Staking TON

2.1 Nodes

The pTON.fi runs a number (based on demand) of TON validator nodes which generate staking rewards for all its depositors. Users do not have to take any additional action - the fees are accrued automatically. Upon staking, users receive stTON, an ERC-20 equivalent of a Toncoin. Claiming and withdrawing rewards occurs through burning stTON to receive an equal amount of native TON.

The Toncoins are staked in the TON node and a respective amount of stTON is generated on Ethereum blockchain. The staking rewards are distributed amongst stTON holders proportionally to their stTON balances. Thus, a user holding stTON in their wallet balance will automatically receive rewards from staking.

2.2 Mint validation

Minting process on the Ethereum network is carried out by validators. When a user sends a transaction in the Ton network, it is sent to a number of independent validators. They verify the transaction in the TON network and, in case of successful verification by at least 66% of validators, respond with signatures. The signatures from the validators are passed to the user, and he sends the transaction to mint pTON or stTON (whichever chosen).

2.3 Front-run and sandwich attacks prevention

In order to exclude the possibility of malicious manipulation, rewards are not awarded instantly. They are spread over a period of time (currently 18 hours). Otherwise the attacker would be able to buy tokens right before reward the distribution, receive it and immediately sell the tokens without contributing to liquidity (a type of a sandwich attack).

2.4 Security and storage of keys

To ensure the security of wallets, the “Single nominator” scheme is used. Single nominator contracts are audited by Certik. The validator needs a hot wallet to be able to sign new blocks. If the validator's wallet is compromised, the attacker will not be able to extract any funds from the node. The Single Nominator contract is designed to separate powers in staking management. The node has the right to stake/unstake funds.