> For the complete documentation index, see [llms.txt](https://astralecosystem.gitbook.io/astralecosystemwhitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://astralecosystem.gitbook.io/astralecosystemwhitepaper/astral-ecosystem-2.0/staking.md). # STAKING Staking Derivative Issuance Astral Ecosystem proposes an bidding mechanism for staking, wherein stakers can auction off staked assets and buyers can place bids on a segment of the auction that reflects a portion of the staked assets. The governance will initially confirm the legitimacy of staking parties and the quantity of staked assets proposed for issuance of derivatives. The pricing of the derivative contracts is determined by issuers, but we have a framework to provide guidelines for issuers to set ask price. We first define the features of staking contracts as follows: Standard notations for each staking contract: • Current token price: Σ • The current value of the staking contract: ∇ = Σ ∗ (1 + R %)τ / y • Time to maturity: τ • Contract size: C • Staking term: y • ROI rate in the staking: R%

STAKE

If n contracts are traded in the market, and all notations are sub-labeled with i. Suppose 0 = τ0 < τ1 < . . . < τn; then the token's ROI should be a piecewise constant ri over time (\[τi − 1], τi). These ROI rates must be satisfactory.
So we have,
Now if we want to evaluate a staking contract with time to maturity and return rate k% then its value should be:
With this pricing guidance, the issuer can analyze the present price of their derivatives and open auction sale of staked assets. Insurance and Security By depositing SHROOM tokens, and specifying certain key parameters (e.g. underlying asset, strike price, expiry date, etc.), options writers are able to mint arbitrary fungible option tokens called vTokens. By selling these newly-minted tokens, writers can earn premiums and generate cash from their collateral. These vTokens are then available for purchase on exchanges such as 0x and Uniswap, ensuring market liquidity. Beyond the primitive of fungible, freely tradable ERC20 option contracts enabled by this framework, specifically focusing on protective put strategies for deposit insurance (e.g. protecting users of tokenized money markets like Compound against hacks and liquidity crises) and protection against stablecoins like DAI plummeting in value. We also discuss scenarios in which option sellers who desire to give protection can do so using collateral that differs from the asset in which the strike price is denominated (e.g., USD). The concept of insurance can be traced back to old communities that pooled their resources to protect one another against the risks they all faced. We realized that we could create a mutual platform where individuals need to trust the technology and not each other. The objective is to provide our members with simpler, more transparent, more readily available, and less expensive financial protection against their risks. SHROOM token will be backed by a pool of insurance funds that safeguard on-chain transactions. Astral Ecosystem offers derivative staking coverage, which protects stakers and bidders against value storage attacks. Financial Auditing The auditors’ technology adoption exhibits strategic complementarity because the cost of auditing cross-auditor transactions decreases when more auditors adopt. When clients strongly value the benefit of misreporting even after taking into consideration the possibility of being detected, they would prefer to work with auditors not using blockchain, notwith- standing that the auditor using blockchain can offer a lower auditing fee. Consequently, when other auditors are not adopting, an auditor would not find it profitable to adopt because adoption would not only fail to attract more clients, but also could result in losing clients that the auditor would get with traditional auditing. Overall, three technological characteristics of blockchain facilitate the auditing procedure: I decentralization: P2P design of blockchain eliminates the need for a trusted central party; (ii) encryption: the zero-knowledge proof method permits encrypted communication that protects data privacy; and (iii) immutability: once auditors request information through the federated blockchain, it is difficult for auditors or outside hackers to intentionally revise or delete the information unless they can revise the information on a majority of nodes. Astral Ecosystem will build a decentralized financial auditing system to track the post-auction activity of staking auction participants. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://astralecosystem.gitbook.io/astralecosystemwhitepaper/astral-ecosystem-2.0/staking.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.