Core Features and Mechanics of cgETH

Cygnus’ liquid staking solution stands out for its intuitive design and focus on user empowerment. Here are the primary features that define cgETH:

User-Friendly Interface

Cygnus’ application is designed to make staking as straightforward as possible. Users no longer need to possess a deep technical knowledge base or operate validator nodes. With just a few clicks, they can deposit ETH and begin earning staking rewards. This accessibility encourages widespread adoption of Ethereum staking among both retail and institutional investors.

No Minimum Stake Requirements

Unlike traditional staking, Cygnus has no minimum ETH requirement for staking. While users can stake any amount, it’s recommended to stake at least 10 ETH to optimize the cost-efficiency of transactional fees, which can impact the annual percentage yield (APY).

Liquidity Preservation

One of cgETH’s most critical advantages is its ability to preserve liquidity. By issuing cgETH tokens, Cygnus ensures that users’ assets remain productive and tradable. cgETH can be freely transferred, traded, or deployed within DeFi protocols, allowing users to maintain financial flexibility while earning staking rewards.

Enhanced Yield Opportunities

Cygnus is actively developing new products and partnerships to maximize the utility of cgETH within the DeFi ecosystem. By using cgETH in liquidity pools, governance participation, and yield farming, users can generate additional returns on their assets while retaining staking rewards.

How cgETH Works

1. Staking: Users deposit ETH through the Cygnus application. Upon confirming the transaction, they receive cgETH tokens representing their share in the ETH pool. The exchange rate between cgETH and ETH is determined by a smart contract algorithm based on the total value of the pool.

2. Validation: Cygnus pools the deposited ETH and distributes it among participating validator nodes. HashKey Cloud, a trusted and high-performance validator operator, is the key partner responsible for validating Ethereum transactions and securing rewards. These rewards are automatically added back to the ETH pool after deducting Cygnus’ service fee, increasing the pool’s value and the cgETH/ETH exchange rate.

3. Unstaking: Users can initiate the unstaking process at any time. After a cooldown period of 36 to 72 hours, cgETH tokens are exchanged for ETH based on the current exchange rate. Users can claim their ETH, including the accumulated rewards, once the cooldown expires.

cgETH Pricing and Value Growth

The value of cgETH is dynamically determined by the performance of the ETH pool. It is calculated as follows:

cgETH price = (ETH_pool + staking_reward - Cygnus_fee) / ETH_pool

ETH_pool – ETH tokens in the pool staking_reward – Cygnus validation rewardsAs the staking rewards are continuously added to the pool, the cgETH price naturally increases over time, reflecting the compounding growth of staking yields. This growth rate aligns with the Ethereum blockchain’s staking yield, minus Cygnus’ 20% service fee on staking rewards. Importantly, cgETH is fully backed by the ETH pool, ensuring there is no risk of a fundamental depeg within the Cygnus application.