Liquid staking with Escher

Liquid Staking 101

What is Liquid Staking?

Liquid staking is a mechanism that allows users to stake their cryptocurrency while retaining liquidity. Unlike traditional staking, where assets are locked and inaccessible during the staking period, liquid staking provides a way to keep assets productive in DeFi while earning staking rewards.

Benefits of Liquid Staking

Liquid staking allows users to:

• Earn staking rewards without sacrificing liquidity

• Use staked assets in DeFi, including:

  • Participating in lending, borrowing, and yield farming

  • Engaging in restaking opportunities

  • Trading or transferring staked value

How Liquid Staking Works

1. Staking: Users deposit tokens into a liquid staking protocol.

2. Receiving LSTs: The protocol issues liquid staking tokens (LSTs) that represent the staked assets.

3. LST Functionality:

   • Fully transferable like any cryptocurrency

   • Reflects accrued staking rewards over time

4. Growth of Staked Pool: The underlying staked assets continue earning rewards, increasing the LST’s value.

5. Redeeming Staked Tokens: Users can redeem LSTs for the original tokens plus rewards when unstaking.

By improving capital efficiency and reducing opportunity costs, liquid staking ensures users maintain access to their funds while contributing to network security.

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Liquid Staking with Escher.Finance

Escher.Finance takes liquid staking to the next level with a chain-abstracted approach, allowing users to stake assets across multiple blockchain ecosystems without being locked into a single network.

Traditional staking restricts liquidity and limits token utility within DeFi. Escher eliminates these barriers by enabling users to stake on purpose-driven PoS networks while retaining access to their capital through LSTs. These LSTs can be used across DeFi protocols for lending, borrowing, trading, and yield farming—all while earning staking rewards.

How Escher’s Liquid Staking Works

Escher leverages:

• Union’s interoperability framework

• Nomos’ chain abstraction technology

• The Hidden Layer Concept

Instead of requiring users to interact directly with multiple chains, Escher’s hidden layer contracts handle staking, liquidity movement, and execution behind the scenes.

With this approach, users can:

• Stake assets from one network (e.g., Base, Arbitrum) into another (e.g., Celestia, Berachain) without interacting with the destination chain

• Eliminate the need for multiple wallets, gas tokens, or manual chain switching

Seamless Redemption and Interoperability

Escher enables LST redemption from any connected network:

• Example: A user staking from Base can use their LSTs within Base’s DeFi ecosystem or redeem them on Arbitrum, Celestia, or another supported network.

• Powered by IBC and the Hidden Layer, Escher provides true cross-chain interoperability for liquid staking.

More Than Liquid Staking: A New Era of Blockchain Connectivity

Escher is not just another liquid staking protocol—it’s a bridge between fragmented blockchain ecosystems. By enabling chains to tap into Ethereum’s liquidity and giving users more utility for their staked assets, Escher enhances network security, capital efficiency, and DeFi accessibility.

With Escher, staking becomes borderless, flexible, and fully interoperable, setting a new standard for blockchain cooperation and liquidity flow.