Understanding rSTS

The rSTS (Rebasing Stasis Token) is the core token of the Stasis protocol. This guide helps you understand how it works, why it's valuable, and how to manage it effectively.

What is rSTS?

Basic Definition

rSTS is an ERC-20 token that represents your share of the Stasis vault. Unlike traditional tokens with fixed values, rSTS automatically increases in value over time as the vault generates yield.

Key Characteristics

  • Yield-Bearing: Automatically accrues value from vault performance

  • Auto-Compounding: No manual claiming required

  • Liquid: Can be redeemed for USDC anytime

  • Transferable: Standard ERC-20 token functionality

  • Transparent: Value always visible on-chain

How rSTS Works

Value Accrual Mechanism

Exchange Rate Formula

rSTS Exchange Rate = Total Vault Value (USDC) / Total rSTS Supply

Example:
- Vault Value: $1,060,000 USDC
- rSTS Supply: 1,000,000 rSTS
- Exchange Rate: 1.06 USDC per rSTS

Automatic Appreciation

Day 1: 1 rSTS = 1.000 USDC
Day 30: 1 rSTS = 1.005 USDC (+0.5%)
Day 365: 1 rSTS = 1.060 USDC (+6.0%)

Yield Generation Process

Step-by-Step Flow

  1. Vault Earns Yield: Through funding rate arbitrage

  2. Vault Value Increases: Total USDC value grows

  3. Exchange Rate Improves: Each rSTS worth more USDC

  4. Your Holdings Appreciate: Automatic value increase

No Action Required

  • No Claiming: Yield is built into token value

  • No Staking: Simply hold the tokens

  • No Compounding: Happens automatically

  • No Fees: No transaction costs for yield accrual

rSTS vs. Other Token Models

Comparison with Traditional Yield Tokens

Manual Claiming Tokens

Traditional Model:
1. Deposit assets
2. Receive fixed amount of tokens
3. Earn separate reward tokens
4. Manually claim rewards
5. Pay gas fees for claiming
6. Manually reinvest for compounding

rSTS Model:
1. Deposit USDC
2. Receive rSTS tokens
3. Token value increases automatically
4. No claiming needed
5. No gas fees for yield
6. Automatic compounding

Rebasing Tokens

Rebasing Tokens:
- Token quantity changes
- Price stays constant
- Complex tax implications
- Wallet display issues

rSTS:
- Token quantity stays constant
- Price increases over time
- Simpler tax treatment
- Clear wallet display

Benefits of rSTS Design

User Experience

  • Simplicity: Just hold the token

  • Clarity: Easy to track value

  • Efficiency: No gas costs for yield

  • Flexibility: Use in other DeFi protocols

Technical Advantages

  • Gas Efficiency: No claiming transactions

  • Composability: Works with any ERC-20 protocol

  • Transparency: On-chain value calculation

  • Reliability: No complex rebasing mechanics

Managing Your rSTS

Viewing Your Position

In Your Wallet

What You'll See:
- Token Symbol: rSTS
- Token Balance: XXX.XX rSTS (quantity stays constant)
- Current Value: Calculate manually or check dashboard

On Stasis Dashboard

Detailed Information:
- rSTS Balance: XXX.XX rSTS
- Current USD Value: $X,XXX.XX
- Exchange Rate: X.XXXX USDC per rSTS
- Total Gain/Loss: $XXX.XX (+X.XX%)
- APY: X.XX% (annualized)

Calculating Your Returns

Manual Calculation

Current Value = rSTS Balance × Current Exchange Rate

Example:
- Holdings: 1,000 rSTS
- Current Rate: 1.06 USDC per rSTS
- Current Value: 1,000 × 1.06 = $1,060

Gain Calculation:
- Original Deposit: $1,000
- Current Value: $1,060
- Total Gain: $60 (+6%)

APY Calculation

APY = ((Current Rate / Initial Rate)^(365/Days Held) - 1) × 100

Example (90 days):
- Initial Rate: 1.000
- Current Rate: 1.015
- APY = ((1.015/1.000)^(365/90) - 1) × 100 = 6.2%

Using rSTS in DeFi

Composability Benefits

As Collateral

  • Use rSTS as collateral in lending protocols

  • Earn yield while borrowing against position

  • Maintain exposure to Stasis strategy

In Liquidity Pools

  • Provide rSTS liquidity on DEXs

  • Earn trading fees + Stasis yield

  • Create rSTS/USDC or rSTS/ETH pairs

Yield Farming

  • Stake rSTS in other protocols

  • Stack yields from multiple sources

  • Maintain delta-neutral exposure

Considerations for DeFi Use

Risks

  • Smart Contract Risk: Additional protocol exposure

  • Impermanent Loss: If providing liquidity

  • Liquidation Risk: If using as collateral

Best Practices

  • Understand Protocols: Research before using

  • Start Small: Test with small amounts

  • Monitor Positions: Regular check-ups

  • Consider Complexity: Weigh benefits vs. risks

Tax Considerations

Holding rSTS

No Taxable Events

  • Simply holding rSTS typically doesn't trigger taxes

  • Value appreciation is unrealized until withdrawal

  • Consult tax professional for your jurisdiction

Record Keeping

Important Records:
- Purchase date and amount
- Initial exchange rate
- Current exchange rate
- Unrealized gains/losses

Withdrawing rSTS

Potential Taxable Events

  • Redeeming rSTS for USDC may trigger capital gains

  • Gain = (Withdrawal Value - Original Cost Basis)

  • Tax treatment varies by jurisdiction

Documentation Needed

For Tax Reporting:
- Original deposit amount and date
- Withdrawal amount and date
- Exchange rates at both times
- Net gain/loss calculation

Advanced rSTS Topics

Exchange Rate Dynamics

Factors Affecting Rate

  • Funding Rate Performance: Primary driver

  • Vault Efficiency: Strategy execution quality

  • Market Conditions: Crypto market volatility

  • Fees: Management and performance fees

Rate Volatility

  • Generally stable with gradual increases

  • May fluctuate with funding rate changes

  • Long-term trend typically upward

Token Economics

Supply Mechanics

rSTS Supply Changes:
- Increases: When users deposit (new tokens minted)
- Decreases: When users withdraw (tokens burned)
- No inflation: No new tokens created without deposits

Price Discovery

  • Exchange rate determined by vault performance

  • No external market pricing (unlike traded tokens)

  • Value always backed by vault assets

Integration Considerations

For Developers

// Getting rSTS value
function getRSTSValue(uint256 rSTSAmount) external view returns (uint256) {
    uint256 exchangeRate = vault.getCurrentExchangeRate();
    return (rSTSAmount * exchangeRate) / 1e18;
}

For Protocols

  • rSTS can be integrated like any ERC-20 token

  • Exchange rate available on-chain

  • Consider rate appreciation in protocol design

Troubleshooting rSTS Issues

Common Questions

"My rSTS balance isn't changing"

  • Expected: rSTS quantity stays constant

  • Value Changes: Exchange rate increases instead

  • Check Dashboard: For current USD value

"I can't see my rSTS tokens"

Manual Token Addition:
- Contract Address: [To be updated]
- Symbol: rSTS
- Decimals: 18

"Exchange rate seems wrong"

  • Verify Source: Check official dashboard

  • Time Delay: Rates update periodically

  • Contact Support: If significant discrepancy

Technical Issues

Wallet Display Problems

  • Refresh: Try refreshing wallet

  • Network: Ensure correct network selected

  • Update: Use latest wallet version

Transaction Failures

  • Gas: Ensure sufficient AVAX

  • Network: Check Avalanche status

  • Amount: Verify sufficient rSTS balance

Best Practices for rSTS Holders

Security

  • Wallet Security: Protect private keys

  • Verify Contracts: Always check contract addresses

  • Phishing Protection: Beware of fake sites

Monitoring

  • Regular Checks: Monitor position periodically

  • Rate Tracking: Watch exchange rate trends

  • Performance: Compare to expectations

Portfolio Management

  • Diversification: Don't put all funds in one protocol

  • Risk Assessment: Understand all risks involved

  • Rebalancing: Adjust allocation as needed

Next: Tracking Performance

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