Custody Model
PrimeStaking operates a non-custodial, smart contract-based custody model. Validator keys and staked assets are managed entirely by audited on-chain contracts - no human interaction in custody flows.
Design Principles
Non-custodial
Users retain full ownership of assets at all times
Permissionless
Anyone can verify validator state and staked assets on-chain
Trustless
No single entity controls validator keys - the protocol enforces custody rules through code
Transparent
All custody operations are logged on the blockchain
How It Works
Validator Key Management
Validator keys are generated and secured by on-chain smart contracts
No human operator has direct access to private keys
Key rotation and management are governed by contract logic
Staked Asset Custody
User XDC deposits are held in the Liquid Staking Pool contract
The contract delegates staked XDC to validators programmatically
Withdrawal requests are processed through the contract's redemption queue
At no point does a human operator have discretionary control over user funds
Two Distinct Layers
It is important to distinguish between asset custody and contract governance:
Validator key custody
Fully on-chain, smart contract-managed
None - trustless by design
Contract upgrades
Multisig with timelock
Yes - multi-party approval required for any code changes
Validator keys and user funds are secured by code with zero human access. Contract upgrades (bug fixes, parameter changes) require a separate multisig governance process with mandatory timelock delays.
Institutional Considerations
Who controls the masternodes?
Smart contracts manage validator operations programmatically
Who signs upgrades?
Multisig governance with timelock (see Governance)
Is there a multisig?
Yes - contract upgrades require multi-party approval
Is there a timelock?
Yes - upgrade execution is delayed to allow review
Who controls the treasury?
Protocol treasury is governed by multisig with transparent on-chain operations
Is there automated reporting?
Yes - all staking, reward, and withdrawal events are indexed on-chain
Audit & Collaboration
The custody model is developed in collaboration with:
Nethermind - smart contract development and security review
XDC Core team - network-level validator integration
QuillAudits - independent external audit (98.8% score on staking contracts)
A dedicated audit of the custody contracts is in progress. Full results will be published upon completion.
Risk Mitigation
Smart contract exploit
Independent audits, reentrancy guards, pausable contracts
Validator downtime
Multi-validator delegation, performance monitoring
Unauthorized upgrades
Multisig + timelock governance
Key compromise
On-chain key management - no human access to private keys
Delayed withdrawals
Transparent queue processing with predictable timelines (~31 days)
What This Means for Partners
No third-party custodian risk - assets are secured by code, not by an institution
Verifiable at any time - on-chain state is the single source of truth
No operational dependency - the protocol operates autonomously once deployed
Institutional-grade transparency - full auditability aligned with exchange compliance requirements
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