Liquid staking pool

Liquid Staking (LSt) is a protocol that connects TON holders of all caliber with hardware node operators to participate in TON Blockchain validation through assets pooling.

TON holders aka Nominators put funds to the pool and get Pool Jettons which can be used in any DeFi protocol. Those Jettons represent share of the pool and increase in TON value by accruing validation rewards.

Node operators can work for pool by using it's funds as validation stake and share validation reward.

More info in documentation.

Work with code

• Clone repo with all submodules: git clone --recurse-submodules <git-url>
• Install dependencies (you need Node v18+): npm install
• Build all contracts: npx blueprint build --all
• Run tests: npm test -- tests/*.ts (standard npx blueprint test won't work correctly due to tests in submodules. To run those change dir to submodule and run tests from there)
• Run deploy script (carefully read it and check that it does what you want): npx blueprint run

Technical description

Terms

• elector: smart-contract which accepts stakes, conduct election, decides next active validator keys and distribute reward for validation
• Сontroller: smart-contract which manage funds for stake
• validator: actor which running TON node and (try to) participate in elections, and if elected validate new blocks. It knows it's private validator key and also "partially" control it's own Сontroller (can send and receive stakes, but can not withdraw all money for itself)
• nominator: actor who have assets (TON) and want to lend them to validators through JettonPool to get interest on it
• jettons: TEP-74+TEP-89 Jettons : scalable tokens on TON blockchain

Scheme

Validators participate in elections via Сontroller which

1. Requests funds from Validation Pool after getting Validator approval
2. accepts and accounts funds from validation pool and validators
3. ensures that assets lended to validators can not be withdrawn
4. sends stake plus agreed on lending interest after validation round to validation pool

Pool Central contract:

• Interact with controllers
  1. Lends assets to Сontrollers upon borrow request from Сontroller in accordance to Current Rate
  2. Receives assets and aggregates profit/loss information from Сontrollers
• Interaction with stakers
  3. manages deposits and withdrawals
• Interact with Interest Manager:
  4. sends aggregate lending round statistics
  5. updates interest upon request from Interest Manager
• Interact with Governor:
  6. sends profits share
  7. updates parameters upon request: deposit params (open?, optimistic?), roles (halter, sudoer, interest_manager, governor), state (unhalt).

pool jetton is jetton which is used to manage assets lended to the pool. It also has DAO voting capabilities to be used for voting for network config parameters.

Deposits/Withdrawals: pool jetton/TON ratio is updated once per round. In strict mode, we assume that this ratio is not known till the end of the round and thus actual deposits/withdrawals should be postponed till the end of the round. Besides, even in optimistic mode (when deposits/withdrawals are processed through projected ratio), withdrawals often can not be made if pool has no enough TON. Thus Deposits/Withdrawals are special contracts which represent deposit/withdrawals in process. Can be implemented as NFT or Jettons so all wallets will be able to interact with it.

Roles

Halter Halts all parts of the system if necessary.

Sudoer Empty by default role, which is able to send arbitrary message from arbitrary part of the system. Sudoer only become active if set more than sudoer_threshold seconds ago (expected to be 24h). Can upgrade code and directly update data.

Approver Role to approve Controllers for borrow requests

Interest Manager Get round stats and update interest params

Governor

1. set other roles in Pool, Controller, Minters
2. set some parameters (governance fee) in Pool

Each role may be performed by a wallet, multisignature wallet or DAO. It is expected that in final revision:

• Halter will be a hot wallet which scan blockchain and halts everything in case of unexpected behavior
• Approver will be either cold wallet or combined with the Governance
• Interest Manager will be a smart contract which implements some equilibria logic
• Governance will be jetton-based DAO with it's owng GJ: governance jetton. Optionally, filter of outcoming messages can be added that resticts setting sudoer and othe parameters.

Optimistic deposits/withdrawals

By default it is assumed that ratio pool jetton/TON in unpredictable since validators can be slashed and thus it is impossible with 100% probability say how much pool balance will change on round end. If, indeed, ratio can fluctuate both ways (to increase and to decrease) than we need to postpone all deposits and withdrawals and process them immediately on round end. Otherwise, if lets say one knows that pool validators will be severely slashed and withdraw funds before that, he will avaid loss by distributing it to other holders.

However, since protocol ensures that validator have enough funds to pay expected fines and credit interest is agreed on during loan granting, under normal conditions amount of returned TON on the round end is determined and thus it is possible to calculate projected pool jetton / TON ratio. Given that it is possible to process deposits and withdrawals in optimistic mode: deposits should be converted to pool jetton basing on the projected ratio at the end of the round, and withdrawals should be converted to TON basing on the current ratio (like this funds do not work in the round). This optimistic mode should be activated only if there are measures to protect agains validator cheating attemts: for instance validator fully disclose himself.

Fill or Kill and Immediate withdrawals

If optimistic mode is activated, still withdrawals often can not be processed immediately if pool has not enough TONs. In this case Withdrawal bill should be minted which may not be optimal for nominator. At the same time, sometimes nominator want wait till the end of the round to get profit of this round even if optimistic mode is on. To control this behavior there are two flags in burn requests:

• wait_till_round_end - if true Withdrawal bill will be minted regardless of possibility to make immediate withdrawal
• fill_or_kill - if true and there is no enough TON, burn will be reverted via minting pool jettons back.

Components

Сontroller

Сontroller accounts funds of validator and funds borrowed from Validation Pool. It can process deposits from Validator and from Validation Pool (later Pool). Upon request from validator it can send stake from it's balance to Elector. Upon request it can requests withdrawal from Elector, but only after at least three updated of validator sets (here is why it is necessary for correct stake account). Thus Controller need ability to "count" validator sets updates, for that purpose there is update_set_hash request. Both withdrawal and update_set_hash requests can be sent by validator or, after grace period, by anybody. In the latter case sender gets bounty out of validator funds. This functionality protects against non-responding validator.

Validator-controler specify maximal interest rate, minimal and maximal TON credit size in borrow request. Validator can only request such parameters that it has interest plus recommended fine on it's balance. It can only request funds if is approved by Approver.

Upon receiving stake from Elector, Сontroller sends borrowed assets plus interest to the Validation pool.

Handlers of incoming messages

• deposit (only from Pool)
• count validator set update (from Validator or anybody after grace period)
• demand to request stake from Elector (from Validator or anybody after grace period)
• deposit Validator (only from Validator)
• withdraw Validator (only from Validator)
• demand to send stake to Elector (only from Validator)
• stake from Elector (only from Elector)
• Governance requests (from Governance, Halter, Sudoer)
• approve/disapprove (from Approver) bounces
• bounce of sent stake to Elector (only from Elector)

Outcoming messages:

• new_stake (to Elector)
• request state (to Elector)
• Borrowin request (to Pool)
• Debt repayment (to Pool)
• Validator withdrawal (to Validator)

Detailed docs on Validator controler

If Сontroller doesn't have enough assets to repay debt after stake recovery: halt Сontroller, and expect that Governance will "manually" decide what to do, for instance wait till validator replenish Сontroller or withdraw everything depending on conditions.

Pool

Controller part

Process lending requests from Validator Approvals: send funds if there are enough funds and request fits rate and limits. Saves to active controller list (it is expected that there will be no more than hundreds of those).

Receives debt repayment from validator-controlers: remove them from active controller list

Account for fees: send governance fee to governance

Aggregate profit/loss data for each round, ratio of pool jetton/TON, sends stats to Interest Manager

User part

Keep track of ratio of pool jetton/TON.

Receives deposits from nominators and mints Deposit/pool jetton for them.

Receives pool jetton burns notifications (withdrawal requests) from nominators' wallets and mints Withdrawal/TON for them or revert burn.

Keep track of summs of current round payouts (Withdrawals/Deposits).

On aggregation event (lending round end):

• mints pool jetton to Deposit Payout minter for distribution
• sends TONs to Withdrawal Payout minter to fulfill withdrawals

Handlers of incoming messages

• borrow request (only from Сontroller)
• Governance requests (from Governance, Halter, Sudoer)
• debt repayment (only from Controller in active controller list)
• deposits (from any user)
• burn notifications (from pool jetton wallets) bounces
• TODO

Outcoming messages:

• deposit to controller (to Controller, insert into active controller list)
• aggregated profit notification (to Interest Manager)
• Fees to Governance
• mint pool jetton (to Deposit Payout and nominator)
• TONs (to Withdrawal Payout and nominator)

Detailed docs on Pool

Pool jetton

Jetton that represents share in pool assets. It can be implemented as DAO Jetton in such a way that owners of pool jetton will be able to vote for network config updates.

Payouts

Postponed till the end of the round deposits/withdrawals can be represented on-chain in different form. Two main approaches is to use Jettons and NFT.

Payout NFT

In this scheme Payout is NFT collection and "conversion obligation" is an NFT. Each round a new payouts collections for deposit and withdrawal are created.

When you deposit TON to pool you immediately get Deposit Bill. Later after current validation round ends and funds are released from Elector, correct poolJetton/TON ratio is discovered, amount of pool jetton corresponded to total deposits value is calculated and sent to Deposit Collection. After that Deposit Collection send burn request to the last minted NFT which trigger the conversion of that NFT and simulatneously sending burn request ton the NFT before that. Here the idea that NFTs are linked list is used to iterate through whole collection.

This implementation allows processed deposits/withdrawals to be sent to other users as a whole and allows autoconversion to assets when ready. In current implementation it is the main used mechanism