Stake Hub contract manages the bonding/unbonding of Luna, minting/burning of Stake, and reinvestment of staking rewards.
Unlike Lido's stETH, the Stake token does not rebase; instead, the exchange rate between Luna and Stake increases (i.e. each Stake becomes worth more Luna) as staking rewards are harvested, and reduces if validators are slashed.
The exchange rate, as defined by the amount of uluna redeemable per ustake, is calculated as
exchange_rate = total_uluna_staked / total_ustake_supply
Unlocked coin refers to coins held by the Stake Hub contract (referred to as "the contract" hereafter) that can be reinvested. The contract tracks the amounts of unlocked coins using a Vec<cosmwasm_std::Coin> variable stored under the unlocked_coins key.
Each time the Hub contract delegates to or undelegates from a validator, the claimable staking rewards are automatically transferred to the contract. The amounts of coins transferred are recorded in the coin_received event. When handling the response, the contract parses this event and updates the unlocked_coins variable accordingly.
When harvesting, the contract needs to swap Terra stablecoins into Luna. the contract offers all unlocked coins that have exchange rates defined against Luna to be swapped, and deduct them from unlocked_coins accordingly. When handling the response, the contract parses the swap event and increments the unlocked Luna amount.
Cosmos chains, by default, has a limit of 7 undelegations at a time per validator-delegator pair. In order to support unbonding requests from many users, the contract needs to bundle unbonding requests together and submit them in batches.
For mainnet, the contract will submit a batch every 3 days, such that there are at most 7 undelegations at a time with each validator. This 3 day interval is defined by the epoch_period parameter.
During the 3 day period, the contract accepts unbonding requests from users and store them in an IndexedMap data structure under the unbond_requests key, and the aggregated properties of the pending batch under the pending_batch key. Each user's share in the batch is proportional to the amount of Stake tokens the user requests to burn.
At the end of the 3 day period, anyone can invoke the ExecuteMsg::SubmitUnbond function to submit the pending batch to be unbonded. The contract calculates the amount of Luna to unbond based on the Luna/Stake exchange rate at the time, burns the Stake tokens, and initiates undelegations with the validators.
At the end of the following 21 day unbonding period, the user can invoke the ExecuteMsg::WithdrawUnbonded function. The contract pulls all of the user's unclaimed unbonding requests, and refunds appropriate amounts of Luna based on the each request's share in that batch, to the user.
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