Staking
An Overview of Hourglass Staking Protocol
System Overview
This section describes how users receive time-bound tokens in exchange for staking into a time-locked vault. Hourglass currently only supports the frxETH/ETH pool on Convex, but there are plans to add additional pools (assets) in the near future.
At a high level, the system works as follows:
Hourglass Custodian
Users enter the Hourglass system through a smart contract known as the Custodian. This is the entrypoint for all locked staking and functions as a proxy for different vaults that Hourglass supports. Hourglass primarily supports one category of staking today, which are Convex Vaults staked on top of Frax. Each 'class' of vault that the Custodian supports is known as an Asset, and the custodian can theoretically be expanded to support an arbitrary number of assets.
Staking Proxy Vault
As mentioned above, the Hourglass Custodian clones out a "staking vault" for each type of asset it supports. More precisely, it might clone out multiple staking vaults for a specific asset. Let's use an example:
Hourglass currently supports the Convex frxETH/ETH Staking Vault, which represents Curve LP tokens that are staked through Convex onto a locked Frax Farm. In order to aggregate users together and improve liquidity, Hourglass has cloned out only four vaults for this asset, shown below.
Each of the list items shown above represent a unique staking proxy vault. Depositors stake into here through the Custodian, which tracks all user balances.
ERC1155 (Time-Bound Token)
Upon staking into a Proxy Vault above, users receive some time-bound tokens representing their claim on the vault. This is technically represented via a balance on an ERC1155 smart contract, where a tokenId corresponds to the UNIX timestamp for its maturity. The ERC1155 smart contract also encodes data that connects it with the underlying staking proxy vault.
This time-bound token is the fundamental Lego behind the Hourglass system, and everything in the marketplace section and beyond is built to support it.
Matured Staking Vault
Upon maturity, the underlying staked assets are migrated to a matured vault, where users can redeem their 1155s for the underlying.
RewardDistributor
Users may be entitled to rewards for holding onto a time-bound token, which are periodically made available through a Merkle airdrop on the RewardsDistributor.
(Roadmap) Generalized Time-Boosted Staking Contract
Hourglass is able to support time-boosted staking on the Frax protocol because Frax has implemented on-chain logic for distributing and boosted rewards to users who have time-locked tokens. This system can be generalized to support the an arbitrary time-boosted staking contract, which will make it incredibly easy (no-code) for protocols to build on top of this system. This is contract currently under development.
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