stCHZ is an ERC-20 liquid staking token (LST) that represents the CHZ users have deposited in Kayen’s liquid staking protocol.
But what’s the material difference between stCHZ and CHZ? What exactly changes when you deposit CHZ into Kayen, how do you get started with liquid staking, and what could you earn?
Let’s answer these questions and others to address any confusion users might still have about stCHZ.
What changes when you liquid stake?
Liquid staking involves staking CHZ through Kayen and receiving the corresponding value in stCHZ tokens. While your underlying CHZ is staked, your stCHZ remains transferable and can be traded on supported exchanges, provided there is sufficient liquidity.
This is the key difference between the two tokens, and indeed between liquid staking and native staking. With native staking, you earn rewards by staking your tokens, but they are typically unavailable for other uses until you unstake them. Liquid staking gives you more flexibility by issuing an LST that represents your staked position.
In the case of liquid staking on Kayen, CHZ is delegated to selected CHILIZ® Chain validators and accrues network staking rewards. Whereas stCHZ representing the CHZ stake is yours to do with as you please. You can hold it in your wallet, transfer it, trade it on supported markets, or use it to provide liquidity in compatible pools.
So, what changes when you liquid stake? In practical terms, not a lot. Instead of holding CHZ directly, you hold stCHZ representing your staked position. Your CHZ earns staking rewards through the protocol, while your stCHZ gives you the flexibility to hold, transfer, or trade your position.
One important thing to remember is that you’ll need stCHZ to redeem your underlying CHZ through Kayen. If you’ve traded or transferred your stCHZ, you’ll need to get the required amount back before you can unstake through the protocol.
For more information on stCHZ, read our step-by-step guide: What is stCHZ?
How to start liquid staking CHZ in 3 steps
Now that you’re familiar with liquid staking, how do you actually go about deploying CHZ into Kayen’s protocol?
Step 1: Connect to the Kayen liquid staking interface using a wallet that supports CHILIZ® Chain. Make sure you have CHZ in your wallet.
Step 2: Liquid stake CHZ. Simply enter the amount you want to liquid stake. The minimum deposit is 0.01 CHZ.
Step 3: Approve the transaction. After reviewing the details, simply confirm/approve the transaction in your wallet, whereafter your CHZ will be deposited into Kayen’s liquid staking protocol on CHILIZ® Chain and you’ll receive stCHZ in return. Just make sure you have enough CHZ left in your wallet to cover the network transaction fee.
For a deeper dive on liquid staking CHZ and managing stCHZ, read our in-depth guide.
What you could earn from liquid staking CHZ?
To consider what you might earn from staking CHZ, we must take account of both the exchange rate and the governance APR.
The amount of stCHZ you receive depends on the protocol’s current exchange rate, which is calculated using on-chain data. This exchange rate is designed to increase over time as staking rewards accumulate and are automatically restaked. However, the actual rate of growth depends on factors such as protocol fees, validator performance, and CHILIZ® Chain’s staking conditions.
Unlike staking systems that distribute rewards as additional tokens, Kayen reflects staking rewards through the stCHZ exchange rate. This means the number of stCHZ tokens in your wallet stays the same, while each token can gradually become redeemable for more CHZ as rewards accumulate.
Suppose you deposit 100 CHZ and receive 95 stCHZ. A year later, you will still hold exactly 95 stCHZ. However, although the number of tokens in your wallet has not changed, those tokens may now be redeemable for more than 100 CHZ since staking rewards have accumulated and compounded.
For example, at the current APR of 13.28%, staking 100 CHZ for one year could earn you 13.28 CHZ in rewards, bringing your total to 113.28 CHZ. This is just an illustration, assuming a constant annual return and excluding fees and the effects of compounding. Actual rewards will vary depending on network conditions, validator performance, and protocol fees.
How long does unstaking take?
When you choose to unstake, there is a 2-3 day unbonding period before you receive your CHZ. This is the standard CHILIZ® Chain withdrawal timeframe.
To unstake, simply visit Kayen’s staking portal, connect your wallet, select the amount you wish to withdraw, and approve the transaction in your wallet.
Don’t want to wait? You may also be able to swap stCHZ for CHZ through the stCHZ/CHZ liquidity pool on Kayen, provided there’s sufficient liquidity available. Just bear in mind that swaps take place at the current market rate, which may differ from the protocol’s redemption rate. Swap fees and slippage can also affect the amount of CHZ you receive.
READ MORE: How to Withdraw CHZ from Kayen
FAQ
1. What is stCHZ?
stCHZ is the liquid staking token you receive when you deposit CHZ into Kayen. It represents your staked CHZ and remains freely transferable and tradeable on supported markets.
2. Can I access CHZ during staking?
Not directly. Your underlying CHZ is committed to staking, but your stCHZ remains transferable and can be traded where liquidity is available.
3. How do I liquid stake CHZ?
Connect your wallet to Kayen’s liquid staking interface, enter the amount you wish to stake, and approve the transaction.
4. What can I do with stCHZ?
You can hold it, transfer it, trade it, or provide liquidity with it in compatible pools. One option is to pair it with CHZ in a Kayen pool to potentially earn a share of swap fees on top of staking rewards.
5. What can I earn by staking CHZ?
Staking rewards depend on the current APR, which can change over time. Your actual earnings will depend on network conditions, validator performance, and applicable protocol fees.
6. How do I get my CHZ back?
To unstake through Kayen, you’ll need to redeem your stCHZ for CHZ through the protocol and wait for the applicable unbonding period. Alternatively, you may be able to swap stCHZ for CHZ through a supported liquidity pool without waiting, depending on available liquidity.
The Kayen Protocol has been developed by a third-party independent firm, and not affiliated with, the Chiliz Group. The Chiliz Group does not hold any stake in, control, audit, or operate the Kayen Protocol in any way. This marketing communication is for informational purposes only and does not constitute an endorsement by the Chiliz Group, financial or investment advice, or a solicitation or offer to buy or sell any crypto-assets. Terms and conditions apply.
