Liquid Staking Token
The DeepNode Liquid Staking Token ($stDN) is a core economic primitive of the ecosystem. Its purpose is to maximize network security by increasing the total staked supply while giving users a fully liquid, yield-bearing asset.
The LST mechanism follows given figure:
1. Why Liquid Staking Exists
Traditional staking locks tokens, forcing users to choose between:
securing the network
earning rewards
or staying liquid
stDN removes this trade-off. Users can stake once, mint $stDN, and remain free to:
provide liquidity
participate in DeFi
pay for computation
or trade
all while still earning validator-powered staking rewards.
2. How $stDN Works
Users deposit $DN into the staking contract.
They receive $stDN at a 1:1 ratio at genesis.
As validators earn revenue and emissions, $stDN grows in value, not in quantity.
At any time, users can unstake and receive their original $DN minus the withdrawal fee.
$stDN = staked $DN + accrued validator revenue + protocol revenue share.
3. Flow Breakdown Based on the Diagram
Below is the simplified version of the diagram’s economic flow.
A. Stake → Mint $stDN
Users stake $DN into the Staking Contract.
They receive the same amount of $stDN initially.
This marks the start of their participation in staking rewards.
B. Rewards Accrue to $stDN
Emission rewards flow into the $stDN pool:
As rewards accumulate, the value of each $stDN increases, similar to how Lido’s stETH grows.
Users do not receive more $stDN. The per-token value increases as the pool grows.
C. Validators & Stakers
95% of stake rewards go to validators and stakers. These rewards accumulate in the staking pool, causing $stDN to grow in value over time and directly linking validator performance to $stDN yield.
D. LSD Management Module
A portion of staking revenue:
5% → LSD Management
Of this, 4% goes to Foundation (ecosystem development)
And 1% goes to Burn, permanently reducing supply
This introduces long-term sustainability and deflationary pressure.
E. Unstaking Period
Users can redeem their $stDN for $DN through the Unstake module.
Unstaking triggers a pending period (t) before tokens are released
A small withdrawal fee (z%) is applied
The withdrawal fee is burned to strengthen $DN scarcity
After period t completes, the user receives $DN back.
t = 14 days planned for Phase 1.
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