We’re continuing our Core Protocol series where we explain the key parts of Reporting, Staking, Decision-Making Body and Rewards. This time we’ll cover Staking.
The objective of the Lossless Core Protocol is to provide an extra security layer in order to prevent fraudulent token movement and recover fraudulently taken tokens. This functionality is available to all the tokens that follow the LERC20 standard. Core Protocol exists alongside the Vault and Treasury Protection Protocol.
There are three main tasks that take part in Core Protocol and one extra task that while it’s not essential, it serves as a booster to provide more visibility and urgency to a certain report.
The three principal tasks can be broken down into:
- Report Generation
- Report Investigation and Solving
- Stolen funds refunding and Reward distribution
The extra step available to the community, while extremely useful, is not necessary for a report to be processed:
- Report Staking
Report Staking
As soon as the report is generated, the community stakers can proceed to perform their own research over the address that has been marked as illegitimate. This is up to each staker to decide to stake or not but it’s highly recommended, in order to prevent the loss of $LSS tokens, not to stake indiscriminately.
When the research is done or stakers are sure about a report's legitimacy a stake can be placed using a report ID. The staking amount is a static value, set in the Lossless Staking Smart Contract.
The stakers rewards will be assigned only if a report is solved positively, otherwise the staked amount gets taken.
The rewards distribution mechanism can be summarised by the following: “The earlier someone stakes, the more rewards for the staker in the case of a verified hack“.
The objective of this condition is to give more value to the first stakers that took the time to investigate and stake rather than jumping to a bandwagon after the information over a report has already been made public and widely known.
Rewards
After the report is resolved positively stakers get back their initial staked amount plus the reward amount. 2% of all the tokens that were stolen and stopped by the report is distributed to all the stakers. Stakers that staked earlier get a higher percentage of this reward pool and stakers that staked later get a smaller percentage of the reward pool.
Next time, we will cover the Decision-Making Body’s role and responsibilities.
About Lossless
Lossless is the world’s first DeFi hack mitigation tool for token creators. Apart from our known cyber security solutions and renowned professionals, the community also plays a role. With a tangible reward system, community members are also encouraged to explore new ways to detect hacks and fraudulent transactions.
Our protocol halts counterfeit transactions through various methods of fraud identification and automatically reverses any stolen tokens back to the original owner. Our solutions to the impending problems of cyber theft within the blockchain space are thorough and applicable within many protocols.
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