> For the complete documentation index, see [llms.txt](https://lair-finance.gitbook.io/lair-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://lair-finance.gitbook.io/lair-finance/liquid-re-staking-somnia/stsomi-overview.md).

# stSOMI Overview

### Introduction

stSOMI is Lair's liquid staking solution for the Somnia blockchain, enabling users to stake SOMI tokens while maintaining liquidity through yield-bearing stSOMI tokens.

### What is stSOMI?

stSOMI is a yield-bearing token that represents your staked SOMI plus accumulated staking rewards. When you stake SOMI through Lair, you receive stSOMI tokens that automatically increase in value over time through compound interest.

### How does liquid staking work?

When you stake SOMI through Lair, you receive stSOMI tokens. These tokens can be freely transferred, traded, or used in DeFi while your original SOMI continues earning staking rewards in the background.

### What makes stSOMI different from regular staking?

* **Liquidity**: Use your staked assets in DeFi
* **Auto-compounding**: Rewards are automatically reinvested
* **Simplified UX**: No need to manually claim and restake rewards

### How can I track my earnings?

Your earnings are reflected in the increasing value of your stSOMI. Multiply your stSOMI balance by the current exchange rate to see your total value in SOMI terms.

### Key Features

* **🌊 Liquid Staking**: Maintain liquidity while earning staking rewards
* **📈 Auto-compounding**: Rewards are automatically reinvested for compound growth
* **🔐 Secure Delegation**: Whitelisted validator pool with minimum delegation guarantees
* **💰 DeFi Compatible**: Use stSOMI across Somnia's DeFi ecosystem

### The Staking Process

1. **Stake SOMI**: Deposit your SOMI tokens into Lair's staking contract
2. **Receive stSOMI**: Get stSOMI tokens based on the current exchange rate
3. **Earn Rewards**: Your stSOMI automatically accumulates value through staking rewards
4. **Use in DeFi**: Utilize stSOMI in lending, DEXs, and other DeFi protocols
5. **Unstake Anytime**: Convert stSOMI back to SOMI instantly when needed

### Exchange Rate Mechanism

The stSOMI:SOMI exchange rate starts at 1:1 and increases over time as staking rewards accumulate:

* **Initial Rate**: 1 stSOMI = 1 SOMI
* **After Rewards**: 1 stSOMI > 1 SOMI (includes accumulated rewards)
* **Compound Effect**: Rate increases continuously through auto-compounding


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