Liquid Staking
What is liquid staking?
Liquid staking on Liquidify is an alternative to traditional staking with a validator. It allows you to stake your SUI on SUI Network and receive Liquid SUI ("LiSUI"). LiSUI that you receive represents your staked SUI and acts as a receipt, allowing you to exchange them later on for your staked SUI and the earned rewards.
LiSUI is a liquid, tokenized representation of the staker’s staked SUI. LiSUI enables stakers to gain liquidity over their staked SUI and enables the locked value of the staked SUI to be utilized across decentralized finance applications across SUI Network. Find out more about bCRO in the following section.
Key benefits of Liquidify staking
Simplicity
Liquidify offers a simple and one-click liquid staking feature for users to stake SUI on Sui Network. Currently, there are no SUI staking option on Sui Network. Liquidify not only makes it possible to stake SUI on Sui Network but extremely easy and seamless as well.
Capital Efficiency
With a fully liquid derivative token (LiSUI), users are opened up to the possibility of using their staked assets across other DeFi applications. Users no longer have to choose between staking SUI (locking up SUI) or using that asset value as liquidity across decentralized exchanges or provided as collateral in lending platforms. You can now earn DeFi yields on top of staking yields!
Instant Liquidity
Users do not have to wait for the unbonding period to unstake their SUI and get back their assets in their wallets. Instead, LiSUI can be immediately swapped for SUI across secondary markets such as decentralized exchanges. We believe the secondary market will be extremely attractive to two stakeholders in the SUI ecosystem:
Stakers who wants instant liquidity Immediately swap your LiSUI to SUI without waiting for the unbounding period across our DEX partners.
LiSUI <> SUI arbitragers Since instant liquidity to swap LiSUI to SUI will result in SUI trading at a premium (liquidity premium) to LiSUI. Arbitragers who are bullish about SUI can essentially buy LiSUI at a discount and go through the normal unbonding period to receive more SUI after the unbonding period ends.
Diversified Validator Management
Our Validator Delegation Strategy aims to optimize staking returns and reduce slashing risks as we spread the staked SUI across multiple high quality validators.
Reduced Slashing Risks
Liquidify diversifies all staked SUI across a multitude of whitelisted high-quality validators who were selected based on meeting certain threshold performance criteria (Uptime, Commission %, self-staking, Oracle Sign %). With Liquidify liquid staking solution, users can delegate their SUI to a multitude of validators rather than just one. Due to the fungibility of LiSUI, each unit of LiSUI share the same risk and rewards. The cost of slashing is thus spread across pro-rata to all LiSUI tokens. This design is inspired by the Liquid Asset (LAsset) design of Lido in collaboration with Anchor Protocol on Terra.
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