Mysten Labs' Layer 1 blockchain Sui Network's latest network upgrade has added support for liquid staking of its native token.
Liquid staking is where stakers are given derivative tokens in proportion to the tokens they have staked. The derivative tokens typically reflect the value of the staked tokens, perhaps with a slight deviance, and allow stakers to access the value that would be otherwise locked up.
“The upgrade will enable developers to offer services allowing token holders to receive derivative tokens proportional to the value of their staked Sui tokens,” the platform said in a statement. “Sui developers will now be able to offer fully non-custodial liquid staking solutions."
Sui, a Layer 1 blockchain in competition with other networks like Solana, Aptos and Sei, was developed by Mysten Labs and launched on mainnet in May. Mysten Labs was founded in 2021 by former Meta executives.
Native liquid staking
The blockchain and smart-contract platform said unlike other networks, such as Lido issuing the derivative and "determining" where staked tokens are delegated, Sui allows users to stake their original tokens with the validator of their choice, rather than "relinquishing this responsibility to the liquid staking protocol."
“Liquid staking has the benefit of promoting decentralization by offering greater utility for stakers and thus increasing the incentives to stake and secure blockchain networks," said Sui in its statement. “However, constraining the stakers’ choice of validator has the opposite effect by concentrating power in one or a few validators on the network. Sui’s liquid staking formulation avoids this pitfall.”
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