Liquid IKA (LIKA)

LIKA is Inkwell’s liquid staking token for IKA. Deposit IKA, receive LIKA, and use it across DeFi — all while your underlying IKA earns staking rewards.

How it works

LIKA follows the wstETH model — a rising exchange rate token. You don’t receive periodic reward payouts. Instead, the IKA value backing each LIKA increases over time as staking rewards accrue.

Action	What happens
Mint	Deposit IKA → receive LIKA at the current exchange rate
Hold	LIKA’s exchange rate rises each epoch as rewards compound
Redeem	Burn LIKA → receive IKA (instant from reserve, or 1-2 epoch delay via ticket)

Example

You deposit 100 IKA when the rate is 1 LIKA = 1.00 IKA → you receive 100 LIKA
After some time, staking rewards push the rate to 1 LIKA = 1.05 IKA
You redeem 100 LIKA → you receive 105 IKA

You never had to unstake, wait for cooldowns, or pick validators yourself.

Exchange rate

The LIKA/IKA exchange rate is calculated mark-to-market using the IKA network’s calculate_rewards() function. This accounts for all accrued but unrealized staking rewards across every validator position the pool holds.

exchange_rate = total_ika_value(pool) / total_lika_supply

The rate only goes up (assuming no slashing). It updates every epoch as rewards accrue.

Redemption

Redeeming LIKA is designed to never fail. The contract returns whatever IKA is available instantly, plus a ticket for the rest:

Scenario	What you get
Reserve has enough	Full IKA amount, instantly
Reserve partially covers	Partial IKA instantly + a `RedemptionTicket` for the remainder
Reserve empty	A `RedemptionTicket` for the full amount

RedemptionTicket is a transferable object. It becomes claimable after 1-2 epochs when the underlying stake finishes the unstaking cooldown.

Validator allocation

The pool stakes IKA across multiple validators using admin-set weights. A permissionless keeper system manages the lifecycle:

Keeper function	What it does	Who can call
`harvest_withdrawals`	Claims matured unstakes, fills the reserve	Anyone
`crank_unstake`	Initiates unstaking to cover pending redemption tickets	Anyone
`rebalance`	Moves stake toward target weights using new deposits	Anyone

All keeper functions are permissionless — any bot or user can call them. No single point of failure.

Lazy rebalancing

The pool uses lazy rebalancing: new deposits are directed to underweight validators rather than actively moving existing stake. This avoids the 2-4 epoch reward gap that comes with unstake-restake cycles.

Fee model

Single fee: 10% protocol reward share. No mint fee, no redeem fee.

Protocol earns only when stakers earn
Zero friction on entry/exit maximizes TVL growth
Aligned incentives — the protocol is motivated to optimize validator selection and keep APY high

DeFi composability

LIKA is a standard Sui Coin, fully composable with the Sui DeFi ecosystem:

Integration	Status
DEX liquidity (Cetus, Turbos)	Planned
Lending collateral (Suilend, Scallop, NAVI)	Planned
Leviathan cross-chain collateral	Future (via IKA dWallet bridge)

A LIKA/IKA DEX pool provides an instant exit path without waiting for the redemption cooldown.

Risks

Risk	Impact	Mitigation
Shared object contention	Every mint/redeem touches the pool AND IKA System objects	Inherent to IKA’s architecture. Acceptable for LST throughput.
Keeper liveness	Tickets can’t be claimed if nobody runs keeper functions	Permissionless — any bot can call. Incentive alignment through gas rebates planned.
Validator exit	Idle capital until withdrawal processes	`harvest_withdrawals` handles exited validators automatically
Low reserve	Large redemptions may require tickets instead of instant IKA	Never-abort design: you always get IKA or a ticket, never a failed transaction

​Liquid IKA (LIKA)

​How it works

​Example

​Exchange rate

​Redemption

​Validator allocation

​Lazy rebalancing

​Fee model

​DeFi composability

​Risks