Sui has been getting lots of attention recently. The $SUI token and the Sui ecosystem have been on fire. $SUI reached a new ATH during October and for the time being, $2.35 is the new standard. After the amazing rise during Suitember and October, the $SUI token was due for a good correction. However, now it’s getting attention again. Suilend launched a new liquid staking standard, SpringSui, with its $sSUI token.
So, we’re taking a closer look at what Suilend on the Sui Network brings to the liquid staking table.
What Is Liquid Staking
Liquid staking allows you to make more out of your staked assets. With regular staked assets, you lock up your assets. On top of that, you also lock up your liquidity. The only thing you can do now is receive staking rewards.
On the other hand, liquid staking gives you more options to earn rewards. With liquid staking, once you lock your initial tokens, you receive a new token. This new token represents your initial stake. This is your LST or liquid staking token.
Now, you can use your LST in DeFi and earn more rewards. That’s on top of your initial staking rewards. We covered liquid staking, including its risks, in various articles. You can also check a dedicated Sui blog about liquid staking.
Learn how Sui’s unique approach to liquid staking using a unified coin standard enables greater composability, which in turn helps support a strong DeFi ecosystem and provides advantages over other chains.https://t.co/3KBaLwZC2o
— Sui (@SuiNetwork) February 3, 2024
What Is SpringSui by Suilend?
SpringSui is a new liquid staking standard on the Sui Network. The first token built with this new standard is $sSUI. The SpringSui Standard is an open-source LST (liquid staking token) standard.
$sSUI pegs 1:1 to the $SUI token. With this new standard, it reduces the risk of de-pegging. That’s because it offers infinite liquidity through instant unstaking. As you may know, crypto always has risks. DeFi especially carries more risks. So, reducing the de-pegging risk is a massive step forward. It makes the $sSUI token more secure than other LSTs.
Suilend did this with the SIP-33. An SIP is a Sui Improvement Proposal. SIP-33 allows for instant redemption of LSTs for Sui. There’s no need to wait anymore for the end of a Sui epoch. Each Sui epoch lasts for around 24 hours. So, this results in a reduced de-pegging risk. Other LST tokens can depeg during market volatility or because of low liquidity. This can result in your liquidation.
How does it work?
When you stake SUI in a LST contract, you get a token that represents your stake. Before, these tokens could depeg during market volatility or low liquidity, causing liquidations.
The Suilend team authored SIP-33, to fix this by allowing instant redemption of…
— Suilend (@suilendprotocol) October 31, 2024
Now, an interesting stat is that on SUI, liquid-staked SUI assets only represent 1.32% of all staked SUI assets. However, on Solana and Ethereum that’s respectively 7% and 41%. SpringSui is about to change that percentage. Within 24 hours, it had already seen $10 million in TVL. Currently, at the time of writing, it sits at $11.46 million TVL. That’s still within 24 hours. After 4 days, it’s up to $15 million TVL. See the picture below.
Source: X
The current LTV (Loan to Value) is 70%. $sSUI has an initial deposit limit of 10 million $SUI. The current $11.6 million TVL represents 6 million $SUI. So, you can still liquid-stake your $SUI on SpringSui. Below, you find out how to do this.
How Does Liquid Staking with SpringSUI Work?
Liquid staking on SpringSui is not easy. For starters, you will need some $SUI tokens. You can buy them easily on various exchanges and DEXes. Once you have $SUI in your wallet, you can visit the SpringSui app and connect your wallet.
Source: SpringSui
Click on the ‘Stake’ button and deposit your $SUI tokens in the red ‘Stake’ box. Marked by the red ‘A’. In the yellow box marked ‘B’, you can see the amount of $sSUI you will receive. This is a 1:1 ratio. So, if you deposited 50 $SUI, you should receive 50 $sSUI.
Source: Suilend
Now you can go to Suilend and deposit your $sSUI there. You start by connecting your wallet. Now you can select the $sSUI row, on top of the page. See the yellow arrow.
Once you click on that row, a new box should pop up, see the picture above. It should have the deposit box open. So, enter the amount of $sSUI you like to deposit and hit the ‘Deposit’ button. Now you deposited your $sSUI. You also receive $SEND points for this. You can use these for the $SEND token airdrop. The more $SEND points you collect, the greater your $SEND token airdrop will be.
Other projects will also be able to use this SpringSui standard. The Aftermath DEX and Studio Mirai, of the Prime Machin NFT collection, are the first in line for this. Aftermath already has afSUI as its liquid staking token. It currently holds over 24 million SUI in its contract. This will migrate soon to the SpringSui standard. Studio Mirai will create its own Sui LST. They will be the first team to leverage the SpringSui Standard to do this.
Liquid Staking Risks
Risks associated with liquid staking, include, among others,
- Smart contract risks — An exploit or an unstake mechanism failure.
- Validator risk — Poor validator performance or slashing risk.
- And the de-pegging risk mentioned earlier.
Conclusion
Liquid staking just got a boost on the Sui Network. Suilend introduced a new liquid staking standard. It reduces the chances of a depeg with $SUI for their $sSUI token. This opens new options in the Sui DeFi ecosystem.
The current $SUI price is $1.98 with a $5.4 billion market cap. Out of the 10 billion max and total supply, only 2.76 billion $SUI circulate.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.
We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence. This article has been sponsored by Sui.
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The post Sui Adds Liquid Staking Token Standard appeared first on Altcoin Buzz.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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