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. Stake

How It Works

The goTAO staking mechanism integrates several advanced concepts to deliver an efficient, scalable staking solution:

1. Staking Process

When users stake their ETH or $GAO tokens on goTAO, they receive liquid staking derivatives—stETH for ETH stakers and stGAO for GAO stakers. These tokens represent a staked position within the goTAO staking pools and serve multiple purposes:

  • Liquidity Maintenance: While the underlying assets (ETH or $GAO) remain staked, stETH can be used across various DeFi platforms, providing users with continued liquidity and flexibility.

  • Earned Rewards: The value of stETH and stGAO appreciates based on the rewards generated by their respective staking pools, meaning the longer users hold these derivatives, the more rewards they earn.

2. Dynamic Yield System

The staking mechanism operates with a dynamic yield system that adjusts rewards based on real-time pool performance:

  • ETH/stETH Ratio: For ETH staking, the stETH token’s value fluctuates based on the ratio between ETH and stETH in the pool. As more ETH is added (via transaction fees or new stakers), the value of stETH increases relative to ETH, offering stakers capital appreciation alongside staking rewards.

  • GAO/stGAO Pool: Similarly, the GAO/stGAO pool operates on a performance-based reward system, where stGAO appreciates over time as rewards are generated. This model encourages long-term staking and deeper engagement within the ecosystem.

3. Restaking

goTAO’s innovative restaking feature allows users to stake their stETH in additional staking pools to earn more rewards without having to unstake their original assets. The restaking system offers multiple benefits:

  • Capital Efficiency: Users can maximize the utility of their staked assets by earning rewards across multiple layers (primary staking and restaking pools) while keeping their assets staked in the main pools.

  • Multi-Layer Yield: Restaking enables users to earn compounded rewards from both the base staking pool and the secondary restaking pools, significantly boosting their overall returns.

4. Redemption

  • stETH -> ETH: When users opt to redeem their ETH from stETH, a 1-day lock period is enforced. This ensures stability in the staking pool and prevents sudden liquidity shocks, while still offering users flexibility to exit their positions within a reasonable time frame.

  • stGAO -> $GAO: To manage liquidity and mitigate the risk of sudden withdrawals, redeeming stGAO for $GAO requires a 3-day lock period. This extended lock time stabilizes the $GAO pool and provides the protocol with sufficient time to rebalance liquidity if large-scale redemptions occur​.

During this lock period, users retain the flexibility to cancel their redemption requests, ensuring that they can adjust their strategies as needed. Upon completion of the lock period, users can redeem their stETH for ETH and stGAO for $GAO at the prevailing ETH/stETH and $GAO/stGAO ratio, allowing for optimized returns based on the pool's performance​.

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Last updated 6 months ago