Flow of Funds

Stake:

Flow of Funds (Stake)

1. A KYC’ed user can initiate the Staking process on the Dexponent platform.

2. The user interacts with the Master Smart Contract (MSC) and signs a wallet transaction to deposit ETH to this contract.

3. MSC immediately takes two actions:

   1. MSC directs the clETH smart contract to mint an equivalent amount of the liquid token called clETH (ERC20 token) and send it to the user’s wallet.

   2. MSC does not hold the user funds and immediately creates an Individual Smart Contract (ISC) to maintain the separation of the staked ETH funded by the user.

4. 1 user wallet address means 1 ISC, every wallet connected will have its own ISC created.

5. The user can stake a minimum of 32ETH. The multiples of 32ETH are used to stake on Beacon Chain. The remaining ETH will be kept in ISC. Example - If the user stakes 33ETH on the platform, 32ETH will be staked on Beacon chain and 1ETH remains in ISC.

6. For all the ETH staked on the platform, LST will be issued.

7. Once the funds are segregated and received on the ISC, Dexponent takes two actions:

   1. Directs the Node Operator to create validators and their deposit keys

   2. Transfer the ETH to Node Operator Deposit Smart Contract

8. The node operator is responsible for transferring the ETH to the Ethereum Deposit Smart Contract.

9. Once the beacon chain activates the validator, the staking is said to be completed and rewards start to be acquired.

Rewards:

Flow of Funds (Rewards)

1. The ISC of the user is marked as the withdrawal address for the user. The ETH rewards earned by the validator are sent to ISC by the Beacon chain.

2. Users can claim the rewards from the ISC, and equivalent clETH is minted and sent to the user's wallet. To maintain the ratio of user’s rewards earned and clETH minted, claimed rewards equivalent ETH is transferred from the ISC to MSC.

3. Since clETH is transferred to the user's wallet, equivalent ETH from the ISC is transferred to MSC. This will maintain the ratio of ETH and clETH on the platform.

Unstake:

Flow of Funds (Unstake)

1. A KYC’ed user selects a validator created by the respective ISC to exit by transferring 32 clETH per validator to MSC, which in turn is directed to the respective ISC.

2. The request is made to the Node Operator to exit the particular validator. The node operator in turn requests the beacon chain to exit the validator. The request gets into the exit queue on the Beacon chain.

3. Once the validator is exited the ETH is transferred to ISC.

4. The user can immediately claim to get these unstaked ETH to the wallet. Once claimed, MSC directs clETH smart contract to burn these clETH.