Volo Liquid Staking Overview

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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

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2. How It Works

User Actions

Users interact with Volo Staking through two simple actions:

Action	Input	Output
Stake	SUI	vSUI
Unstake	vSUI	SUI

Yield Source

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:

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.

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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 Type	Description
Stake Fee	Fee charged when staking SUI
Unstake Fee	Fee charged when redeeming vSUI
Reward Fee	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

• Malicious behavior

• 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.

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4. Architecture Overview

┌─────────────────────────────────────────────────────────────┐
│                        StakePool                            │
│                                                             │
│   ┌─────────────────────────────────────────────────────┐   │
│   │                  ValidatorPool                      │   │
│   │                                                     │   │
│   │    Validator A ──┬── Weight: 40%                    │   │
│   │    Validator B ──┼── Weight: 35%                    │   │
│   │    Validator C ──┴── Weight: 25%                    │   │
│   │                                                     │   │
│   └─────────────────────────────────────────────────────┘   │
│                                                             │
│   Fee Config │ Boosted Rewards │ Protocol Fees              │
└─────────────────────────────────────────────────────────────┘
         │                              │
         ▼                              ▼
┌─────────────────┐            ┌─────────────────┐
│ Metadata<CERT>  │            │ SuiSystemState  │
│ (vSUI Supply)   │            │ (Validators)    │
└─────────────────┘            └─────────────────┘

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5. Access Control

Role	Permissions
User	Stake, Unstake, Trigger Rebalance
Operator	Set validator weights, Deposit boosted rewards
Admin	Update fees, Pause/unpause, Collect protocol fees

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For detailed API documentation, see API Reference.