Abstract
This PIP defines the Liquid Staking Protocol for Pars Network. Users can deposit assets and receive 1:1 liquid staking tokens (L-tokens) that represent their staked position. L-tokens are always redeemable 1:1 for the underlying asset and can be used as collateral throughout the ecosystem.
Motivation
Users holding assets like ETH, BTC, PARS, CYRUS, or MIGA face a choice:
- Hold: Keep assets liquid but earn no yield
- Stake: Earn yield but lose liquidity
Liquid staking solves this by providing:
- 1:1 receipt tokens that maintain full liquidity
- Yield accrual while tokens remain usable
- Collateral utility in DeFi protocols
- Composability with ASHA bonding and other systems
Specification
Liquid Staking Architecture
┌─────────────────────────────────────────────────────────────────────────────────────┐
│ LIQUID STAKING PROTOCOL │
├─────────────────────────────────────────────────────────────────────────────────────┤
│ │
│ DEPOSIT LAYER │
│ ┌───────────────────────────────────────────────────────────────────────────────┐ │
│ │ │ │
│ │ ETH ──────► Stake ──────► LETH (1:1) │ │
│ │ BTC ──────► Stake ──────► LBTC (1:1) │ │
│ │ PARS ─────► Stake ──────► LPARS (1:1) │ │
│ │ CYRUS ────► Stake ──────► LCYRUS (1:1) │ │
│ │ MIGA ─────► Stake ──────► LMIGA (1:1) │ │
│ │ │ │
│ └───────────────────────────────────────────────────────────────────────────────┘ │
│ │ │
│ ▼ │
│ YIELD LAYER │
│ ┌───────────────────────────────────────────────────────────────────────────────┐ │
│ │ │ │
│ │ Underlying assets deployed to yield strategies: │ │
│ │ ┌─────────────────────────────────────────────────────────────────────────┐ │ │
│ │ │ ETH → Validator staking, restaking (EigenLayer) │ │ │
│ │ │ BTC → Wrapped BTC yield strategies │ │ │
│ │ │ PARS → Protocol staking, gauge rewards │ │ │
│ │ │ CYRUS/MIGA → DAO treasury yield │ │ │
│ │ └─────────────────────────────────────────────────────────────────────────┘ │ │
│ │ │ │
│ │ Yield accrues to L-token holders via rebasing or exchange rate │ │
│ │ │ │
│ └───────────────────────────────────────────────────────────────────────────────┘ │
│ │ │
│ ▼ │
│ UTILITY LAYER │
│ ┌───────────────────────────────────────────────────────────────────────────────┐ │
│ │ │ │
│ │ L-tokens can be used for: │ │
│ │ • Collateral in lending protocols │ │
│ │ • Liquidity provision (LETH/ETH, LPARS/PARS pools) │ │
│ │ • ASHA bonding (deposit LETH → get ASHA at discount) │ │
│ │ • Governance (LPARS counts for veASHA eligibility) │ │
│ │ │ │
│ └───────────────────────────────────────────────────────────────────────────────┘ │
│ │
└─────────────────────────────────────────────────────────────────────────────────────┘L-Token Contracts
Base Interface
solidity
interface ILiquidStakingToken {
// ═══════════════════════════════════════════════════════════════════════════════
// STAKING
// ═══════════════════════════════════════════════════════════════════════════════
/// @notice Deposit underlying asset and receive L-token 1:1
/// @param amount Amount of underlying to deposit
/// @param recipient Address to receive L-tokens
/// @return shares Amount of L-tokens minted
function deposit(uint256 amount, address recipient) external returns (uint256 shares);
/// @notice Deposit underlying asset (native ETH version)
/// @param recipient Address to receive L-tokens
/// @return shares Amount of L-tokens minted
function depositETH(address recipient) external payable returns (uint256 shares);
/// @notice Withdraw underlying asset by burning L-tokens
/// @param amount Amount of L-tokens to burn
/// @param recipient Address to receive underlying
/// @return assets Amount of underlying returned
function withdraw(uint256 amount, address recipient) external returns (uint256 assets);
// ═══════════════════════════════════════════════════════════════════════════════
// EXCHANGE RATE
// ═══════════════════════════════════════════════════════════════════════════════
/// @notice Get current exchange rate (L-token to underlying)
/// @return rate Exchange rate with 18 decimals (starts at 1e18)
function exchangeRate() external view returns (uint256 rate);
/// @notice Convert L-token amount to underlying amount
/// @param shares Amount of L-tokens
/// @return assets Equivalent underlying amount
function convertToAssets(uint256 shares) external view returns (uint256 assets);
/// @notice Convert underlying amount to L-token amount
/// @param assets Amount of underlying
/// @return shares Equivalent L-token amount
function convertToShares(uint256 assets) external view returns (uint256 shares);
// ═══════════════════════════════════════════════════════════════════════════════
// INFO
// ═══════════════════════════════════════════════════════════════════════════════
/// @notice The underlying asset address
function asset() external view returns (address);
/// @notice Total underlying assets managed by this contract
function totalAssets() external view returns (uint256);
/// @notice Current APY from yield strategies
function currentAPY() external view returns (uint256);
}L-Token Registry
| L-Token | Underlying | Symbol | Yield Source |
|---|---|---|---|
| LETH | ETH | Liquid Staked ETH | Validator staking, restaking |
| LBTC | WBTC | Liquid Staked BTC | BTC yield strategies |
| LPARS | PARS | Liquid Staked PARS | Protocol staking rewards |
| LCYRUS | CYRUS | Liquid Staked CYRUS | DAO treasury yield |
| LMIGA | MIGA | Liquid Staked MIGA | DAO treasury yield |
Yield Strategies
Each L-token vault deploys underlying to yield-generating strategies:
LETH Strategies
| Strategy | Allocation | Expected APY |
|---|---|---|
| Validator Staking | 60% | 3-5% |
| Restaking (EigenLayer) | 30% | 2-8% |
| Reserve | 10% | 0% |
LPARS Strategies
| Strategy | Allocation | Expected APY |
|---|---|---|
| xPARS Staking | 70% | Variable |
| Gauge Rewards | 20% | Variable |
| Reserve | 10% | 0% |
Yield Distribution Models
Two models supported:
1. Rebasing (Default for LETH)
L-token balance increases automatically as yield accrues:
solidity
// User deposits 1 ETH, gets 1 LETH
// After 1 year at 4% APY, user has 1.04 LETH
// Each LETH still redeems for 1 ETH2. Exchange Rate (Default for LPARS, LCYRUS, LMIGA)
L-token balance stays constant, exchange rate increases:
solidity
// User deposits 100 PARS, gets 100 LPARS
// After 1 year at 10% APY, exchange rate = 1.1
// 100 LPARS redeems for 110 PARSIntegration with ASHA Bonding
L-tokens can be used as collateral for ASHA bonding (PIP-7006):
┌─────────────────────────────────────────────────────────────────┐
│ L-TOKEN → ASHA BONDING │
├─────────────────────────────────────────────────────────────────┤
│ │
│ Step 1: Liquid Stake │
│ ┌─────────────────────────────────────────────────────────────┐│
│ │ ETH ──► Deposit ──► LETH (1:1) ││
│ │ Keeps earning yield while you decide what to do ││
│ └─────────────────────────────────────────────────────────────┘│
│ │ │
│ ▼ │
│ Step 2: Bond for ASHA (Optional) │
│ ┌─────────────────────────────────────────────────────────────┐│
│ │ LETH ──► Bond ──► ASHA at discount ││
│ │ You give up LETH, receive ASHA at 5-12% discount ││
│ │ LETH goes to treasury, ASHA minted to you ││
│ └─────────────────────────────────────────────────────────────┘│
│ │ │
│ ▼ │
│ Step 3: Lock for Governance (Optional) │
│ ┌─────────────────────────────────────────────────────────────┐│
│ │ ASHA ──► Lock ──► veASHA ││
│ │ veASHA = governance power ││
│ └─────────────────────────────────────────────────────────────┘│
│ │
└─────────────────────────────────────────────────────────────────┘Bonding Tier Updates (L-tokens)
L-tokens get favorable bonding rates since they're yield-bearing:
| Tier | Collateral | Discount Range | Lock Period |
|---|---|---|---|
| S | USDC, USDT, DAI | 3-8% | 5 days |
| A | ETH, WBTC | 5-12% | 7 days |
| A+ | LETH, LBTC | 6-14% | 7 days |
| B | PARS | 8-18% | 14 days |
| B+ | LPARS | 10-20% | 14 days |
| C | CYRUS, MIGA | 10-22% | 21 days |
| C+ | LCYRUS, LMIGA | 12-24% | 21 days |
| D | LP tokens | 12-25% | 28 days |
Withdrawal Queue
To ensure solvency, withdrawals may be queued during high demand:
solidity
interface IWithdrawalQueue {
/// @notice Request withdrawal (instant if liquidity available)
/// @param amount L-tokens to withdraw
/// @return requestId Withdrawal request ID (0 if instant)
function requestWithdrawal(uint256 amount) external returns (uint256 requestId);
/// @notice Claim queued withdrawal
/// @param requestId The withdrawal request ID
function claimWithdrawal(uint256 requestId) external;
/// @notice Check if withdrawal is claimable
function isClaimable(uint256 requestId) external view returns (bool);
/// @notice Time until withdrawal is claimable
function timeUntilClaimable(uint256 requestId) external view returns (uint256);
}Governance Parameters
| Parameter | Default | Description |
|---|---|---|
withdrawalDelay | 0-7 days | Queue delay when reserve < 10% |
reserveRatio | 10% | Minimum liquid reserve |
maxDepositCap | Variable | Per-token deposit limit |
strategyAllocation | Per-token | Yield strategy weights |
performanceFee | 10% | Fee on yield (to treasury) |
Security Considerations
Depeg Risk
- L-tokens should trade at or near 1:1 with underlying
- Arbitrage keeps peg stable (deposit cheap, withdraw expensive)
- Oracle price feeds use TWAP to resist manipulation
Smart Contract Risk
- Yield strategies vetted by AMN Committee
- Strategy caps limit exposure per strategy
- Emergency withdrawal to reserve
Liquidity Risk
- 10% reserve ensures most withdrawals instant
- Queue system for high-demand periods
- Priority withdrawal for long-term holders
References
Copyright
Copyright and related rights waived via CC0.