SDL Staking

SDL (stake.link) is stake.link's protocol token. Protocol tokens generally serve as a means of facilitating operations, governance, or incentives within the platform's ecosystem. These tokens often grant holders voting rights on protocol changes and are used to reward participation or transaction validation.

When staked, SDL returns "reSDL", an NFT representation of SDL. reSDL stands for "reward escrow SDL". The reward escrow tokenomics model ("re" model), was inspired by the vote escrow tokenomics ("ve") model designed by Curve. Vote escrow is intended to promote long term participation via boosts and governance votes.

reSDL provides three benefits to users:

• Rewards: Earn rewards in the form of stLINK
• Priority Staking Mode: Priority access for LINK staking in the Priority Pool
• Governance: Enables voting for community procedures such as community council seat elections.

The more reSDL a user has, the more rewards they will earn, the more LINK they will be able to stake relative to other users, and the more governance weight they will have for community votes (e.g., council elections, etc.).

SDL is available on common decentralized exchange platforms for both Ethereum and Arbitrum mainnets.

Ethereum: DefiLlama Aggregator, KyberSwap and Uniswap

Arbitrum: Camelot

When you stake SDL, you will receive a receipt token "reSDL" which is an NFT representation of your underlying SDL.

Optionally, you may "lock" your reSDL between 1-4 years. Locking reSDL will "boost" the reSDL representation, granting more rewards, boosting your Staking Mode status (increasing LINK staking capacity) and increasing your governance concentration for community voting procedures.

The formula for locking is SDLBalance * ((YearsLocked * 2) + 1). For example, 100 SDL locked for four years confers a 900 reSDL effective balance.

Disclaimer: Locking SDL does not increase SDL when unlocked - it just multiplies governance concentration and rewards from all Staking Pools.

Enable Priority Staking Mode by holding reSDL in your wallet, which you get by staking and locking SDL. The more reSDL you have, the higher your status, which boosts your rewards and LINK staking allotment.

SDL is available on common decentralized exchange platforms for both Ethereum and Arbitrum mainnets.

Ethereum: DefiLlama Aggregator, KyberSwap and Uniswap

Arbitrum: Camelot

SDL rewards are derived from protocol fees from liquid staking products like stLINK. The effective reward rates depend on the pool's staked amounts and are calculated to ensure fair distribution based on SDL and LINK values.

For stLINK, the rewards are derived from Protocol Fees for each of the staking pools as follows:

• Node Operator Pool: 15%
• Community Pool: 5%

As of Feb 2024, Effective Reward Rates for native Chainlink staking for each pool are as follows:

• Node Operator Pool: ~12.37%
• Community Pool: 4.32%

As of Feb 2024, the Staked Amounts for each pool are as follows:

• Node Operator Pool: 1,125,000 LINK
• Community Pool: 165,250 LINK

The SDL Protocol Fees are then as follows:

• Node Operator Pool: 1,125,000 * 12.37% * 15% = 20,874.38 stLINK
• Community Pool: 165,250 * 4.32% * 5% = 356.94 stLINK
• Blended Rewards: 21,231.32 stLINK

As of Feb 2024, the SDL and LINK USD rates are approximately as follows:

• LINKUSD: 20.00
• SDLUSD: 0.60

As of Feb 2024 the reSDL supply is ~124,464,094. To calculate the reward rate for a four-year lock, the formula is:

• SDL Amount = reSDL / 9
• SDL USD Value = SDL Amount * SDLUSD
• Rewards USD = stLINK Rewards / reSDL Supply * reSDL Amount * LINKUSD
• Reward Rate = Rewards USD / SDL USD Value * 100

Therefore, the Blended SDL reward rate for a four-year lock is as follows:

• SDL Amount = 0.11 = 1 / 9
• SDL USD Value = 0.066 = 0.11 * 0.6
• Rewards USD = 0.00341 = 21,231.32 / 124,464,094 * 1 * 20
• Reward Rate = 5.17% = 0.00341 / 0.066 * 100