How does King Distribution Work?
King is an LRT-agnostic rewards model, for simplifying and consolidating restaking rewards.
As restaking protocols transition to sustainable restaking reward models, where stakers earn a combination of restaking protocol tokens and rewards from AVS operators, those AVS and other related rewards will be distributed as multiple tokens over time. However, under this model most users would be claiming a fragmented set of tokens and potentially in dust amounts. This can mean poor liquidity and high volatility. Instead, ether.fi will use King to consolidate all restaking rewards into a single token for enhanced ease-of-use, improved liquidity, and better price stability.
For example, ether.fi provides the weekly claims of King based on your ether.fi staking activity in these protocols, and will enable you to unwrap your King into it's underlying tokens at any time, should you wish to. Currently, King distributes EigenLayer rewards. In the future, this will expand to include your staking activity across other restaking protocols as well, such as Symbiotic and Karak.
1. Allocation
Each week, LRTs will tally up the total rewards earned from staking in participating restaking protocols, and allocate them to our users proportionally, based on eETH, weETH, or Ether.
See How APR is Calculated for details.
2. Minting
LRTs will use the rewards from participating restaking protocols & AVSs to mint King tokens. Those assets are deposited into the King Protocol's contract, and LRTs will receive King tokens with the same value. The value of King tracks the value of the distribution of underlying tokens.
3. Claims
LRTs will distribute the King tokens through a cumulative claims distributor contract. This means that you do not need to claim every week, but can wait until the right time for you to claim. If you continue to stake without claiming, your claimable amount will continue to rise week-over-week. This will help smaller stakers avoid potentially punishing gas fees. Claims will be open at all times, and the allocation will be updated weekly.
4. What's Next?
Stakers may swap King on supporting DeFi protocols, and may find potential arbitrage opportunities. Additionally, holders can choose to unwrap their King tokens for the underlying tokens. They will receive a proportional distribution of the underlying tokens, equal to the value of their King.
For technical details, please consult King Protocol's whitepaper.