Liquid Staking Assets

What are Liquid Staking assets?

Liquid Staking assets are a cornerstone of DeFi landscape. This is a real bridge between staked assets and liquid markets. In CAGA ecosystem, three primary Liquid Staking assets stand out: cgETH and cgCAGA. These tokens are signifying your stake in the respective networks while allowing you to interact with the DeFi space without closing your staked position.

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How do we issue Liquid Staking assets?

This process is quite simple and consists of 3 major steps: smart contract call, Liquid Staking asset generation and adding to wallet.

1. Smart contract call (= Initial staking)

When user A initiate the staking process by depositing their assets (ETH, CAGA, or MATIC) on the CAGA platform the smart contract is called to convert them into Liquid Staking.

This process can be described with a simple formula:

$$\text{Liquid Staking Asset Issued} = \text{Asset Staked x Conversion Rate}$$

1. Liquid Staking asset generation

During staking, the CAGA protocol automatically issues the corresponding Liquid Staking assets (cgETH, cgCAGA). To ensure a straightforward representation of staked value. Users can unstake to receive the amount of tokens they staked initially.

1. Adding to wallet

After the asset was generated, it would automatically be added to your connected wallet address. The Liquid Staking assets represent a claim on the staked assets, embodying the staked value and the accrued rewards.

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How price is calculated?

Price is tied to the underlying assets. But it's important to consider market dynamics like supply and demand, along with the accrued staking rewards - they all can influence the price.

Here is the formula how we calculate the price:

$$\text{Liquid Staking Token Price} = \text{Underlying Token Price}$$