goTAO Documentation ττ
  • Introduction
    • Abstract
    • Overview of goTAO
    • goTAO's Mission and Vision
    • The Foundation
      • What is Bittensor (TAO)?
      • How Bittensor Integrates with goTAO
      • Bittensor’s Role in the Future of AI-based Blockchain Systems
    • goTAO Architecture
  • Tutorial
    • GoTAO Stake Tutorial
    • GoTAO Testnet Tutorial
      • Faucet
      • Transfer
      • Check history
  • KEY FEATURES
    • Stake
      • How It Works
      • Staking Rewards
    • Restake
      • How It Works
      • Restaking Rewards
  • $GAO Token
    • $GAO Overview
    • Supply and Distribution
    • Tax Structure
  • Community
    • Follow us on X
    • Join Us on Telegram
Powered by GitBook
On this page
  1. KEY FEATURES

Restake

Restaking is an advanced mechanism that allows users to reinvest liquid staking derivatives (e.g., stETH) back into the staking protocol to earn additional rewards. This process unlocks dual-layer yield generation, enabling users to earn compounding returns while maintaining liquidity. The innovation behind restaking in goTAO is that it maximizes capital efficiency by letting users continuously generate returns on assets that remain active in the system.

Restaking in goTAO specifically focuses on stETH (staked Ethereum), which users receive when they stake their ETH. By restaking stETH, participants can earn additional $GAO rewards, compounding their earnings while maintaining access to their liquid staked tokens. The process revolves around the seamless integration of the staking and restaking layers, designed to create multiple streams of rewards from a single asset.

1. Retaining Liquidity with stETH

The core advantage of restaking stETH is its liquidity. When users stake ETH and receive stETH, they retain the flexibility to use that stETH across DeFi protocols while still earning yield. This liquid staking model ensures that the user's assets remain liquid and accessible, enabling broader financial strategies without locking up capital.

  • stETH’s Role in Liquidity: stETH can be deployed in various DeFi strategies while earning rewards from the underlying staked ETH. Users maintain liquidity for their staked assets, enhancing the flexibility of capital use across decentralized platforms​.

2. Dual-Layer Yield Generation

goTAO’s restaking model introduces a dual-layer yield generation mechanism, where users can relock their stETH to earn further rewards in $GAO. This system allows users to benefit from two yield streams: the ongoing rewards from stETH and the added $GAO rewards from restaking.

  • Primary Yield (stETH): The initial staking of ETH generates stETH, which appreciates based on the overall growth and staking performance of the ETH pool.

  • Secondary Yield ($GAO): By restaking stETH in the goTAO protocol, users can earn $GAO rewards, further amplifying their returns without having to unstake their stETH. This layered approach to yield generation maximizes capital efficiency and provides users with compounded returns​.

3. Boosting Pool Liquidity

A critical aspect of restaking in goTAO is the reinvestment of a portion of transaction fees back into the ETH/stETH liquidity pool. This strategic reinvestment helps ensure that the liquidity pool grows over time, increasing the value of stETH and enhancing the network's overall sustainability.

  • Fee Allocation: A portion of the fees generated from restaking is allocated to the ETH/stETH liquidity pool, which continuously increases the pool’s value. This ensures that as more participants engage in staking and restaking, the liquidity pool remains robust, supporting higher redemption values for stETH holders​..

  • ETH Redemption Process: When users wish to redeem their stETH for ETH, the 1-day lock period ensures a stable transition without liquidity disruptions. As the pool grows through fee reinvestments, the process of redeeming ETH becomes more favorable for users, offering better redemption rates over time.

PreviousStaking RewardsNextHow It Works

Last updated 6 months ago