Yield Layer
Within StakeStone’s Crypto-native Neo Bank, the Yield Layer serves as the central bridge connecting onchain assets with underlying yield sources.Our Yield Layer supports two implementation paths based on asset type:
For non-yield-bearing assets such as BTC and stablecoins, StakeStone employs a combination of smart contracts, custodial infrastructure, and multi-exchange strategies to convert deposits into onchain, verifiable yield-bearing tokens: STONEBTC and STONEUSD. Automated mechanisms manage yield distribution, NAV updates, and synchronized settlement across various execution layers (L2s, centralized exchanges, and custodial venues).
For natively yield-bearing assets such as ETH, StakeStone utilizes staking and restaking protocols through smart contracts to generate native onchain yield. Returns are represented and settled via STONE (StakeStone Ether), a yield-bearing token.
STONEUSD/STONEBTC
1. Deposit & Mint
After completing on-chain KYC/KYB verification, users can deposit stablecoins (e.g., USDC, USDT) or wrapped BTC (e.g., BTCB) into their yield-bearing accounts.All deposit transactions are routed through the StakeStone Router Contract, which aggregates incoming funds and allocates them to the corresponding Custody Wallet and Strategy Pools based on the system’s yield optimization logic.Once the deposit is confirmed, the smart contract executes the minting process:
Based on the current Exchange Rate (denoted as R), the contract mints a corresponding amount of LP tokens (STONEUSD or STONEBTC) serving as yield-bearing certificates.
The user’s holdings of STONEUSD or STONEBTC represent their share of the total yield pool, redeemable at any time.
The Exchange Rate updates periodically based on realized yields from custody and execution layers, forming a transparent and traceable on-chain yield record.
2. Delegation & Strategy Execution
Once funds enter the custodial layer, the system automatically allocates them across multiple yield sources according to predefined strategies:
Ceffu Custody Accounts: Serve as the primary liquidity pool, receiving and redistributing funds from multiple users.
Exchange Accounts (Binance, OKX, Bybit, etc.):
Funds are mirrored automatically from custody to exchange sub-accounts (e.g., A-1, A-2, A-3, B-1, B-2, B-3…).
Each sub-account may correspond to a distinct strategy execution unit, presently dedicated to neutral arbitrage strategies.
Yield Distribution Logic:
Arbitrage partners or exchanges periodically update performance metrics, including PnL, interest, and fees.
Smart contracts perform scheduled on-chain settlements to distribute yields proportionally and transparantly.
Following each settlement period, the system issues an Exchange Rate Update, updating new data to the main contract, ensuring STONEUSD / STONEBTC values are accurately reflected in the next cycle.
3. Withdrawal & Settlement
When a user initiates a withdrawal, the system redeems assets based on the latest Exchange Rate and coordinates onchain settlement by recalling funds from custody and exchange accounts.
Withdrawal Request & Verification:
Users submit withdrawal transactions via smart contract. The system verifies their KYC status, the STONEUSD / STONEBTC balance and compliance limits, and generates a unique Request ID for the redemption order.
Exchange Rate Calculation & On-chain Snapshot:
The contract determines the redemption amount using the current Exchange Rate and performs an onchain snapshot to ensure consistency between the redemption value and the current accounting cycle.
Custody Undelegation & Fund Return:
The backend server calls custodial platform's (e.g., Ceffu) APIs to execute undelegation of funds. Exchange sub-accounts (Binance, OKX, etc.) automatically close market-neutral arbitrage positions, after which funds are transferred back to the main custodial wallet.
Settlement & Distribution:
Custodians send back yield and fund settlement data to the system, which then issues an Exchange Rate Update. The smart contract burns the corresponding STONEUSD / STONEBTC and releases the equivalent underlying assets to the user’s wallet.
Settlement Archival & Risk Synchronization:
The backend records a settlement snapshot for the current cycle, while the risk management module updates liquidity pool and liquidity coverage ratio, completing the redemption feedback loop.
4. Cross-layer Coordination & Safeguards
The Yield Layer within StakeStone’s Crypto-native Neo Bank is a multi-layered, multi-strategy execution network designed for both efficiency and transparency.
L1: STONE token issuance, Exchange Rate and Settlement;
L2/ App Chains: Distribution of yield bearing tokens through liquidity pools;
Custodial & Exchanges: Yield generation and asset security;
AI Risk Engine: Continuously monitors fund movements and yield volatility within custody accounts.
This design allows StakeStone to operate a multi-layered yield generation network with transparency on-chain, efficiency off-chain, and seamlessly coordinated across all layers.
STONE (StakeStone Ether)
Within StakeStone’s Crypto-native Neo Bank architecture, STONE (StakeStone Ether) serves as the yield-bearing token for Ethereum-native assets (ETH).Unlike STONEUSD and STONEBTC, which depend on custodial infrastructure and cross-layer settlement, STONE’s yield is generated onchain from staking and restaking protocols within the DeFi ecosystem. The entire process, from yield generation and distribution to Exchange Rate synchronization, is executed onchain through smart contracts.
Users deposit ETH directly into the StakeStone smart contract, where the StakeStone Vault acts as a liquidity buffer, temporarily receiving deposited ETH to optimize capital utilization and operational efficiency.Upon deposit, the protocol automatically executes the minting of STONE, while the deposited ETH remains in the Vault. Once the aggregated deposits meet the deployment threshold, StakeStone Vault allocates and deploys funds to various Strategy Pools:
The number of STONE (StakeStone Ether) tokens minted is determined by the current Exchange Rate (R-value);
STONE represents the user’s share of the ETH yield pool and remains redeemable at any time;
The Exchange Rate updates periodically to reflect underlying staking and restaking yield rate changes, maintaining an on-chain yield record.
This architecture guarantees that deposits begin earning yield upon deposit while preserving transparency and smart contract security.
Once assets are deployed to the Yield Layer, the system distributes funds among multiple Strategy Pools based on pre-determined allocation logic set by the on-chain governance module OPAP, balancing yield generation and security:
Base Staking Layer:
ETH is delegated to leading Ethereum staking pools or validator operators to earn native PoS rewards and transaction fees.
Restaking Layer:
By integrating restaking protocols such as EigenLayer and Symbiotic, ETH is restaked into distributed security networks to obtain additional yield.
Yield Settlement & Distribution:
Yield data from each Strategy Pool is automatically consolidated and reported to the main contract, which performs unified settlement and produces an Exchange Rate Update.
OPAP Strategy Mechanism:
The underlying yield strategy of STONE is managed entirely by the On-chain Proposal Allocation Protocol (OPAP) to ensure transparency and decentralized governance. Any modification to base strategies requires approval through a vote by STONE holders before implementation.
When a user requests to redeem STONE, the protocol calculates the amount of ETH to be withdrawn based on the current Exchange Rate and proceeds through the settlement logic:
The contract determines the redeemable asset value according to the Exchange Rate. If the Buffer Pool balance is sufficient, the user can use the “Instant Withdrawal” option to withdraw ETH immediately from the buffer pool.
If the Buffer Pool balance is insufficient, the user can initiate a “Request Withdrawal”. The withdrawal request becomes claimable after the protocol completes unstaking operations, secures sufficient redeemable liquidity, and finalizes the next settlement cycle. The user can then claim their withdrawal.
Whether "Instant Withdrawal" or "Request Withdrawal", the contract burns the corresponding STONE and releases an equivalent amount of ETH, including both principal and accrued yield.
All settlement actions and records are executed fully on-chain, remaining traceable, verifiable, and auditable.
Last updated