Liquid Staking Process

A crucial aspect of any Liquid Staking project is the staking process.

For MilkyWay, the system is designed to be both efficient and secure. BABY holders can either hold their BABY on the MilkyWay blockchain or Babylon blockchain. Our front-end application will facilitate the IBC transfer.

Here’s a step-by-step breakdown of the procedure:

1. Initiation: When a user stakes BABY on MilkyWay — the BABY is transferred from Babylon to MilkyWay via IBC, then deposited into a CosmWasm Staking Contract.

2. Calculation and Minting: The contract calculates the amount of milkBABY to provide based on BABY's exchange rate. It then mints milkBABY and provides the user with milkBABY as a tokenized representation of the staked BABY coin. The milkBABY is sent to the user’s account.

Sounds simple and familiar right?

Now the user can use the milkBABY for other DeFi activities. But actually MilkyWay’s job continues when the user is merrily checking out various milkBABY usage options on our upcoming Discovery page.

1. IBC Transfer Message: The contract then sends the user’s BABY from Babylon to the Staker Multisig on Babylon.

2. Monitoring: The Coordinator tracks funds moving from MilkyWay to Babylon for MilkyWay transactions.

3. Stake: The Coordinator stakes uniformly across all MilkyWay’s validators on Babylon using the Grantee’s account.