Staking CHI and LST yield

stCHI: Governance Token with LST Yield

CHI represents the governance token of the Chi Protocol, and its value is linked to the increasing demand for USC through buyback mechanisms and yield generation in LSTs. When users stake CHI, they gain access to the yield generated by the LST reserves backing USC. This means that, besides potentially profiting from CHI's price appreciation, CHI stakers also benefit from the expansion of the USC market capitalization. This occurs as a result of LST deposits, which leads to the increased supply of USC, yielding more stETH to CHI stakers.

CHI Staking APR Calculation

The CHI Staking Annual Percentage Rate (APR) is determined through a formula considering various factors, such as the LST's rewards and the total amount of staked CHI.

*Note that when users lock CHI, they automatically become stakers, meaning Total Staked CHI also includes locked CHI. Effective CHI Staking APR vs LSTs

  • Assuming the value of the stCHI is lower than the LST reserves

    • LSTs in reserves: $2,000,00

    • Value of stCHI : $1,000,00

      • Alice stakes $200,000 CHI, Bob stakes $300,000 CHI, and Cathy stakes $500,000 CHI

  • Effective stCHI APR > LST APR:

*Note that when value of stCHI > LST reserves, Effective stCHI APR < LST APR.

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