divETH & wdivETH
Diva's Liquid Staking token is available in a rebasing (divETH) and non-rebasing version (wdivETH), to fit all use cases.
It's designed to be compatible with Lido's stETH, to facilitate integrations with apps that already support stETH or wstETH.
📈 How divETH works for stakers
When a Staker deposits 1 ETH, 1 divETH is minted and returned to the Staker.
As Ethereum blocks are produced and staking rewards are generated, the Staker's divETH balance grows to reflect the underlying value of its ETH. The Staker's balance will automatically update daily to reflect the accrued ETH value.
1 divETH always represents an underlying value of 1 ETH, as it is fully backed by ETH.
divETH can be unstaked through the Diva protocol at any time by requesting a withdrawal and obtaining the underlying ETH after the withdrawal completes.
Example of divETH staking
- A Staker deposits 1 ETH into the Diva Smart Contract and obtains 1 divETH in their wallet.
- 1 year later, the staking rewards have been 5% and the Staker sees 1.05 divETH in their wallet.
- 2 years later, it accrues 5% more, so those 1.05 divETH further become 1.1025 divETH.
- The Staker decides to withdraw (un-stake) the 1.1025 divETH with the Diva Smart Contract and obtains 1.1025 ETH in return.
1 divETH = 1 staked ETH
divETH is a rebasing token, meaning that its balance is updated on a daily basis to reflect its exact underlying ETH value. There are no lock-ups or minimum deposits.
This mechanism allows divETH to always keep a 1:1 rate vs ETH while automatically reflecting the staking rewards.
Some other protocols use non-rebasing models more similar to wdivETH. Diva utilizes the rebasing model as it does not require Stakers to apply a conversion rate to calculate the fair divETH/ETH exchange rate, allowing the system to be more intuitive.
📦 The wdivETH wrapping option
In some cases, the changing balance of divETH is not ideal, and a non-rebasing static-balance token is preferable. This is the case with some Defi protocols and accounting use cases. That's why Diva provides wdivETH as a non-rebasing token.
The Diva Smart Contracts allow users to “wrap” divETH into wdivETH and vice-versa.
Balances of wdivETH are not updated daily, and do not change over time.
Instead, 1 wdivETH represents the value of 1 ETH staked through Diva at a certain moment in time. As Diva accrues staking rewards, 1 wdivETH is backed by an increasing amount of ETH over time, meaning that wdivETH appreciates vs ETH over time.
Example of wdivETH staking
- A Staker deposits 1 ETH into the Diva Smart Contract and obtains 1 divETH in their wallet.
- The Staker wraps 1 divETH to obtain 1 wdivETH. (This exchange rate is not fixed 1:1).
- 1 year later, the staking rewards have been 5%. The Staker still has 1 wdivETH, but it is now worth 1.05 ETH, as the underlying ETH increased from the staking rewards.
- 2 years later, the Staker still has 1 wdivETH but it's now worth 1.1025 ETH.
- The Staker decides to unwrap the 1 wdivETH, and obtains 1.1025 divETH.
- The 1.1025 divETH is withdrawn (un-staked) with the Diva Smart Contract and becomes 1.1025 ETH.
The purpose of wdivETH is to facilitate the integration with the wider Ethereum ecosystem and increase the divETH composability.
divETH vs wdivETH
1 divETH = 1 ETH at any moment. The ratio is always 1:1, increasing or decreasing to reflect the exact amount of underlying ETH.
The ratio of wdivETH:ETH is not 1:1 and will change over time, with 1 wdivETH being backed by 1.01 ETH, 1.02 ETH, 1.03 ETH, etc.
The wdivETH in your wallet will be a static value which only changes when you mint, withdraw or trade it. wdivETH can be unwrapped into divETH or further unstaked to obtain ETH.