1. Introduction
Volo Liquid Staking provides a decentralized liquid staking solution on Sui. Key features include:
Instant Unstaking: Immediate redemption of staked SUI with no unbonding period
Decentralized Rewards: Fully on-chain reward calculation
Fee Rebate Mechanism: Redistributable unstaking fees that benefit remaining stakers
Weight-Based Delegation: Flexible validator management through weight allocation
2. How It Works
Users interact with Volo Staking through two simple actions:
Volo Staking generates yield from native Sui validator staking rewards. The protocol delegates user deposits to a set of validators on the Sui network, which earn staking rewards each epoch.
Reward Mechanism
vSUI is a reward-bearing token. Instead of distributing rewards directly, the value of vSUI increases over time relative to SUI through the exchange rate:
Exchange Rate=Total vSUI SupplyTotal SUI (Principal + Rewards) Example:
Day 1: Exchange rate = 1.00 → 1 vSUI = 1 SUI
Day 30: Exchange rate = 1.02 → 1 vSUI = 1.02 SUI
Users realize their yield when unstaking - they receive more SUI than they originally deposited.
3. Key Features
3.1 Instant Liquidity
With SIP-33 support, all staked SUI can be redeemed immediately without waiting for the next epoch. There is no unbonding period.
3.2 Decentralized Reward Calculation
Rewards are calculated entirely on-chain by reading validator exchange rates directly from the Sui system state.
3.3 Validator Weight Management
The protocol distributes SUI across multiple validators based on configurable weights:
Maximizes decentralization and security
Allows dynamic rebalancing based on validator performance
Supports up to 50 validators
3.4 Fee Structure
Fee charged when staking SUI
Fee charged when redeeming vSUI
Performance fee on staking rewards
A portion of the unstake fee can be redistributed back to the pool, generating extra yield for remaining stakers.
3.5 Boosted Rewards
The protocol can deposit additional SUI as boosted rewards to provide extra APY beyond the base staking yield.
3.6 Slashing Protection
In Sui's staking mechanism, a validator who receives a score of 0 from two-thirds of its peers will have its rewards slashed. Causes for slashing include:
Low operational performance
Poor community membership
Volo strictly monitors validator selection and status to minimize slashing risk. The protocol continuously evaluates validator performance and adjusts weights accordingly to protect user funds.
4. Architecture Overview
5. Access Control
Stake, Unstake, Trigger Rebalance
Set validator weights, Deposit boosted rewards
Update fees, Pause/unpause, Collect protocol fees
For detailed API documentation, see API Reference.
