Understanding wsTON: A Liquid Staking Solution for the Tokamak Network

Introduction

Staking has always been a crucial mechanism in blockchain networks, enabling token holders to participate in securing the network while earning rewards. However, traditional staking comes with a significant drawback—lack of liquidity. When users stake their tokens, they become illiquid, meaning they cannot use them in DeFi applications or transfer them freely.

To solve this, the Tokamak Network introduces wsTON (Wrapped Staked TON), a liquid staking token that enhances the usability of staked TON. This article explores wsTON, how it differs from simple TON staking, and its advantages within the Tokamak ecosystem. We’ll also compare wsTON to other liquid staking solutions like Lido’s wstETH.

What is wsTON?

wsTON (Wrapped Staked TON) is an indexed staking token representing staked TON. Unlike simple staking, where rewards are distributed separately, wsTON integrates staking rewards into its value over time. The formula governing wsTON’s issuance and staking index ensures that users receive an appreciating token rather than passive rewards.

How is wsTON Different from Simple TON Staking?

1. Traditional TON Staking

• Users deposit TON into a staking contract.
• The staked TON earns rewards over time.
• Users must claim and restake rewards manually to maximize yield.
• Tokens remain locked and cannot be used in DeFi applications.

2. wsTON Staking

• Users deposit TON/WTON and receive wsTON, which represents their staked assets.
• wsTON increases in value instead of distributing separate rewards.
• No need for manual reward claims or compounding.
• wsTON remains liquid and transferable, allowing users to trade or use it in DeFi while still benefiting from staking.