How it works

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

Token model

• Input: Users deposit SOMI.

• Output: Protocol mints stSOMI at the current exchange rate.

• Compounding: Rewards are claimed from validators and re‑staked. This increases the SOMI-per-stSOMI exchange rate.

Instant mint & redeem

Somnia’s architecture allows instant staking & instant unstaking for Lair’s contracts, so users get immediate stSOMI on stake and immediate SOMI on redeem (minus any applicable fees).