> For the complete documentation index, see [llms.txt](https://chi-protocol.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://chi-protocol.gitbook.io/docs/chi-and-vechi/staking-chi-and-lst-yield.md).

# Staking CHI and LST Yield

CHI, the governance token of the Chi Protocol, derives its value from the increasing demand for USC, facilitated by buyback mechanisms and yield generation from LSTs. When users stake CHI, they access the yield from LST reserves that back USC. Therefore, CHI stakers not only potentially profit from price appreciation but also benefit from the growing USC market capitalisation. This expansion results from LST deposits, which increase the USC supply and subsequently yield more stETH to CHI stakers.

### **CHI Staking APR Calculation** <a href="#chi-staking-apr-calculation" id="chi-staking-apr-calculation"></a>

The CHI Staking Annual Percentage Rate (APR) is calculated using a formula that includes factors such as LST rewards to CHI stakers and the total CHI staked.\
\
**Effective CHI Staking APR vs LSTs**

* Assuming the value of the stCHI is lower than the LST  reserves and 100% of the LST yield is directed to CHI stakers
  * LSTs in reserves: $2,000,000
  * Value of stCHI : $100,000
  * Alice stakes $20,000 CHI, Bob stakes $30,000 CHI, and Cathy stakes $50,000 CHI&#x20;

Effective stCHI APR > LST APR:

| Definition                                    | Alice                    | Bob                      | Cathy                    |
| --------------------------------------------- | ------------------------ | ------------------------ | ------------------------ |
| stCHI                                         | $20,000                  | $30,000                  | $50,000                  |
| Share                                         | 20%                      | 30%                      | 50%                      |
| Total stCHI                                   |                          | $100,000                 |                          |
| LST APR                                       |                          | 4%                       |                          |
| ETH Staking Rewards (LST APR \* Reserves)     |                          | $80,000                  |                          |
| stCHI APR (ETH Staking Rewards / Total stCHI) |                          | 8%                       |                          |
| Rewards per Staker                            | 20% \* $80,000 = $16,000 | 30% \* $80,000 = $24,000 | 50% \* $80,000 = $40,000 |

{% hint style="info" %}
**\*Note** that when value of stCHI > LST reserves, Effective stCHI  APR < LST APR
{% endhint %}


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