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Two Ways to Deposit MON

When depositing MON into shMonad, you have two distinct options. Both add value to the protocol, but they create different positions for you as a depositor.

1. Standard Staking Deposit (Receive shMON)​

This is the standard liquid staking path:

  • What you do: Deposit MON into the contract
  • What you receive: shMON tokens that represent your share of the pool
  • Earning rewards: Your shMON earns staking rewards immediately. As the pool earns rewards, each shMON becomes worth more MON
  • Liquidity: Your shMON tokens are fully liquid—trade them, use them in DeFi, or hold them

The exchange rate when you deposit determines how much shMON you receive. The system includes recently earned rewards in this calculation, meaning you effectively "pre-pay" for a small portion of upcoming rewards. This prevents large depositors from timing their entries to extract value from existing holders.

Use this path when: You want liquid staking exposure with the ability to trade or use your tokens across DeFi applications.

2. Zero-Yield Deposit (No shMON Minted)​

Also known as the Degen Pool, this is an alternative path that benefits the entire pool:

  • What you do: Deposit MON into the contract
  • What you receive: A balance tracked in the zero-yield tranche (no tradable token)
  • Earning rewards: Your deposit earns zero yield. Instead, all rewards it generates go to shMON holders
  • Converting later: At any time, you can convert your zero-yield balance into shMON at the current exchange rate

How this benefits shMON holders: Your deposit increases the total staked MON earning rewards, but doesn't increase the shMON supply. This makes the rewards-per-shMON ratio higher for everyone else—similar to leverage, but without borrowing or the typical leverage risks.

Why use this path? Protocols, treasuries, or partners who want to boost the yield of shMON holdings without taking immediate liquid staking exposure can deposit here. Zero-yield deposits are typically held by depositors looking to gain access to infrastructure or otherwise unlock value offchain. The depositor maintains the option to convert into shMON at any point in the future, but until conversion, the deposit increases returns for existing shMON holders rather than for the depositor.

Comparison​

FeatureStandard DepositZero-Yield Deposit
shMON minted?✅ Yes❌ No
Earns yield immediately?✅ Yes❌ No
Boosts other holders' APR?Neutral✅ Yes
Liquid immediately?Yes (as shMON)No (must convert first)