Arithmic Documentation
  • Introduction
  • Gen 1.0 - Gen 2.0 VMs and Staking
    • Gen 1.0 VM and its Limitations
    • Gen 2.0 VM Paradigm
    • Recursion in Gen 1.0 and Gen 2.0 VMs
    • Staking & LSTs
    • Restaking & LRTs
  • Arithmic Gen 2.0 zkVM Soma: The future of zkEVMs
    • Soma System Design
    • Hardware Acceleration
    • Performance
    • Outperforming the Competition
  • Network Architecture
    • Nodes
    • Client and Explorer
    • Data Availability
    • Decentralized Sequencing
    • Computation & Decentralized Infrastructure
  • Arithmic Network's Staking Model
    • Problem of Fractured Incentives
    • Aligning Network Incentives
  • Arithmic’s Multichain Staking Pools (MSP)
    • How does an Arithmic MSP work?
      • Stable Hyper-Staked Token (sHST)
      • Equity Hyper-Staked Token (eHST)
      • MSP Example
    • Types of Staking Pools
  • Arithmic Rewards System
    • Earning Arithmic Points
    • Participating in Arithmic MSPs
  • Arithmic Network's Roadmap
  • Our Vision
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  1. Arithmic’s Multichain Staking Pools (MSP)
  2. How does an Arithmic MSP work?

MSP Example

PreviousEquity Hyper-Staked Token (eHST)NextTypes of Staking Pools

Last updated 1 year ago

Consider the following tokens being accepted into a staking pool and their corresponding approximate yields:

  • ETH ~ 4% yield

  • LSTs ~ 3.5% yield

  • MATIC ~ 5.5% yield

  • ARITH ~ 15% yield

For this scenario, assume the quantities deposited of each token are equal. Therefore, the average yield of the pool is 7 %.

Consider that 100 users deposited into this pool and each deposits only 1 token. Pool size: 100 tokens After 12 months, with a 7% APR, the pool will contain 107 tokens. Therefore, 7 new tokens are being generated.

As described earlier, if there are 100 participants, following a division ratio of 1:4 gives us 20 eHST and 80 sHST holders.

sHST holders are guaranteed a return of 6%. In this case, this implies that 80 sHST holders receive ~ 5 tokens, meaning each sHST holder receives 0.0625 tokens on their 1 token deposit.

Therefore, the effective return rate earned by each sHST holder after 12 months is 6.25%

eHST holders, on the other hand, receive the remaining yield. This implies that 20 eHST holders receive 2 tokens, meaning each eHST holder receives 0.1 tokens on their 1 token deposit. Therefore, the effective return rate earned by each eHST holder after 12 months is 10%

It should also be noted that eHST holders receive any excess yield stored in the LEP over 12 months.