SpringSui: A New Liquid Staking Standard on the Sui Network

Liquid staking just got a boost on the Sui Network. Suilend introduced a new liquid staking standard. It reduces the chances of a depeg with $SUI for their $sSUI token. This opens new options in the Sui DeFi ecosystem.

Sui has been getting lots of attention recently. The $SUI token and the Sui ecosystem have been on fire. $SUI reached a new ATH during October and for the time being, $2.35 is the new standard. After the amazing rise during Suitember and October, the $SUI token was due for a good correction. However, now it’s getting attention again.

Suilend launched a new liquid staking standard, SpringSui, with its $sSUI token. So, we’re taking a closer look at what Suilend on the Sui Network brings to the liquid staking table.

What Is Liquid Staking

Regular staked assets are locked up and you can’t do anything with them except for receiving staking rewards. On the other hand, with liquid staking, once you lock your initial tokens, you receive a new token. This new token represents your initial stake. This is your LST or liquid staking token.

Now, you can use your LST in DeFi and earn more rewards. That’s on top of your initial staking rewards. We covered liquid staking, including its risks, in various articles. You can also check a dedicated Sui blog about liquid staking.

Learn how Sui’s unique approach to liquid staking using a unified coin standard enables greater composability, which in turn helps support a strong DeFi ecosystem and provides advantages over other chains.https://t.co/3KBaLwZC2o

— Sui (@SuiNetwork) February 3, 2024

What Is SpringSui by Suilend?

SpringSui is a new liquid staking standard on the Sui Network. The first token built with this new standard is $sSUI. The SpringSui Standard is an open-source LST (liquid staking token) standard.

$sSUI pegs 1:1 to the $SUI token. With this new standard, it reduces the risk of de-pegging. That’s because it offers infinite liquidity through instant unstaking. As you may know, crypto always has risks. Especially DeFi carries more risks. So, reducing the de-pegging risk is a massive step forward. It makes the $sSUI token more secure than other LSTs.

Suilend did this with the SIP-33. An SIP is a Sui Improvement Proposal. SIP-33 allows for instant redemption of LSTs for Sui. There’s no need to wait anymore for the end of a Sui epoch. Each Sui epoch lasts for around 24 hours. So, this results in a reduced de-pegging risk. Other LST tokens can depeg during market volatility or because of low liquidity. This can result in your liquidation.

How does it work?

When you stake SUI in a LST contract, you get a token that represents your stake. Before, these tokens could depeg during market volatility or low liquidity, causing liquidations.

The Suilend team authored SIP-33, to fix this by allowing instant redemption of…

— Suilend (@suilendprotocol) October 31, 2024

An interesting stat is that on SUI, liquid-staked SUI assets only represent 1.32% of all staked SUI assets. However, on Solana and Ethereum, that’s respectively 7% and 41%. SpringSui is about to change that percentage. Within 24 hours, it had already seen $10 million in TVL. At the time of writing, it sits at $11.46 million TVL. That’s still within 24 hours. After 4 days, it’s up to $15 million TVL. See the picture below.

The current LTV (Loan to Value) is 70%. $sSUI has an initial deposit limit of 10 million $SUI. The current $11.6 million TVL represents 6 million $SUI. So, you can still liquid-stake your $SUI on SpringSui. Below, you find out how to do this.

How Does Liquid Staking with SpringSUI Work?

To start, you will need some $SUI tokens. You can buy them easily on various exchanges and DEXes. Once you have $SUI in your wallet, you can visit the SpringSui app and connect your wallet.

Click on the ‘Stake’ button and deposit your $SUI tokens in the red ‘Stake’ box (marked by the red ‘A’). In the yellow box marked ‘B’, you can see the amount of $sSUI you will receive. This is a 1:1 ratio. So, if you deposited 50 $SUI, you should receive 50 $sSUI.

Now you can go to Suilend and deposit your $sSUI there. You start by connecting your wallet. Now you can select the $sSUI row, on top of the page (marked