Pi Pools, staked PLS supports PulseChain while providing users with flexible utility. Funds deposited into the TokenstPLS contract connect stakers and node operators, strengthening PulseChain’s decentralized network.

What is stPLS?

stPLS is a PRC4626-compliant liquid staking token representing staked PLS. Users can:

  • Holding: Earn rewards over time.

  • Trading: Sell stPLS for liquidity.

  • DeFi Integration: Use stPLS in DeFi to earn additional yield.

What Happens to Staked PLS?

  1. Deposit to the Pool: Staked PLS is added to the TokenstPLS contract’s deposit pool.

  2. Validator Matching: 16M PLS is paired with 16M PLS from a Pi Pool operator, meeting the 32M PLS validator requirement.

  3. Fund Transfer and Validator Registration: Funds are transferred via multisig, and the Pi Pool is registered as a validator on PulseChain.

  4. Validation Period: Each Pi Pool participates in a 15-day cycle, earning rewards.

  5. Reward Distribution: After the cycle, rewards are reinvested into the deposit pool, increasing its value and reflecting in stPLS growth.

What Happens When stPLS is Redeemed for PLS?

Users can redeem stPLS for PLS through two primary methods:

  1. Unstaking: Redeem stPLS through Pi Staking, subject to deposit pool liquidity. If funds are in Pi Pools, redemption may require waiting for the next cycle. stPLS is burned, and PLS is returned.

  2. Immediate Swapping: Instantly trade stPLS for PLS on DEXs at market rates. Project Pi provides liquidity, and meta aggregators can optimize trades.

Conclusion

Liquid staking with Project Pi empowers users to actively support PulseChain’s growth while maintaining flexibility to leverage staked assets in DeFi. By offering staking rewards, validator support, and liquidity, Project Pi is driving the evolution of liquid staking on PulseChain.

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