🎯 Direct Staking

🔍 Overview

The Vault on Solana is a stake pool that allows users to stake their SOL in a decentralized and transparent manner. Users have the ability to delegate their stake to a list of whitelisted validators through a process called Direct Staking. This document explains how direct staking works and its impact on the pool.

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🔗 How Direct Staking Works

📌 Step-by-Step Process

1. Directing Stake to a Validator:

   1. The user then goes to The Vault dApp and directs their wallet to a specific validator from the whitelist. In this example, Validator X.
   2. All vSOL that resides in the wallet which has been direct staked to Validator X will be used.
   3. The stake bot ensures that specific validator will receive the amount of vSOL that was directed to it.

2. Leveraged Staking and APY:

   1. When users deposit vSOL into Kamino Multiply, they borrow SOL to multiply their staking position.
   2. This functions similarly to manual leverage where users:
      1. Deposit SOL → Get vSOL → Borrow SOL → Deposit Borrowed SOL → Get More vSOL → Repeat.
   3. This results in a higher APY for the user, as their exposure to staking rewards increases.
   4. The user will be able to see the Kamino amounts on their direct stake dashboard once they connect their wallet. There may be a delay in between updates for this data.

📊 Impact of Direct Staking

• Increased Validator Weighting:
  • Large direct stake deposits (leveraged or not) will shift the percentage of total TVL assigned to a validator.
  • However, all validators still receive the same base amounts from the direct stake leader and elite performance programs.
• Transparency & On-Chain Data:
  • The Vault maintains full transparency regarding validator stakes.
  • Users can track stake distribution via:
    • Validator Metrics Page
    • Public Repositories:
      • Stakebot Data
      • Holdings Data

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🏁 Conclusion

Direct Staking in The Vault provides users with enhanced control over their stake while maintaining a fair and transparent distribution model. Through leveraged staking via Kamino Multiply, users can maximize APY, and all staking activity remains fully on-chain and auditable.