• Staking
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  • Development Details
  • Avalanche Liquid Staking

AVAX staking mechanics

AVAX Liquid Staking lets the user stake their funds through the Ankr deposit address on the Avalanche network, accumulate rewards, and receive their stake+rewards when unstaking.

The following section explains staking requirements, fees, rewards, validators, smart contracts and function calls to interact with these smart contracts.

Requirements

The requirements when staking are:

  • Minimum value to stake — 1 AVAX.

  • Stake can only be a whole number.

  • Maximum value to stake — unlimited, at the user’s discretion.

The requirements when unstaking are:

  • Minimum value to unstake — 0 AVAX.

  • Unstaking allows fractional numbers.

  • Maximum value to unstake — staked amount + % of the reward, up to the user’s balance.

  • Release time — end of the current validating period, which is 4 weeks.

Fees

The user pays 2% fee from the staking reward.

The user must also count in the gas price for outgoing transactions.

Rewards

User's aAVAXb balance grows daily. It can be described as daily rewards / total share * user's share.

Validators that work correctly and are online at least 80% of their validating period, receive rewards at the end of the validating period.

Validators

On Avalanche, Ankr has three validators:

Smart contracts

Smart contracts involved AVAX Liquid Staking are:

  1. aAVAXb — keeps track of user shares and their ratio to AVAX and keeps track of aAVAXb supply share; aAVAXb is an ERC-20-like token.
  2. aAVAXc — keeps track of user shares and aAVAXc supply share; aAVAXc is an ERC-20-like token.
  3. AvalanchePool — implements staking and unstaking logic.

Addresses of these smart contracts are:

Staking workflow

The workflow is both user and Ankr-driven. The user part is Step 1, the Ankr part is Steps 2–5.

  1. User sends AVAX to AvalanchePool on the Avalanche blockchain via the Ankr Staking Dashboard and MetaMask connected to the Avalanche blockchain. The function effectively called is AlavalchePool::stakeAndClaimBonds() or AlavalchePool::stakeAndClaimCerts() for aAVAXb and aAVAXc respectively.

  2. AvalanchePool emits an event saying the stake is received: AlavalchePool::StakePendingV2(address indexed staker, uint256 amount, bool indexed isRebasing). isRebasing is false for stakeAndClaimCerts and true for stakeAndClaimBonds.

  3. AvalanchePool calculates and stores/updates the number of aAVAXb or aAVAXc the user can claim.

  4. Ankr backend collects the staked AVAX transferring them from the smart contract to the deposit address controlled by Ankr. Then it makes a delegator or validator stake on the Avalanche blockchain.

  5. aAVAXb or aAVAXc is minted automatically for the user's address.

Ratio updates

Ankr backend updates the ratio daily and the user can see their updated aAVAXb balance. For aAVAXc the updated ratio is used for recalculating value of aAVAXc to AVAX.

Unstaking workflow

Unstaking aAVAXb workflow starts from Step 2, while aAVAXc — from Step 1. The workflow is both user and Ankr-driven. The user part is Steps 1-2, the Ankr part is Steps 3–4.

  1. The user inputs the number of aAVAXb or aAVAXc on the Ankr Staking Dashboard to unstake, and the frontend:

    1. For aAVAXb sends a request to the AvalanchePool::claimBonds(uint256 amount) smart contract to claim the AVAX. amount specifies the amount AVAX to be released back to the user.
    2. For aAVAXc For aAVAXc, first sends a request to the aAVAXc::approve(aAVAXb.address, amount) to let the aAVAXb smart contract transfer the user's Liquid Staking tokens to aAVAXb and exchange them to aAVAXb. Second, sends a request to the AvalanchePool::claimCerts(uint256 amount) smart contract to claim the AVAX. amount specifies the amount AVAX to be released back to the user.
  2. AvalanchePool sends a convert request to the aAVAXb smart contract that burns the corresponding amount of aAVAXb. AvalanchePool stores the convert request.

  3. When the current validation period is over, Ankr backend checks if there any aAVAXb-to-AVAX or aAVAXc-to-AVAX convert requests pending and requests AvalanchePool to serve them providing AVAX from unblocked stakes and received rewards, at the end of the current validating period.

  4. AvalanchePool uses the AVAX received from the Ankr dedicated address to serve the pending convert requests.