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. The following diagram provides a visual representation of MilkyWay's liquid staking process.

INIT holders can either hold their INIT on our Initia L2 or other blockchains. 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 INIT on MilkyWay — the INIT is transferred from Initia L1 to our Initia L2 via IBC, then deposited into a CosmWasm Staking Contract.

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

Sounds simple and familiar right?

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

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

2. Monitoring: The Coordinator tracks funds moving from our Initia L2 to Initia for MilkyWay transactions.

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