Collateral & Collateral Classes

What Are Collateral Classes?

In Suzaku, every collateral token (an ERC-20) belongs to exactly one "collateral class". Each collateral class can contain one or more ERC-20 tokens that the L1 accepts for a specific staking requirement.

1. Primary Collateral Class:

   • For more information on Dual-Staking, see Dual-Staking.
   • Each L1 must have at least one collateral class designated as "primary".
   • Often, this class corresponds to the L1's own token—potentially including multiple derivative versions of that token. For example, if the L1's native coin is TOKEN, builders can put both TOKEN and a vested version of this token veTOKEN under the same primary collateral class (collateralClassId = 1).
   • Validators must stake some amount of one of these tokens to meet the L1's primary requirement (ensuring they have "skin in the game").
   • Primary collateral classes have minValidatorStake (minimum per-validator) and maxValidatorStake (maximum) that each node must adhere to when becoming a validator.

2. Secondary Collateral Class(es):

   • An L1 may also define additional collateral classes for other tokens—e.g., stablecoins, LSTs, or cross-chain assets. These are secondary.
   • Requiring a secondary collateral can help the L1 attract stable or diversified collateral—for instance, a chain might demand "min. 100 native token + min. 200 stablecoin", effectively implementing a Dual-Staking model.
   • A secondary class can also contain multiple Collateral tokens. It usually only has a minValidatorStake enforced.

Collateral Tokens & Burners

• A Collateral in Suzaku is simply an ERC-20 token with extended functionality for ERC-20 normalization, points tracking, and possible slashing (in the future).
• If the token supports principal slashing, the Collateral owner attaches a Burner contract that can actually burn or redeem the underlying (e.g., withdrawing ETH from an LST).

How It Works: L1 Staking Requirements

1. Primary Requirement
   • The L1 sets min/max rules for the primary collateral class. All tokens in that collateral class collectively fulfill the Operator's primary stake when validating.
2. Secondary Requirement
   • If the L1 wants a dual-staking approach, it activates one or more secondary classes (each with its own minimum).
   • Operators must stake the required amounts from both primary and secondary classes. For example, an L1 could require *at least 100 tokens from the primary class plus at least 50 from the secondary stablecoin class.

Vaults & Collateral Classes

• When deploying a vault, one specific Collateral ERC-20 is picked to be the vault's underlying token.
• That token belongs to exactly one collateral class. If the token is recognized under the L1's primary class, the vault's stake satisfies the L1's primary requirement; if it's in a secondary class, it goes toward the L1's secondary requirement.