How yield accrues

Yield in the exchange rate

stSUI doesn't pay rewards as separate distributions. The rewards push the exchange rate up.

Starting ratio

At launch, 1 stSUI = 1 SUI.

How the ratio grows

At the end of each Sui epoch (~24 hours), validators distribute rewards. The protocol claims them and adds them to the SUI pool. The stSUI supply doesn't change.

new_exchange_rate = (SUI in pool + new rewards) / stSUI supply

The ratio moves up by the per-epoch reward rate, minus the 6% performance fee.

Example

Stake 1,000 SUI at launch → receive 1,000 stSUI.

Network APR: ~3.5%. After the 6% performance fee, your effective yield: ~3.29% APR.

After 1 year:

• Each stSUI is now worth ~1.0329 SUI
• Your 1,000 stSUI is worth ~1,032.9 SUI

Unstake: receive ~1,032.9 SUI minus the 0.01% redeem fee (~0.10 SUI) = ~1,032.8 SUI.

(Numbers illustrative. Actual APR varies.)

APR Sources

stSUI's APR comes from:

• Sui network staking rewards — the base yield from validators
• Network inflation — drives staking rewards
• Validator performance — top validators earn more, underperformers earn less or get slashed
• Instant unstaking fees — part of the 0.01% redeem fee flows back to the pool
• Minus: performance fee — 6% of yield, deducted at each epoch
• Minus: validator commissions — taken from gross yield before it reaches stSUI holders

The APR shown on the stSUI page is net of all fees.

Validator delegation

How stSUI splits stake across validators

The protocol holds a list of validators and their weights. New SUI gets allocated by weight.

Example: if Validator A has weight 90 and Validator B has weight 10:

• 90% of new stake goes to Validator A
• 10% goes to Validator B

Weights can be updated by the admin as conditions change.

Why multiple validators

Staking with just one validator is risky:

• Slashing — if the validator misbehaves, all stake suffers
• Centralization — single-validator LSTs concentrate the network

Splitting stake across many validators limits both. If one validator has a bad epoch, only its share of the pool is affected.

Risks

Smart contract risk

stSUI relies on smart contracts to manage staking, unstaking, and redemptions. While audited, smart contracts carry inherent risk.

Validator risk

Staked SUI is delegated to validators. Poor validator performance or slashing events could impact rewards.