LP-0045Final

LP-045:

Abstract

Lux allows LUX holders to stake while retaining liquidity. Deposited LUX is delegated to validators on the P-chain. Users receive either sLUX (rebasing, balance increases daily) or xLUX (non-rebasing, value accrual through exchange rate). Both derivatives are fully backed by staked LUX and can be used as collateral, traded, or composed in DeFi.

Specification

sLUX (Rebasing)

sLUX uses a rebasing mechanism where all holders' balances increase proportionally:


totalShares: total internal shares
totalPooledLUX: total staked LUX + accrued rewards

balanceOf(account) = shares[account] * totalPooledLUX / totalShares

When staking rewards arrive, totalPooledLUX increases, automatically increasing all sLUX balances.

xLUX (Non-Rebasing)

xLUX wraps sLUX with a fixed-supply token whose exchange rate appreciates:


xLUX.exchangeRate = sLUX.balanceOf(xLUXVault) / xLUX.totalSupply()

xLUX is compatible with protocols that do not support rebasing tokens (vaults, lending markets).

Staking Flow

1. User deposits LUX to the StakingPool contract on C-chain

2. StakingPool transfers LUX to the P-chain via cross-chain export (LP-030)

3. LUX is delegated to validators selected by the node operator set

4. User receives sLUX or xLUX on C-chain

Validator Selection

The protocol selects validators based on:

Uptime: >95% uptime required
Commission: lower commission preferred
Stake distribution: spread across validators to avoid concentration
Maximum per validator: 10% of total protocol stake

Withdrawal

Withdrawals are subject to the P-chain unbonding period (2 weeks minimum):

1. User requests withdrawal by burning sLUX/xLUX

2. Request enters a withdrawal queue

3. When the delegated LUX is unstaked, it is returned to the user

4. A withdrawal buffer (5% of total deposits) enables instant withdrawals for small amounts

Fee Structure

| Fee | Rate | Recipient |

|---|---|---|

| Staking reward commission | 10% of rewards | 5% treasury, 5% node operators |

| Instant withdrawal fee | 0.1% | Withdrawal buffer (LPs) |

Oracle

The sLUX/LUX exchange rate is published to the K-chain (LP-038) for use in lending liquidations and other price-sensitive DeFi operations.

Security Considerations

1. Validator slashing: if a validator is slashed, the loss is socialized across all sLUX holders. The protocol maintains a slashing insurance fund (2% of total stake).

2. De-peg risk: sLUX may trade below par during high withdrawal demand. The withdrawal buffer and DEX liquidity pools mitigate this.

3. Oracle manipulation: the sLUX/LUX rate is derived from on-chain state, not market price. It cannot be flash-loan manipulated.

Reference

| Resource | Location |

|---|---|

| Liquid staking contracts | github.com/luxfi/standard/contracts/staking/ |

| StakingPool | StakingPool.sol |

| xLUX vault | XLUX.sol |

Copyright

Licensed under the MIT License.