🎯Direct Staking

Direct Staking: Maximize APY, maintain transparency, and stake with control.

🔍 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. Base Stake Distribution:

   1. The Vault’s Total Value Locked (TVL) is initially distributed equally among all validators.

   2. For example, if the TVL is 1000K SOL and there are 100 validators, each validator will receive 10K SOL as undirected stake.

2. Using Kamino Multiply:

   1. A user deposits 10K SOL into Kamino Multiply and applies a 5x leverage.

   2. This results in an additional 50K SOL being added to the TVL, making the new TVL 1050K SOL.

3. Directing Stake to a Validator:

   1. The user then goes to The Vault dApp and directs their stake to a specific validator from the whitelist (e.g., Validator X).

   2. The stake bot ensures all validators continue to receive 10K SOL of undirected stake.

   3. Validator X, however, receives an additional 50K SOL as directed stake from the user.

4. 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.

📊 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 10K SOL from the pool.

• 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.