What is stAVAX

stAVAX (Staked AVAX) is a yield-bearing liquid staking token that represents your staked AVAX within the Hypha ecosystem. It is designed as an ERC-4626 tokenized vault, a DeFi standard that makes it highly composable and easy to integrate with other protocols.

The core purpose of stAVAX is to solve the liquidity problem of traditional staking. It allows you to earn comprehensive yields from the Avalanche network while keeping your funds liquid, meaning you can trade, lend, or use your staked position in DeFi applications without locking your AVAX.

How It Works

When you stake AVAX into Hypha on the C-Chain, you receive an equivalent amount of stAVAX based on the current exchange rate. The protocol then securely transfers these funds to Avalanche's Platform Chain (P-Chain).

On the P-Chain, your AVAX is put to work by validating the network through a group of high-performance validators. A portion of these validator nodes may also opt-in to perform MEV (Maximal Extractable Value) to capture additional profit.

By combining these strategies, the underlying pool of AVAX earns yield from multiple sources. As this yield is collected, the total assets in the vault increase, which means the value of each stAVAX token you hold grows over time in relation to AVAX. For example, you might eventually be able to redeem 1 stAVAX for 1.2 AVAX.

The protocol runs on continuous 15-day staking cycles. Funds are staked on the P-Chain to earn validation rewards, then transferred to the C-Chain vault at the end of each cycle. Over the following 15 days, these rewards are streamed to the stAVAX contract, automatically raising the AVAX value of all stAVAX. This creates a seamless loop where new staking begins as previous rewards are added, ensuring stAVAX steadily appreciates against AVAX.

Protocol Fee

The protocol charges a fee on the staking rewards generated from AVAX deposited into the stAVAX vault. This fee is determined by the ProtocolDAO and is deducted before rewards are distributed to stAVAX holders.

• How It Works

  • The ProtocolDAO sets the fee rate, expressed in basis points (bps).

  • When staking rewards are deposited into the stAVAX vault, the protocol automatically calculates the fee as a percentage of those rewards. The deducted amount is sent to the ProtocolDAO.

  • The remaining rewards stay in the vault and compound, increasing the value of stAVAX.

    • Example

      • If 100 AVAX worth of rewards are earned and the fee rate is set to 10% (1000 bps):

      • Fee deducted: 100 AVAX × 10% = 10 AVAX

      • 10 AVAX is transferred to the ProtocolDAO

      • 90 AVAX remains in the vault, compounding into stAVAX