# ETHx Staking

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ETHx allows users to benefit from Ethereum staking while maintaining liquidity for their assets. Here's a simple explanation of how it works:

**1. Deposit and Token Issuance:**

When a user deposits Ethereum into the ETHx staking contracts, the protocol issues an equivalent number of ETHx tokens back to the user. These tokens act as a liquid representation of the user's staked Ethereum, allowing them to maintain control over their assets without sacrificing potential staking rewards.



**2. Multi-Pool Architecture:**

Once deposited, the user's Ethereum is managed by the Stader staking manager, which leverages a multi-pool architecture. The staked Ethereum is split between Permissionless and Permissioned node operator pools. This setup not only ensures scalability and decentralization but also optimizes the return potential for the staked assets.



**3. Node Network and Reward Generation:**

The Ethereum from the pools is then allocated to the ETHx Node Network, a decentralized group of Ethereum nodes that interact with the protocol's staking contracts. These nodes perform critical validation tasks for the Ethereum Beacon Chain. The tasks performed by these nodes generates staking rewards.



**4. Accrued Rewards and Value Growth:**

As the nodes generate rewards, these are accumulated and lead to an increase in the exchange rate of ETHx relative to Ethereum. This growth mechanism ensures that ETHx tokens increase in value over time, reflecting the staking rewards earned from the Ethereum staked.



So, in essence, ETHx provides a flexible, scalable, and profitable solution for Ethereum staking, allowing users to earn rewards and participate in the DeFi ecosystem without locking up their assets.
