Architectural Design
The diagram above outlines the architecture of the LSD protocol. In addition to the stOAS token contract, the protocol comprises two primary contracts.
LSD Contract: This contract manages the core functionality of the LSD protocol, including the minting and redemption of stOAS tokens. It implements the logic for delegating and undelegating OAS tokens by interfacing with the OAS StakingManager contract. Additionally, it handles the compounding of staking rewards for OAS.
Funding Contract: As the name implies, this contract is designated to hold OAS reserved for redemption claims. It serves to separate newly deposited OAS (from holders) from assets earmarked for redemption (following a claim request).
Beyond these contracts, the LSD protocol includes a component designed to trigger the LSD contract on a regular schedule (daily, at 00:00 UTC). This ensures timely processing of key tasks, including deposits, reward compounding, and redemption claims.
Staking and Minting
Users can deposit any amount of OAS into the LSD contract deployed on the Oasys Hub (L1) network. Upon deposit, the contract instantly issues stOAS tokens to the user’s account, matching the value of the OAS deposited. The quantity of stOAS issued is determined by the following calculation:
Deposited OAS is periodically and automatically staked to a designated validator. Specific parameters may apply during this process, such as the designated staking validator (currently MCH Co. Ltd.) and the maximum staking limit for each validator.
The protocol’s deposit routine compounds staking rewards by reinvesting claimed rewards from the validator. In addition to the user-initiated staking, rewards are automatically claimed and compounded once daily to maximize returns.
Redeeming stOAS
Users may redeem stOAS for OAS at any time by submitting a redemption transaction to the LSD contract. Upon submission, the LSD contract burns the stOAS tokens and logs the redemption request within the contract. 10 days following the request, users may claim their OAS from the LSD contract. The exact amount of OAS received upon redemption of stOAS is calculated as follows:
The backend system periodically consolidates all redemption requests and initiates transactions to undelegate the necessary OAS from the validator.
Reward sharing scheme
A portion of staking rewards is allocated by the LSD protocol to cover development and operational expenses, including server costs. Currently, 90% of the staking rewards—after deducting a 10% commission fee for the validator—is restaked to generate compound interest for stakers, while the remaining 10% is retained by Neptune.
Specifically, the annual validator reward rate for Oasys is 10%. Of this total, 8.1% (or 81% of the annual reward) is compounded as a return for stakers. The remaining 0.9% is allocated to Neptune, and the final 1% is retained by the validator.
Last updated