🪙blkETH & wblkETH

Blackholes's Liquid Staking Token is available in a rebasing (blkETH) and non-rebasing version (wblkETH), to fit all use cases.

To accommodate all use scenarios, Blackhole's Liquid Staking Token is offered in both rebasing (blkETH) and non-rebasing (wblkETH) versions. It is made to make integrations with programs that support stETH or wstETH easier, similarly to Lido's liquid staking tokens.

📈 How Liquid Stakers use blkETH

blkETH is fundamentally a receipt token. One blkETH is created and refunded to the Liquid Staker upon depositing one ETH.

The Liquid Staker's blkETH balance increases to mirror the underlying ETH balance as Ethereum blocks are created and Staking Rewards are earned. Every day, the blkETH balance of the Liquid Staker will automatically update to reflect the deposited ETH amount as well as any associated Staking Rewards.

⛩️ The "bridging" mechanism is the Blackhole Smart Contract. It returns a blkETH receipt that may be used to later withdraw those ETH along with any staking rewards it may have generated, and it deposits ETH into Ethereum Consensus Layer validators.

All that blkETH is, is a receipt token that lets its owner take out the appropriate ETH without authorization. There is no pegging mechanism or "stablecoin" to ensure that it will trade 1:1 with the underlying ETH.

Through the Blackhole smart contract, blkETH can be unstaked at any moment by requesting a withdrawal and getting the underlying ETH once the transaction is processed.

Example of blkETH Staking

• A Liquid Staker deposits 1 ETH into the Blackhole Smart Contract and obtains 1 blkETH in their wallet.

• 1 year later, the Staking Rewards have been 5% and the Liquid Staker sees 1.05 blkETH in their wallet.

• 2 years later, it returns 5% more, so those 1.05 blkETH further become 1.1025 blkETH.

• The Liquid Staker decides to withdraw (un-stake) the 1.1025 blkETH with the Blackhole Smart Contract and obtains 1.1025 ETH in return.

An illustration of the blkETH accounting mechanism and staking

Being a rebasing token, blkETH updates the holder's blkETH balance every day to reflect the precise amount of underlying ETH staked through Blackhole. Lock-ups and minimum deposits are not present. Blackhole is made to operate in a completely permissionless and non-custodial manner.

The Staking Rewards can be automatically reflected in blkETH balances because to this technique.

Non-rebasing models are used by certain other protocols, which are more akin to wblkETH. In order to strengthen its status as a receipt token and make its use more simple, Blackhole uses the rebasing paradigm, which eliminates the need for Liquid Stakers to estimate any inferred value.

📦 The option to wrap wblkETH

A non-rebasing static-balance token is preferable in some situations, when the automatically updating balance of blkETH is not optimal. This is true for some accounting use cases and DeFi protocols. As a non-rebasing token, the Blackhole permits Liquid Stakers to convert their blkETH into wblkETH for this reason.

Users can "wrap" blkETH (dynamic balance) into wblkETH (static balance) and vice versa using the Blackhole Smart Contracts.

The wblkETH balance is not updated every day and does not fluctuate over time.

The ETH balances in your wallet are not updated automatically; they are static. Rather, wblkETH may only be redeemed by withdrawing into ETH or unwrapping into blkETH in order to receive the associated ETH + staking profits.

A wblkETH staking example

• A Liquid Staker deposits 1 ETH into the Blackhole Smart Contract and obtains 1 blkETH in their wallet.

• They wrap 1 blkETH to obtain 1 wblkETH. (This exchange rate is not fixed 1:1).

• 1 year later, the Staking Rewards have been 5%. They still has 1 wblkETH, but it is now worth 1.05 ETH, as the underlying ETH increased from the staking rewards.

• 2 years later, they still have 1 wblkETH but it's now worth 1.1025 ETH.

• They decides to unwrap the 1 wblkETH, and obtains 1.1025 blkETH.

• The 1.1025 blkETH is withdrawn (un-staked) with the Blackhole Smart Contract and becomes 1.1025 ETH.

WblkETH was created to make it easier to integrate with the larger Ethereum ecosystem and to make blkETH more composable.

wblkETH as opposed to blkETH

The wblkETH balance will stay constant until it is unwrapped into a blkETH receipt token or further redeemed for its underlying ETH, in contrast to the blkETH balance, which will constantly update in the token holder's wallet.

Liquid staking payouts can be easily generated by Liquid staking users depositing their ETH into Ethereum's Consensus Layer through these two flexible options.