> For the complete documentation index, see [llms.txt](https://udonfi-1.gitbook.io/udonfi-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://udonfi-1.gitbook.io/udonfi-docs/liquid-staking/how-stchr-works.md).

# How stCHR Works

stCHR is Udon’s Liquid Staking Token (LST) for CHR — it lets you keep earning validator rewards from Chromia while staying liquid. Instead of locking your CHR for 14 days like in traditional staking, Udon lets you stake, receive **stCHR instantly**, and continue using it in DeFi.

***

### How stCHR Works

When you stake CHR through Udon:

* Your CHR is delegated to Chromia validators (just like normal staking).
* You instantly receive **stCHR** — a tokenized representation of your staked CHR.
* Your CHR continues to earn validator rewards on the Chromia network.
* The rewards accumulate and automatically transfer to your Udon account.

{% hint style="info" %}
Think of stCHR as a receipt for your staked CHR — but this receipt keeps increasing in value over time.
{% endhint %}

***

### The stCHR Lifecycle

Below is what happens at each stage:

{% stepper %}
{% step %}

### Stake

Action:

* You stake CHR on Udon

Result:

* CHR is delegated to Chromia validators
  {% endstep %}

{% step %}

### Mint

Action:

* Udon mints and sends stCHR to your wallet

Result:

* You receive stCHR asset instantly
  {% endstep %}

{% step %}

### Earn

Action:

* CHR appreciates in value

Result:

* Rewards from validators increase your CHR worth
  {% endstep %}

{% step %}

### Supply (optional)

Action:

* You use stCHR in Udon markets

Result:

* Earn extra APR from DeFi incentives
  {% endstep %}

{% step %}

### Redeem

Action:

* You redeem stCHR back to CHR

Result:

* Starts the 14-day unbonding period
  {% endstep %}

{% step %}

### Unbond complete

Action:

* After 14 days

Result:

* CHR is released to your wallet
  {% endstep %}
  {% endstepper %}

{% hint style="info" %}
Tip: You can use your stCHR during the earning phase — supply it, trade it, or hold it. Your staked CHR keeps working for you underneath.
{% endhint %}

***

### Maintaining the 1:1 Peg with CHR

stCHR is always backed by real staked CHR on the Chromia network. This ensures it can always be redeemed 1:1 for CHR (after the unbonding period).

However:

* In secondary markets, stCHR’s price may slightly move above or below 1 CHR (depending on liquidity).
* The protocol ensures that, no matter the market price, the redemption value remains fixed based on the current **exchange rate**.

***

### Value Growth Model

Here’s how your stCHR gains value step-by-step:

1. **Validators earn staking rewards** on your delegated CHR.
2. **Udon aggregates** those rewards across all stakers.
3. The **exchange rate** between stCHR and CHR increases slightly.
4. **Your stCHR automatically becomes more valuable** — no manual claim needed.

This means your yield is **auto-compounded** into the token’s value.

***

### In Simple Terms

If you stake **1,000 CHR** on Udon:

* You instantly get **1,000 stCHR**.
* You will receive daily rewards which are transferred to your account.
* You can use your stCHR to earn even more in Udon’s DeFi markets.
* When you’re done, redeem it to start the 14-day unstake timer and get your CHR back.

{% hint style="success" %}
Udon makes staking smarter: you keep your liquidity, earn continuously, and stay fully connected to Chromia’s validator rewards.
{% endhint %}