SpringSui: A New Token Standard for Liquid Staking on Sui Network

Liquid staking on Sui has been given a welcome boost in the form of a new token standard developed by Suilend.

A new token standard for creating liquid staking tokens (LSTs) on Sui has been unveiled by Suilend, the team behind the popular DeFi lending protocol. Named SpringSui, the standard is set to have major implications for Sui builders and users alike.

Aftermath Finance is one of the first Sui protocols to incorporate SpringSui, and there are signs that other Sui projects are also poised to take the plunge.

Two Standards That Work as One

SpringSui is built upon SIP-31 and SIP-33, two protocol upgrades that support assets such as LSTs by allowing staked tokens to become fungible. As Emma Zhong, Software Engineer at Mysten Labs, explains: “SIP-33’s instant unstaking feature improves the safety of LSTs by minimizing depegging risks. This upgrade represents a major step in boosting the safety, efficiency, and accessibility of staking products across Sui’s DeFi ecosystem.”

More than just a proof of concept, SpringSui’s release has been accompanied by the launch of Spring SUI (sSUI), the first LST to harness this new framework. Users who stake SUI can receive sSUI on a 1:1 basis. This liquid staking token can then be utilized in other ways: for instance paired against SUI in a liquidity pool to earn a share of trading fees or as collateral to borrow stablecoins.

Making Liquid Staking the Center of Sui

SpringSui is designed to grow the liquid staking landscape on Sui network, which has lagged behind more mature networks such as Ethereum when it comes to liquid staking. At present, just over 1% of all native SUI is staked through liquid staking on Sui, whereas a whopping 41% of ETH is liquid staked on Ethereum. Even Solana is ahead with over 6.6% of SOL liquid staked compared to Sui. Being newer to PoS and DeFi, Sui is still developing its LST ecosystem which is why the SpringSui standard has been widely welcomed by developers.

Ethereum’s transition to Proof of Stake (PoS) has driven significant demand for staking. LSTs on Ethereum, like stETH (Lido’s liquid staked Ethereum) and rETH (Rocket Pool’s token), allow users to earn staking rewards while participating in DeFi. This same principle is now widely used across numerous PoS chains, with LSTs widely regarded as superior to conventional staking from a user perspective.

Not only do liquid staking protocols lower the barriers to entry, because users can stake with any amount, they’re freed from needing to run a validator node. Solo staking on Ethereum, for example, requires a minimum of 32 ETH. The growth of LSTs on Sui through SpringSui will be good for Suilend, good for DeFi users, and good for the broader staking industry.

The above is the detailed content of SpringSui: A New Token Standard for Liquid Staking on Sui Network. For more information, please follow other related articles on the PHP Chinese website!