# How LSD Works

#### 1.  User Staking

1. Connect Solana wallet
2. Enter SOL amount
3. Select a Strategy:
   * Safe Strategy – Capital preservation, low risk
   * Balanced Strategy – Controlled yield upside
   * Max Returns Strategy – Higher yield exposure with more risk
4. Confirm stake → lsdSOL is minted

lsdSOL represents a share of the pooled SOL.

#### 2. Strategy Aggregation

Instead of per-user allocation, LSD uses quadratic aggregation to determine which strategy the entire pool follows:

* More participants = more influence
* A small number of large deposits cannot override many smaller ones

Example:

* 1 user with 50 SOL chooses Safe Strategy
* 10 users with 5 SOL choose Max Returns Strategy

  → Max Returns Strategy wins

#### 3. AI Analysis & Allocation

AI (ASI) scores integrated protocols based on:

* TVL
* On-chain performance
* Yield history
* Incentives & token potential
* Risk metrics

It generates risk-reward scores and recommends allocation percentages within strategy limits:

* Safe: 100% to high-TVL, proven protocols
* Balanced: ≤30% to higher yield, rest to safer protocols
* Max Returns: ≤50% to higher yield/incentive sources

ASI recommendations are advisory; execution is handled by smart contracts.

#### 4.  Rebalancing

SOL allocations are rebalanced once per Solana epoch (\~2–3 days).

This ensures disciplined adjustment without over-trading.

### Unstaking Mechanics

* Standard Unstake:

  Burn lsdSOL → 1 epoch cooldown → claim SOL
* Instant Unstake:

  Immediate SOL return with 1% fee

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No deposit fee.