Liquid Finance is a unique solution that addresses the common trade-off between staking and liquidity in the blockchain space. The protocol allows users to stake their assets, thereby securing the Archway blockchain, while simultaneously providing them with a liquid token, sARCH, which represents their staked assets. This dual functionality ensures that users can maximize their capital efficiency without compromising on security or liquidity.
The sARCH token stands at the heart of the Liquid Finance protocol. It represents the balances staked within the system and offers holders the dual advantage of earning interest from their staked assets while retaining liquidity. When users deposit their ARCH tokens into Liquid Finance, they receive sARCH tokens in return. These tokens are auto-compounding and reward-bearing, ensuring that staking rewards are automatically claimed and reinvested by the protocol, optimizing the holder’s yield.
Staking and Unstaking
Staking with Liquid Finance is straightforward. Users deposit their ARCH tokens, and in return, they receive sARCH tokens, which represent their share of deposits and begin accumulating rewards. The staked ARCH tokens are then delegated to a curated list of Validators to accrue staking rewards.
When it comes to unstaking, users have two options:
- Traditional Unstaking: This method involves a maximum unstaking period of 25 days. However, the period might be shorter as new deposits and claimed rewards are used to match traditional unstaking requests.
- Instant Unstaking: For a nominal 1% fee, users can instantly swap their sARCH tokens for ARCH. This feature is facilitated by the Instant Unstaking Queue, which provides the necessary liquidity for these instant swaps.
Liquid Finance offers an innovative approach to liquidity provision. Users can provide ARCH liquidity to the Instant Unstaking Queue and earn ARCH rewards in return. The protocol operates on a First-In-First-Out (FIFO) basis, ensuring fairness in liquidity provision. Additionally, Liquid Finance introduces a “Compound” feature for passive liquidity management, allowing providers to automate their liquidity provision and unstaking processes.
Liquid Finance’s native deployment on the Archway blockchain offers several benefits:
- Ecosystem Composability: Seamless integration with other Archway applications.
- Minimized External Dependencies: By leveraging Archway’s infrastructure, Liquid Finance reduces both technical and economic dependencies.
- Flexible and Sustainable Incentives: The protocol can tailor incentives to boost liquidity and utility, while also reinvesting rewards back into the ecosystem.
- Diversified Validator Delegation: Reduces slashing risks by delegating across a range of reputable Validators.
- Compounded Staking Rewards: Automates reward claiming and restaking, saving transaction fees and manual effort.
- Archway Community Focus: Close collaboration with Archway ecosystem participants to cater to the specific needs of the Archway ecosystem and ARCH holders.