Getting Started
Learn about the Cora Leverage Staking Protocol
Cora is a decentralized, permissionless, oracle-less leverage staking protocol that allows users to earn higher Ethereum staking rewards for a fixed period of time by introducing a novel financial contract called: Non Fungible Leverage Staking Tokens.
Non fungible leverage staking tokens are NFT representations of leverage positions and include:
Maturity date
Leverage factor
Lending rate
Position size
How it works
There are 2 main ecosystem participants:
Suppliers
Leveragers
Suppliers are ETH holders who are willing to stake and lend their staked ETH for a fixed rate over a fixed period of time under their own terms. This is because in Cora, suppliers set the desired fixed interest rate and maturity.
Cora incentivises suppliers to lend their assets by running native Cora token emissions as rewards for their liquidity. These emissions depend on the amount of liquidity and utilisation levels.
The goal of the token emissions is to reward suppliers that set attractive values, so their liquidity is matched to leveragers and potentially in the future directly to validators.
Suppliers simply deposit ETH to the liquidity pool and then a position is created.
The best way to imagine what happens when a supplier deposits into a liquidity pool is to visualise an order book with all the positions ordered by interest rate and maturity.
Leveragers are ETH or LST holders who want to increase their Ethereum staking rewards for a fixed period of time.
Leveragers can take any leverage level as long as they have enough funds to cover the fixed-rate debt at leverage time. This doesn't mean the debt is paid upfront but guarantees suppliers that the debt can be paid at the maturity date.
Leveragers select a leverage factor and a maturity date, then the protocol will find the most attractive interest rates across all the suppliers' positions and create a leveraged position.
Leveragers will obtain a non-fungible token representation of their leveraged position that can be traded or used as collateral in other protocols.
At maturity, the leverage position will be automatically settled, including repaying the fixed debt to suppliers and taking the remaining rewards.
Example:
Alice (a supplier) is an ETH holder and wants to access the best staking rates in the liquid staking universe and earn liquidity incentives from the Cora protocol by lending their staked ETH or LST.
The highest staking APR at supply time is expected to be ~5.5%.
She deposits 100 ETH and predicts that the APR may decrease over time or she simply is looking for certainty on her expected returns. So she is willing to lend her staked ETH for a fixed rate over a fixed period of time. In other words, she is willing to enter into an interest rate swap, converting their unpredictable ~5.5% into a fixed annual rate of 5.4%.
Bob (a leverager) wants to leverage his LSTs, he can simply come to Cora and open a leverage staking position by selecting a leverage level (that will be limited by its deposit amount) and a maturity date.
He deposits 10 rETH, selects a leverage level of 10x and a maturity date of June 30, 2023, getting immediate access to the staking rewards of 100rETH till the maturity date without paying any capital upfront.
Once he opens a position he will get a non-fungible leverage staking token.
Considering that Alice previously set the fixed rate at 5.4%, this is the commitment Bob is accepting, he essentially guarantees to pay that capital at maturity.
Let's imagine that at the maturity date, the average APR is 5.6%, this means he will end up earning 7.4% instead of 5.6%, increasing his staking rewards by 32.14%.
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