wclETH - Liquid Staking Token on L2 networks

Stake

  1. When a user wants to stake on Ethereum but is willing to take the Liquid Staked Token (LST) on any L2 - Dexponent mints wclETH.

  2. The user selects an L2 network (eg. Arbitrum) as the choice to receive LST.

  3. Stake: Once the user transfers ETH to the MSC -

    1. ISC is created, if already not exists

    2. MSC instructs clETH smart contract to mint equivalent clETH and transfer to ISC of the user.

    3. clETH is locked on the ISC and is not transferred to the user's wallet. These remain locked until the user unstakes.

    4. Dexponent backend instructs wclETH smart contract (ERC20 token) deployed on the L2 network to mint wclETH and transfer it to the user’s wallet.

Rewards:

  1. Since ISC is the withdrawal address, the rewards ETH is collected in ISC.

  2. Once the user claims the rewards, partial or complete - Dexponent backend does the following:

    1. Instructs clETH smart contract to mint an equivalent amount of clETH and lock it in ISC.

    2. Instructs wclETH smart contract to mint the equivalent amount of wclETH and transfer it to the user's wallet.

    3. Since wclETH is transferred to the user’s wallet, equivalent ETH from the ISC is transferred to MSC. This will maintain the ratio of ETH and wclETH on the platform. The clETH locked in the ISC will remain in ISC.

    4. The amount of ETH pending to be claimed by the user from ISC will be the unclaimed rewards of the user. This will make sure the total of (claimed+unclaimed) rewards on the ISC is maintained.

Unstake:

  1. Once the user exits a validator - 32 wclETH from the user’s wallet is burnt.

  2. Since the ISC address is the withdrawal address, ETH is sent to the same address after exiting the validator.

  3. Once the user claims the unstaked ETH, the ETH is directly transferred to the user's wallet from ISC. The locked clETH is also burnt from the ISC.

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