What is Liquid Staking?

Liquid staking is a rapidly growing solution for earning rewards on your proof-of-stake tokens. Whereas traditional methods of staking are subject to unbonding periods (ranging from days to weeks), liquid staking provides stakers with increased liquidity – when token holders stake their tokens, they receive receipt tokens that can be sold right away. The newly minted receipt tokens can be used in many of the same ways that “non-staked” tokens can be used. If token holders want to reclaim their original tokens, they simply deposit the receipt tokens and receive back their original tokens.

Introducing Alluvial & Liquid Collective

Alluvial is the software development company supporting the development of the Liquid Collective protocol. Alluvial’s focus is on the overall growth and maturity of the ecosystem by bringing in more institutional participants to participate in Proof-of-Stake blockchains.

Liquid Collective is the secure liquid staking standard: a protocol with multi-chain capabilities designed to meet the needs of institutions, built and run by a collective of leading web3 teams including Figment. The first token Liquid Collective is offering will be LsETH. 

What is LsETH?

LsETH is a fungible receipt token based on the Ethereum ERC-20 cToken model. When a user deposits ETH to the Liquid Collective protocol, they receive LsETH that evidences their ownership of the staked ETH as well as any network rewards that accrue to the staked ETH minus protocol service fees and potential slashing penalities. 

Benefits of Liquid Staking LsETH: 

• Earn Rewards – users can hold their LsETH while accruing network rewards and using it as collateral for a range of DeFi activities. 
• Liquidity & Convenience  – token holders have an additional means of raising liquidity – rather than unbond their tokens and sell them, they can simply sell the liquid tokens
• Greater Security – in the cases where users sell the liquid token rather than unbond (i.e., remove stake), the network maintains the same level of security; in other words, liquid staking has a tendency to make staking sticky and this benefits network security

Liquid Staking Powered by Figment

Not available for US customers.

Figment seeded Alluvial with intellectual property and capital, as well as becoming one of the first validators and integrators for Liquid Collective. 

Any user that has ETH on WalletConnect or MetaMask will have access to liquid staking services on Figment and more tokens in the future. Non-US persons/entities are able to stake ETH and mint LsETH via the Figment app. 

Token Model

LsTokens follow the cToken model and will be minted and burned pursuant to the predetermined rules of the Liquid Collective protocol. LsETH evidences ownership of the base amount of ETH staked by the user as well as any accrued staking rewards generated by the blockchain network, minus any potential penalties imposed by the network and protocol service fees. 

Built for Institutions

In order to meet the needs of enterprises and institutional investors, the protocol seeks to build the industry standard for liquid staking and provide the deepest liquidity in the industry. The Liquid Collective is demonstrating early success with this strategy by partnering with the largest and most trusted integrators and validators in the ecosystem – Figment, Bitcoin Suisse, Coinbase, and Kraken. 

Liquid Collective is audited by third-party providers, conducts sanction checks on the  validators, KYC/AML checks on users/wallets, and monitors the LsETH supply to ensure it’s reconciled on an ongoing basis with the balance of ETH staked on validators. If interested in Liquid Staking, reach out to sales@figment.io today.