Why Liquid Staking

The Sui Network uses a delegated proof-of-stake (DPoS) mechanism for its blockchain consensus. To maintain the decentralization and security of the Sui blockchain, we need to stake as many SUI tokens as possible with stable and efficient validators.

However, most common users do not have the capability, experience or time to deploy and maintain their own validator hardware and software to participate in blockchain validation. On most layer1 or layer2 blockchain, this is conducted by professional node service providers and experienced devops engineers. As blockchain and DeFi are fully open and transparent to all users, is there a way for ordinary users to join the chain consensus and benefit from this economy?

This is where liquid staking steps in. With liquid staking protocols like Haedal, users don't need to care about the technical implementation regarding validators. They can simply delegate their SUI tokens to liquid staking protocols to stake to validators to earn consensus rewards. More importantly, the value of their assets will not be completely locked as inactive status. Instead, the value can be released back to the ecosystem in the form of haSUI liquidity, which can be used in a variety of DeFi scenarios. Users don't need to make tradeoffs between staking in validators or providing liquidity in DeFi protocols. With liquid staking, they can achieve both or even multiple in a DeFi composability manner.

When users stake their SUI with Haedal, Haedal selects multiple validators that perform stably and efficiently through a reliable algorithm. The staked SUI tokens from users will be distributed across these validators, with periodic adjustments to the distribution.

The process of users staking through liquid staking protocol is also a process of contributing to network robustness and stability.