Liquid Staking Tokens

Why so serious?

Aaaah, Liquid Staking.

We obviously love the topic and so do you, otherwise you would not be here. Feel free to stick around, because we are going to tell you about the magic behind Liquid Staking Tokens.

Liquid Staking Tokens… What are they exactly?

A Liquid Staking Token can be compared with an IOU that you used to give your classmates back in the day.

When a user brings their Monad Tokens to MagmaDAO, we take it, we stake it and we give them an IOU, our Liquid Staking Token. With that IOU they can come back and reclaim their Monad Tokens at any given time. What is even better, they can get it back with an extra side of Monad tokens as a result of their staking.

But that is not all they can do. Everywhere within the Monad ecosystem, a user can exchange that IOU for services or tokens for the value of that IOU in the market. Or, they can purchase IOU’s from other users who staked their Monad Tokens with us and return it, benefitting from the yield that is given on that IOU.

Why not just use Monad’s Token?

Honestly, we could. However, we considered the following points in detail.

Monad is fully decentralized and a proof-of-stake network. The network is maintained by a decentralized set of validators. Everyone can run a node, as long as they meet the requirements.

This is where we come in.

To incentivize a staking node, there is a yield reward of Monad tokens for stakers. The traditional way of staking however, locks up liquidity, making it less attractive for a large group of people who would like to keep some form of flexibility.

Liquid StakingTokens like ours, are a direct solution to this. Users on Monad can stake all their Monad tokens, directly contributing to the stability and decentralization of Monad as a whole, but because their tokens are liquid, they can enjoy the same freedom they would have without staking them.

On top of that, stakersare able to enjoy the same yield from staking that they would receive with traditional staking and compound it when they utilize their LST with any other form of DeFi yield farming, lending and trading that is available to them within the broader ecosystem.

Who can use the MagmaDAO LST? 

We are not elitists. True to the nature of crypto, our staking protocol is available to whomever wants to make use of it.

Personally, we think it should be everyone considering the huge benefits we just pointed out, but you are free to decide for yourselves that we are the ultimate LST solution.

In order to make sure, however, that we bring full value, our BD department led by Mona is working like crazy to align collaborations with all projects and developers building on Monad. Together, we will reshape the way that Web3 is viewed by the space itself AND by everyone outside of it.

TL;DR

Liquid Staking Tokens are what makes an ecosystem fluid and able to service multiple user groups with multiple angles.

Let’s make sure you stay in touch with us on X (Twitter) or hang out with us on Discord to follow our magma-fueled eruption into a promising, more vibrant and inclusive DeFi landscape.