> ## Documentation Index
> Fetch the complete documentation index at: https://docs.inkwell.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# Liquid IKA (LIKA)

> LIKA is a liquid staking token for IKA — stake IKA, receive LIKA, and stay liquid while earning rewards.

# 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

```mermaid theme={null}
graph LR
    A[Deposit IKA] --> B[Receive LIKA]
    B --> C[Use in DeFi]
    B --> D[Hold & earn]
    C --> E[Redeem LIKA for IKA]
    D --> E
```

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

1. You deposit **100 IKA** when the rate is 1 LIKA = 1.00 IKA → you receive **100 LIKA**
2. After some time, staking rewards push the rate to 1 LIKA = 1.05 IKA
3. 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      |