Valantis Documentation
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  • Welcome to Valantis
  • Sovereign Pool
    • The Modules
      • Pool Manager
      • Liquidity Module
      • Swap Fee Module
      • Verifier Module
      • Oracle Module
      • Sovereign Vault
        • Rebase token support
      • Gauge
    • Interacting with Pools
      • Swap Parameters
      • Swap Steps
      • Multi Token Support
      • Deposit Liquidity
      • Withdraw Liquidity
      • Flash Loans
  • Hybrid Order Type (HOT)
    • Understanding HOT: A Graphical Overview
    • HOT API
      • HTTP request parameters
      • HTTP request response
      • Reasoning for Request structure
      • Solver Integration
      • Market Maker integration
    • HOT Smart Contracts
      • Interfaces
      • State variables and roles
      • AMM
      • HOT Swap
      • AMM Swap
      • Hybrid Order Type (HOT) struct parameters
      • Alternating Nonce Bitmap
      • Deposits
      • Withdrawals
      • Deployment Assumptions
    • Liquidity Manager Docs
      • Reference Oracle
      • Deposit
      • Withdraw
      • Signature
    • Swap
      • Swap Context
      • AMM Swap
      • HOT Swap
      • HOT Quote Parameters
        • Bitmap Nonce Instructions
    • Solver Docs
      • Solver Request
      • Simple HOT Swap Example
      • Partial Fill HOT Swap Example
    • Risks and Trust Assumptions
      • Roles
        • Sovereign Pool Manager
        • HOT Manager
        • HOT Signer
        • Liquidity Provider
      • Threats
        • Deposit Sandwich
        • Malicious Price Bound
        • Malicious Signer
        • Mispriced HOT Quote
  • Validly
    • Understanding Validly
    • Swap
    • Deposits and Withdrawals
    • Deployments
  • Stake Exchange (stHYPE AMM)
    • Swap
      • Instant Withdrawals (LST -> Native Token)
      • New Stake (Native Token -> LST)
    • LP Positions
      • LP Withdrawals Instant
      • LP Withdrawal Queued
    • Ratio Fee
    • Lending of Reserves
    • Smart contracts
      • STEXAMM.sol
      • StHYPEWithdrawalModule.sol
      • StexRatioSwapFeeModule.sol
      • DepositWrapper.sol
      • AaveLendingModule.sol
    • Risks and Trust Assumptions
    • Integration examples
  • Deploy and Build
  • Resources
    • Audits
    • Links
    • Get HYPE on HyperEVM
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On this page
  • About Stake Exchange AMM (STEX AMM)
  • The Problem (Loss Versus Unstaking)
  • The Solution (Native Integration)

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Stake Exchange (stHYPE AMM)

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Last updated 1 month ago

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About Stake Exchange AMM (STEX AMM)

Stake Exchange AMM is a novel AMM for LSTs.

STEX AMM's first implementation is for the StakedHYPE LST (stHYPE)

STEX solves secondary-market depeg losses for Liquid Staking Tokens (LSTs). Liquidity providers (LPs) on existing automated market makers (AMMs) incur losses by selling LSTs at a discount to remain balanced.

The Problem (Loss Versus Unstaking)

LPs sell LSTs below their true value, when they could retain the full value by unstaking. We call this phenomenon Loss Versus Unstaking (LVU). LVU is typically not accounted for in traditional stable swap APY calculations, but liquidity providers are constantly subject to these depeg arbitrage losses. For example, even the highest TVL LSTs consistently sell at "depeg" rates on traditional AMMs. By selling at discount rates when the AMM is imbalanced, there is loss incurred when the AMM rebalances.

Stable swap APY usually does not account for these losses, since APY is usually just "fees" collected. When LPs sell an LST for depegged price + fee that is below the true value of the LST, the LPs incur a loss not shown in APY numbers. This is a consistent problem for LST LPs, and risk not often represented. Therefore, STEX AMM represents more accurate yield numbers for LPs, by pricing the LST at its true value.

The Solution (Native Integration)

STEX AMM solves this problem by never selling an LST below its true value, and integrating with an LST's native withdrawal mechanism to rebalance itself back to native token at the true rate.

LPs are forbidden from selling LSTs at a loss.

STEX AMM is able to never depeg while remaining balanced because of its native integration with the LST protocol. Existing stable swap solutions can only rebalance themselves by selling LSTs at a discount when the pool is imbalanced. STEX AMM is able to withdraw these assets at their true rate in these scenarios—rebalancing without loss.

LPs collect fees as LSTs accumulate into the pool through a separate swap fee mechanism.