How does Tonstakers work?

Tonstakers utilizes a common liquid staking concept by gathering users' tokens in one pool, then staking those tokens and distributing staking rewards among participants.

Users deposit their TON into the Tonstakers pool. Then Tonstakers lends their tokens to trusted validators. Validators start staking, receive rewards, and at the end of the validation cycle return borrowed TON plus the received rewards to the Tonstakers pool. The process repeats and the pool grows.

The complete liquid staking flow is the following:

  1. User X deposits 100 TON to the Tonstakers pool. Tonstakers mint 100 tsTON tokens, representing user X's share in the staking pool, and give them to user X.
  2. Tonstakers add user X's TON to their partner validators, so those TON start generating staking rewards.
  3. At the end of each validation cycle, the staking rewards are added to the staking pool and then used again in staking along with the originally deposited TON.
  4. When user X decides to unstake, Tonstakers exchanges tsTON for a share of TON in the Tonstakers pool. As the pool has been accumulating rewards all the time, user X will receive more than deposited, say 1.05 TON per 1 tsTON. This is how rewards are distributed.

tsTON is the Liquid Staking Token (LST or LS Token) of Tonstakers. It is fungible and users might buy it without staking TON on Tonstakers to get a share of the pool plus future rewards or sell it on DEX without unstaking. They can also use tsTON in lending protocols, liquidity pools, and other DeFi applications on TON Network while receiving staking rewards to generate more yield.

Find more about tsTON in tsTON FAQ section.

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