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
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  1. KEY FEATURES
  2. Restake

How It Works

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Last updated 6 months ago

In the goTAO ecosystem, restaking stETH operates as an advanced staking mechanism built on top of the Bittensor blockchain. It functions in conjunction with the initial staking of ETH, where users are issued stETH (staked ETH) as a representation of their locked ETH. stETH is not just a placeholder but a liquid derivative token that retains its value relative to ETH and can also be further staked (restaked) to maximize returns.

1. Initial ETH Staking:

  • Users stake their ETH in the goTAO staking contract, which is managed by secure smart contracts. In return, they receive stETH, a liquid token that can be held, traded, or restaked.

  • While users hold stETH, it continuously appreciates based on the dynamic ETH/stETH ratio, which reflects the overall pool’s performance and liquidity​

2. Restaking stETH:

  • Users can choose to lock their stETH into the goTAO restaking pool, which is managed separately from the primary ETH staking pool. The stETH tokens continue to represent the staked ETH and generate rewards while also being restaked to earn additional $GAO.

  • The original ETH remains staked and continues to generate primary rewards, while the restaked stETH earns secondary rewards in the form of $GAO, creating a dual reward stream.

3. Dual-Layer Rewards:

  • Primary Rewards: The staked ETH accrues rewards through the ETH/stETH ratio, which increases as the staking pool grows in size and liquidity.

  • Secondary Rewards: The restaked stETH generates rewards in $GAO, allowing users to capitalize on both the original ETH stake and the restaked stETH. This setup significantly enhances the potential returns on investment and creates a compounding effect on earnings.

4. Compounded Yield:

  • Since stETH remains a liquid asset, users can continue using it across different platforms while also benefiting from the compounded rewards generated from restaking in goTAO. This process creates a self-reinforcing yield loop, maximizing returns without sacrificing liquidity.

The restaking mechanism in goTAO relies on smart contracts to automate and secure the staking and restaking processes. These contracts are designed to:

  • Lock assets securely: Both ETH and stETH are managed through audited contracts that ensure the safety and integrity of the assets.

  • Track and distribute rewards: The contracts monitor the performance of both the primary and secondary staking pools, calculating rewards in real-time and distributing them based on the stETH balance in the restaking pool.

  • Maintain liquidity: Even when stETH is restaked, users retain the flexibility to redeem their stETH for ETH at any time, subject to the redemption lock period (1 day), ensuring that liquidity is preserved while maximizing returns