Following the SIP #6 discussion, the Sui crypto project team decided to make an update to the network and implement the native liquid staking process.
Users can now put their SUI coins into staking and get the same counter value as a wrapped version, which can be transferred and traded at any time. Let’s look at all the details together
Summary
The Sui crypto project implements native liquid staking after latest chain update
Mysten Labs, the team engaged in the development of the layer 1 Sui blockchain, announced that it has added support for liquid staking of its native crypto.
The decision on the part of the project’s leadership came after the community voiced its opinion with the sixth Sui Improvement Proposal (SIP) regarding the need for such a service within its ecosystem.
In a matter of days, here is where words quickly turned into deeds with the liquid staking feature that was quickly implemented to allow stakers to obtain a “StakedSui” token, representative of the countervalue deposited on the infrastructure.
Unlike what was anticipated for the update in testnet, on Sui’s mainnet the crypto assets provided as alternative liquidity can be traded freely in the market, transferred to other addresses, as well as being returned to withdraw the stake.
The mechanism is very similar to that of the well-known decentralized Lido protocol, where users can deposit ETH and obtain StETH (the wrapped version of Lido). However, in Sui’s blockchain, stakers can decide for themselves which validator to designate for the work to be done by delegating their tokens, rather than leaving the choice to the platform itself, as is the case on Lido, for instance.
There are currently about 80 validators that can be selected, with the relative APY offered ranging from a low of 4.93% to a high of 8.02%.
The implementation of liquid staking represents a milestone for Sui and its team of engineers previously engaged in Meta to design the Diem cryptocurrency. The ability to offer flexible and elastic solutions to its community is critical for staking to reach significant numbers.
After Ethereum moved to proof-of-stake by merging its mainnet with the Beacon Chain, the liquid staking solution became increasingly popular prompting many DeFi projects to create a thriving secondary market for LSDs (liquid staking derivatives).
In fact, many wrapped versions of Ethereum can now be placed in annuity, be used as collateral for loans, and much more.
The hope is that the “StakedSui” token can also be spread into an ecosystem of decentralized applications with a multitude of use cases.
On the news, Sui’s foundation expressed itself in the following words:
“Liquid staking has the advantage of promoting decentralization by offering greater utility for stakers and thus increasing the incentives for staking and security of blockchain networks.”
Focus on SUI pricing and the TVL of the Layer-1
Following the announcement of the implementation of native liqud staking, the crypto SUI reacted negatively by registering a -5% in the markets.
The reason for this downward movement is mainly due to BTC’s unstable situation and investor fears about a rumor involving Binance and the US Department of Justice (DOJ).
Today the layer-1 coin looks to continue with a follow-down in supply by marking another -2.40% and preparing to break the price support that was created on 10 June.
After a killer launch in May that led the crypto to rapidly multiply its
price in a very short time, lo and behold over the next 3 months the bears lead SUI to halve in value.
At present, the crypto is waiting to find a “fair price” that can stabilize tempers between bulls and bears, while the crypto market oscillates between euphoria and uncertainty between applications of new ETFs for Bitcoin and Ethereum and lawsuits filed by federal agencies as well as heavy hacks in the DeFi world.
SUI currently has a price of $0.598 with a market capitalization of $433 million and volume in the last 24 hovering around $144 million.
It is very important for the crypto to see what the reaction in the 0.55 – 0.50 area will be and whether there will be a bullish demand push. If not, we could expect a further decline in the value of the asset with double-digit percentages.
As prices struggle to find serenity and break the downtrend dictated by the 10-period exponential moving average on a daily time frame, the chain’s TVL also fails to take off.
After a $32 million launch in value locked in the DeFi protocols, the desirability for the SUI ecosystem has waned leading to a downsizing of this value by more than 50%.
Currently we can count on about $14 million running between the decentralized protocols Cetus, Aftermath Finance, Kriya DEX, Deep Book, FlowX Finance, Navi Protocol, and Bucket Protocol.
Cetus alone encompasses nearly $8 million attesting as the dominant dApp of the DeFi structure. Volumes in the various applications fell alongside the TVL, leading to daily interactions of a few million dollar units in comparison to the 20 million recorded a few days after the chain was launched.
With the introduction of native liquid staking, we hope that the SUI crypto can regain bullish spirits in the market and the chain’s TVL can find new impetus to emerge among the various contenders, which are increasingly numerous and fierce in the decentralized finance landscape.
