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Escher.Finance is redefining liquid staking and cross-chain interaction with its innovative chain-abstracted solution. Built on Union and Nomos, Escher enables users to stake, liquid stake, and re-stake assets across multiple blockchain ecosystems—all without leaving their native chain. By removing the complexities of managing multiple wallets and gas tokens, Escher delivers a seamless user experience, making decentralized finance more accessible for individuals and institutions alike.
At its core, Escher leverages the hidden layer concept to power decentralized, secure, and flexible staking operations. This architecture allows users to stake directly from any supported chain—such as staking from Base to Celestia—without needing direct interaction with the target network. Users retain full ownership of their staking positions, which can be tokenized, traded, or used as collateral.
Built on IBC interoperability, Escher seamlessly connects Ethereum, Cosmos SDK chains, and emerging networks like Solana and Berachain, bridging liquidity and staking opportunities across ecosystems.
Escher is more than just a staking solution—it’s an interoperability layer that unifies fragmented blockchain ecosystems. By enabling chains to tap into Ethereum’s liquidity and unlocking new DeFi opportunities for users, Escher strengthens both network security and capital efficiency. This user-centric, interoperable, and flexible approach makes Escher the foundation for the next evolution of blockchain connectivity and decentralized finance.
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
Staking: Users deposit tokens into a liquid staking protocol.
Receiving LSTs: The protocol issues liquid staking tokens (LSTs) that represent the staked assets.
LST Functionality:
Fully transferable like any cryptocurrency
By improving capital efficiency and reducing opportunity costs, liquid staking ensures users maintain access to their funds while contributing to network security.
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
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.
Authz is a permission framework that we grant to the ICA account and the liquidity contract, enabling them to perform specific functions on behalf of the user.
ICA Account Permissions:
Stake: Allows the ICA account to stake tokens securely on the user’s behalf.
Unbond: Enables the ICA account to unbond staked tokens as requested by the user.
Liquidity Contract Permissions:
Restake: The liquidity contract is authorized to restake tokens automatically, optimizing yield without user intervention.
By granting these specific permissions, Authz ensures secure and efficient operations while maintaining control over defined actions. This structured approach enhances the user experience, allowing for automated staking processes and seamless asset management across various chains. Read more about Authz module .
Overview eBABY is the liquid staking token (LST) for the Babylon Chain, designed to allow users to earn staking rewards while retaining liquidity. Instead of locking assets traditionally, users stake through Escher and receive eBABY—an LST that can be used across DeFi without giving up yield.
Escher's hidden layer architecture powers eBABY, offering instant issuance, composability, and cross-chain functionality for a better staking experience.
How eBABY Works When users stake BABY tokens on the Babylon Chain via Escher, they receive eBABY tokens in return. These tokens reflect their staked position and accrue staking rewards over time. The value of eBABY increases relative to BABY as staking rewards are added, meaning eBABY is not pegged 1:1 to BABY but appreciates over time.
Account abstraction in cryptocurrency decouples transaction validation logic from account infrastructure. Unlike traditional sequential signing in blockchains like Ethereum, it allows for flexible methods such as multi-signature transactions and custom authentication. This enhances security, user experience, and enables a programmable ecosystem for blockchain accounts.
Reflects accrued staking rewards over time
Growth of Staked Pool: The underlying staked assets continue earning rewards, increasing the LST’s value.
Redeeming Staked Tokens: Users can redeem LSTs for the original tokens plus rewards when unstaking.
To ensure accessibility and convenience, users can connect to our app using either their email, a social account such as Google, or Passkey. The Passkey feature enables users to connect using their device's biometric authentication, such as fingerprint or facial recognition, further simplifying the onboarding process and enhancing the overall user experience.
Our app leverages Turnkey for implementing account abstraction features, providing flexibility and security by enabling innovative interactions with blockchain accounts. Additionally, users can connect using traditional wallets like MetaMask, offering a familiar interface for blockchain transactions.
Stake BABY Tokens – Users deposit BABY or supported assets into Escher’s staking contract.
Receive eBABY – The protocol mints and issues eBABY tokens, reflecting the user’s stake.
Use eBABY in DeFi – eBABY can be utilized across lending, trading, yield farming, and liquidity pools.
Redeem eBABY – Users can return eBABY to receive their underlying BABY tokens and accrued rewards after a 52-hour unstaking period.
Key Benefits of eBABY For Users:
Instant Liquidity – No lockup; access eBABY immediately.
Flexible Asset Support – Stake BABY and other supported tokens through Escher.
Composable Yield – Earn staking rewards and use eBABY in DeFi simultaneously.
Simplified Staking – All actions are handled via one-click experiences thanks to Escher’s EIP-7702 integration.
For the Babylon Chain:
Increased Security – More staking participation enhances network robustness.
Capital Efficiency – More liquidity across DeFi protocols.
Ecosystem Growth – Attracts users from other ecosystems via chain abstraction.
Network Info:
Liquid Stake Time: Immediate
Unstake Time: 52 hours
Staking Frequency: Every 360 blocks
Fee: 10% on rewards
Intent Available: Yes
Stake with Other Tokens: Supported through Escher’s swap infrastructure
At it’s core, Voyager is a virtual machine. The instructions of the program it executes describe how to fetch data from chains, how to aggregate that data, and how to send messages back to the chains. A postgres-based priority queue is used to store the messages, utilizing postgres’ transactional integrity to ensure no invalid state is reached. This allows us to take the “let it fail” approach when it comes to error handling - since no state is held within the application itself, Voyager can crash and restart safely without corrupting it’s state or missing packets.
The Hidden Layer Contract is a core innovation in Escher’s architecture, designed to abstract staking, liquidity movement, and execution across multiple chains. Instead of requiring users to interact directly with multiple blockchains, the hidden layer automates cross-chain processes in the background, creating a seamless staking and DeFi experience.
By acting as an execution layer between chains and applications, the hidden layer contract enables chain-abstracted interactions, making Escher’s liquid staking protocol truly interoperable, efficient, and decentralized.
Traditional cross-chain interactions often require bridging, manual network switching, and multiple wallet interactions. The hidden layer contract eliminates this friction by:
Automating Transactions
Users initiate staking, unstaking, or liquidity operations from any supported chain, while the hidden layer handles execution in the background.
No need for users to manually bridge tokens or interact with smart contracts on multiple networks.
For more info check our last
EIP-7702 (Set EOA account code for one transaction) allows regular wallets (EOAs) to temporarily act like smart contracts for a single transaction. This means users can execute complex operations that normally require multiple steps—all within one transaction while keeping their familiar wallet experience.
Escher leverages EIP-7702 to enable one-click cross-chain liquid staking:
Approve tokens for spending
Swap tokens
Bridge tokens to staking chain
Stake tokens on destination chain
Result: 4+ transactions, high gas costs, complex UX
User clicks "Stake" on any supported token
Single EIP-7702 transaction handles everything:
Token approval and transfer
swap token
Result: 1 transaction, lower gas costs, simple UX
One-Click Staking: Stake any token from any supported chain instantly
Gas Efficient: Single transaction instead of 5+ separate transactions
Cross-Chain Seamless: Use Union bridge automatically in the background
LSTs to Destination: Receive liquid staking tokens back on your preferred chain
Cross Chain: Stake ETH on Ethereum → Get eBaby on Ethereum
Any Token: Stake any supported token → Auto-convert → Stake on destination → Get LSTs back
This makes liquid staking as simple as a single click while maintaining all the power of cross-chain operations through Union's infrastructure.
Union serves as the Interoperability communication layer between chains, regardless of their consensus mechanisms. By leveraging the Voyager solution to open channels for messaging and USC01 for asset transfers, Union enables seamless interaction across different blockchain networks.
How It Works:
Voyager for Messaging: Voyager establishes secure channels between chains, allowing for smooth message exchanges across different networks.
USC01 for Asset Transfers: Assets can be moved across chains using the USC01 relayer, ensuring that tokens can flow freely and securely between networks.
UCS03: enables the exchange of arbitrary messages between chains connected to Union’s interoperability framework. This allows applications to send custom logic or commands (beyond simple asset transfers) securely and efficiently.
Unified Asset Usage:
Union’s Interoperability enables users to utilize the same tokens across different chains, thanks to its stack architecture. For example, a user on Berachain can liquid stake into Union, send the tokens to Arbitrum, use them in DeFi protocols there, and then redeem the tokens back from Arbitrum.
This seamless integration allows users to move assets, participate in DeFi, and engage in staking activities across various ecosystems without the need to switch wallets or navigate complex processes. Union’s interoperability stack breaks down the barriers between chains, making cross-chain interactions simple and efficient. Read more on .
The Union network is a hyper-efficient zero-knowledge infrastructure layer for general message passing, asset transfers, NFTs, and DeFi. It’s based on consensus verification and has no dependencies on trusted third parties, oracles, multi-signatures, or MPC.
Union uses advanced Zero-Knowledge Cryptography and BLS signatures to bring the fastest and most secure inter-blockchain communication protocol, IBC, everywhere.
For those who care about decentralization and reliability, and believe that finance should be accessible for everyone.
Union is developed to be a scalable powerhouse:
Fast: bridging transactions are generated and settled quickly.
Secure: abide by fork-choice rules.
Future proof: core tech is built for the next decennium.
Easy to use: high-level API usable for developers from any ecosystem.
Escher.Finance enables users to liquid stake and redeem their tokens from anywhere, thanks to the interoperability capabilities of Union. This means seamless interaction between different blockchain networks without users needing to understand the underlying complexity—stake tokens from any supported chain, have them staked on any other chain, and receive liquid staking tokens (LSTs) wherever you prefer.
The revolutionary aspect of Escher is the ability to stake on one chain and redeem on another. For example, you can stake ETH on Ethereum but redeem your liquid staking tokens on Base, or stake USDC on Arbitrum but unstake and receive your original assets on Optimism.
Union bridge interaction
Cross-chain staking
LST minting and return
No Technical Knowledge: Users just click stake—everything else is automated
Use any token: Can use any token to stake
Escher's architecture enables true cross-chain flexibility:
Stake Anywhere: Initiate staking from any supported chain
Redeem Anywhere: Unstake and receive tokens on any other supported chain
Chain Independence: Your staking position isn't tied to a specific chain
Seamless Migration: Move your liquidity between chains without losing staking rewards
We have designed Escher's architecture to support a single version of the token as it moves through the Union chain, which acts as a central router:
Centralized Token Management: Single token version ensures consistency
Efficient Routing: Union chain optimizes cross-chain token flow
IBC Mint-and-Burn Mechanism: Utilizes proven Inter-Blockchain Communication protocol
Liquidity Consolidation: All liquidity flows through the Union router for maximum efficiency
Escher LSTs (eTokens) work consistently across all supported chains:
Same functionality regardless of origin or destination chain
Composable with DeFi protocols on any chain
Standardized reward distribution mechanisms
Cross-chain transferability through Union's infrastructure
The contract ensures that transactions are processed using decentralized validators and relayers, avoiding reliance on centralized intermediaries.
Escher leverages Union and ZK technology to secure operations and maintain trustless execution.
Interoperable Staking & Liquidity Flow
Users can stake from one chain and receive liquid staking tokens (LSTs) on another chain without needing to interact with the destination network.
The hidden layer also facilitates cross-chain liquidity balancing, ensuring assets move dynamically based on demand and available liquidity.
Seamless Direct dApp Connectivity Across Chains *Chain Abstraction as a Service*
Nomos is a cutting-edge protocol designed to solve one of chain abstraction’s most difficult and pressing problems: direct dApp connectivity across diverse blockchain networks. By leveraging the IBC protocol and other solutions, Nomos enables users and projects to effortlessly connect to different dApps from their home chain without requiring any changes to the dApp's code. It supports integration with multiple chains, including ETH L2, EVM, Cosmos, SVM, MoveVM, and more, providing a smooth and integrated experience with a wide range of dApps.
Nomos' vision targets three main objectives:
Users: Solve the UX problem on Web3, making blockchain applications more user-friendly and accessible.
Developers: Enable developers to build on the chain that technically fits their needs, rather than being constrained by user adoption and liquidity issues.
Chains: Allow blockchains to focus on what they do best and what they were built for, while connecting them to other ecosystems seamlessly.
Key Concept of Nomos: Seamless dApp Connectivity
The key concept of Nomos is seamless dApp connectivity. Nomos is built differently from other chain abstraction projects, enabling it to connect to any dApp seamlessly without requiring changes to the dApp's code. You can read more about this in the
Core Developments
Our core developments are built around three concepts:
Account Accessibility: Accounts can connect seamlessly to every dApp, allowing one account from your favorite chain to control all your assets.
Tailor-Made Smart Contracts: Smart contracts are built for specific VMs to ensure modularity and adaptability to any use case.
Secure Implementation and Optimization: Our solutions are designed with security and optimization in mind to ensure robust and efficient operations.
Key Terms for the documents:
Controller Chain: The chain that the user is working on, also known as the main chain.
Host Chain: The chain that the user is connecting to for a dApp or other purposes, where the ICA/smart account is launched and executed.
Relayer: The entity responsible for moving messages/packets across the bridge, and also for paying the gas on the other side.
Packets: The data units transmitted across the bridge between chains.
With Nomos' unique architecture, we aim to create win-win situations for both chains using chain abstraction. The use of smart accounts on the controller chain provides active users and generates gas and dApp fees, while the host chain retains the user and liquidity, also getting paid in gas fees.
Seamless Direct dApp Connectivity is a method that allows decentralized applications (dApps) to connect and interact with dApps on different blockchain networks without requiring any changes to their existing code or the need to redeploy their contracts on other chains. This approach ensures that dApps can communicate and operate across multiple blockchains effortlessly, providing a unified and efficient user experience without the complexities of multi-chain integration.
Here is how direct connect not with Nomos looks like:
Unlike other chain abstraction solutions, Nomos architecture can connect with dApps without the dApp even knowing that Nomos is integrated with them. This is possible due to Nomos' unique design, which allows seamless integration and connectivity without requiring any modifications to the dApp's existing codebase. This approach simplifies the process for developers and enhances the overall user experience by ensuring smooth interactions across different blockchain networks.
Nomos solution:
eU is the liquid staking token (LST) for the Union Chain, enabling users to earn staking rewards without locking up their assets. By staking U tokens via Escher, users receive eU tokens—a liquid representation of their staked position—that can be used across DeFi protocols while still accruing yield.
Escher's hidden layer architecture powers eU, delivering deep interoperability, seamless liquidity, and efficient staking across multiple blockchain ecosystems.
Stake U Tokens Users stake U tokens through Escher's liquid staking contract.
Receive eU Tokens The protocol mints eU tokens, representing the user’s staked balance.
Use eU in DeFi Users can deploy eU in DeFi strategies: lending, borrowing, trading, LPing, and more, within and beyond the Union ecosystem.
Redeem eU for U At any time, users can redeem eU for the underlying U tokens plus accrued staking rewards, adjusted for the protocol's yield.
For Users:
Liquidity and Flexibility: Access capital while earning staking rewards.
Yield Optimization: Combine staking rewards with additional DeFi yields.
Simplified Experience: One-click staking, no need to manage multiple wallets.
Cross-Ecosystem Compatibility: Use eU across non-Cosmos chains via Escher's chain abstraction.
For the Union Chain:
Stronger Network Security: Increased staking participation through liquid staking.
Higher Liquidity: eU drives more efficient capital usage across Union-based DeFi.
Interoperability: Brings more users and applications by enabling use of eU across ecosystems.
Liquid Stake Time: Immediate
Unstake Time: 21-24 Days
Fee: 10%
Intent Available: Yes
Multi-Asset Support: Users can stake using any token (via swap and stake mechanisms)
Chain abstraction refers to the process of creating a unified interface or layer that allows developers to interact with multiple blockchain networks without needing to handle the unique details and complexities of each one. By abstracting the differences between blockchains, developers can write their code once and deploy it across different chains seamlessly. This abstraction layer handles the nuances of each blockchain, such as consensus mechanisms, transaction formats, and communication protocols, providing a consistent experience for developers and users.
The liquid staking protocol is a core component of Escher’s architecture. It is built on CosmWasm and EVM, deployed across the Union Chain, Babylon, and Ethereum L1. This protocol manages the entire lifecycle of liquid staking, from initial stake to reward distribution.
Staking – Allows users to stake their tokens.
Minting – Issues liquid staking tokens (eTokens) representing staked assets.
Burning – Enables users to burn eTokens to reclaim the underlying assets.
Auto-restaking – Automatically compounds rewards for higher yield.
The exchange rate ensures that eTokens reflect the underlying staked assets and accrued rewards:
Exchange Rate = (Total Staked Tokens + Unclaimed Rewards) ÷ Total eTokens Issued
Each chain has different parameters and architectural considerations. Below we describe the Union Chain implementation.
The eU staking mechanism
Staking Hub (CosmWasm on Union Chain)
Responsible for minting and burning eU.
Handles staking and unbonding requests in batches.
Maintains the eU:U ratio, updated periodically with reward data from Union Chain.
Executes the actual staking of U tokens.
Cross-chain communication between these contracts is handled by the Union ZKGM (usc03) relayer, which securely transmits both messages and tokens.
The user connects through Escher’s chain abstraction layer from any supported chain.
The user stakes U tokens into the LST contract and receives eU in return.
The cross-chain messaging system batches and transfers the tokens to the Union staking hub.
Once the batch is processed, the staking hub updates the LST contract with the new ratio.
The user connects from any supported chain and sends eU to the LST contract for burning.
Depending on liquidity in the LST contract:
Immediate Redemption: If available U ≥ (eU × ratio), the user receives U instantly without waiting.
Delayed Redemption: If liquidity is insufficient, the request is forwarded to Union Chain. The user must wait the standard
⚠️ Note: The cooldown period is enforced by the Union Chain itself, not by Escher.
Escher’s Babylon integration provides liquid staking for BABY, the native staking token of Babylon. The protocol issues eBABY, a CosmWasm-native liquid staking token deployed directly on Babylon Chain.
Unlike Union’s eU (which splits logic between an EVM LST contract and a CosmWasm staking hub), eBABY exists fully on Babylon. Users can still access eBABY seamlessly from other chains through Escher’s chain abstraction layer and Union’s cross-chain messaging.
Staking – Stake BABY directly on Babylon and receive eBABY instantly.
Minting – eBABY is minted natively on Babylon, representing staked BABY + rewards.
Burning – eBABY can be burned to reclaim BABY, either instantly (if liquidity is available) or after Babylon’s unbonding period.
Auto-restaking – Rewards are compounded automatically, increasing the exchange rate of eBABY.
The Babylon LST architecture is simpler than Union’s because it is fully CosmWasm-based:
eBABY Contract (CosmWasm on Babylon)
Handles minting and burning of eBABY.
Stakes BABY with validators.
Collects and auto-restakes rewards.
User connects to Escher from any supported chain via chain abstraction.
User stakes BABY (directly or via bridged tokens).
The eBABY contract on Babylon mints eBABY immediately.
BABY is staked with validators, and rewards are auto-compounded.
User sends eBABY to the Babylon eBABY contract to burn.
the request enters Babylon’s 2 day unbonding period.
Once the cooldown ends, BABY is automatically transferred back to the user.
⚠️ Note: Cooldown is enforced by Babylon natively. Escher only manages the abstraction and liquidity layer.
Escher's liquid staking protocol employs an auto-restaking mechanism that compounds rewards frequently, maximizing returns for stakers. Let's explore how this compounding effect works and compare it to non-compounding staking.
Term to maximize:
where
P: Final value of staked tokens.
𝑘: Initial stake amount.
𝑟: Annual Percentage Yield (APY) (in decimal form).
𝑛: Number of times rewards are claimed and re-staked per year.
𝑓: Transaction fee. Must be reward claim fee + re-stake fee.
Here's a comparison of growth for an initial stake of 1000 tokens over the course of a year:
Unbonding – Manages the process of unstaking tokens, respecting each chain’s native rules.
Reward Claiming – Distributes staking rewards to users.
Collects rewards and fees.
Processes unbonding requests.
The user continues earning yield, while eU remains liquid and usable across DeFi.
After the cooldown ends, the user automatically receives U back in their wallet – no manual claim required.
Unbonding – Native 21-day Babylon cooldown applies when liquidity is insufficient.
Chain Abstraction Access – Users from Ethereum, Cosmos, or any Union-connected chain can interact with eBABY as if it were local.
Processes unbonding requests.
Maintains the exchange ratio (eBABY:BABY).
Union Relayer + Chain Abstraction Layer
Enables access to the eBABY contract from any connected chain.
Handles secure cross-chain token + message passing (via Union ZKGM, usc03).
Allows a user on Ethereum, Osmosis, or other ecosystems to stake into eBABY without ever holding native BABY first.
The user holds liquid eBABY, usable across DeFi and other ecosystems.
The CW4626 Escher Vault is a CosmWasm vault (ERC-4626 inspired) designed for the U token as its underlying. It automates liquidity provisioning, staking, incentive claiming, and redemptions, while exposing a familiar deposit/mint/withdraw/redeem interface.
Manager
Bonds underlying U into LP/staking.
Executes add/remove liquidity.
Swaps and claims incentives.
Underlying Token – Native U, basis for deposits/withdrawals and accounting.
Share Token – CW20 vault shares (same decimals as U).
Pool – The vault strategy centers on the eU pool, where U is converted to eU and deployed for liquidity and staking.
Incentives
Entry Fee – Applied on deposit/mint.
A percentage of gross shares is minted to the fee recipient.
PreviewDeposit returns net user shares after fee deduction.
User deposits U.
Vault calculates gross shares from total_assets / total_shares.
Shares are split into:
user_shares
Manager moves a portion of U into the eU pool (via hub).
Converts U into eU and LP positions with slippage control and unique salt.
Manager pairs U/eU as needed.
Mints LP shares and deposits them into the incentives contract.
Manager claims accumulated rewards (U, eU, BABY) back into the vault.
request_redeem
Locks user shares.
Returns preview of expected asset distribution (U + eU + BABY), valued via oracle.
Standard:
Asset, TotalAssets, ConvertToShares/Assets, MaxDeposit/Mint/Withdraw/Redeem
PreviewDeposit
Includes U + eU + BABY rewards (valued via oracle).
Excludes locked shares to maintain fair PPS.
manager and oracle role vectors maintained on-chain.
Only authorized addresses may call privileged endpoints.
Oracle prices must be strictly positive and cover U, eU, and BABY.
Slippage tolerance enforced in liquidity operations.
salt validated to prevent replay.
managers, oracles
underlying_token = U
share_name/symbol/marketing
oracle_update_prices
deposit (with user_shares_minted, fee_shares_minted, entry_fee_rate)
bond
Oracle must initialize prices for U, eU, and BABY before vault operations.
Preview endpoints simulate expected outcomes; real results may differ slightly.
If entry_fee_recipient = depositor, all shares accrue to the same account.
At Escher, we’ve always believed that Liquid Staking Tokens (LSTs) must go beyond just locking assets. An LST only has value if it can interact with DeFi, generate real yield, and outperform vanilla staking.
But how do you ensure that increased TVL in a DEX, lending protocol, or LP pool actually translates into better returns for your LST holders?
Today, we’re excited to unveil the answer: The Injection Protocol — Escher’s native mechanism to capture DeFi yield and return it directly into the staking economy, increasing APR without inflating token supply.
Escher is deploying strategic positions across various DeFi protocols using its chain-abstracted LST design. Because Escher operates cross-chain, we can build flexible strategies that extract real yield — not just speculative points farming.
While point systems are trending, they’re unpredictable and often controlled by internal team discretion. Escher is focused on something more sustainable: real token flows and predictable APR directly into your eBABY position.
Escher opens a strategic position (e.g., LP on Tower, lending on Euler, etc.)
Escher collects protocol fees (usually in BABY)
Escher injects those BABY fees back into the staking vault, without minting new eBABY
Resulting in a boost in value of each eBABY
This creates a positive feedback loop between the DeFi protocol and the eBABY token:
Higher DeFi usage → more fees → more BABY injected → higher eBABY value → more staking demand.
Each eBABY is backed by a pool of staked BABY tokens.
Where:
= total BABY backing
= total eBABY supply
= value of one eBABY
Each month, Escher injects an additional amount of BABY () into the staking vault, without minting new eBABY:
This increases the value of each eBABY over time — boosting user APR without token inflation.
The APR from injection alone:
Where:
= Monthly BABY added to the vault
= Total eBABY supply
And total APR becomes:
In typical staking systems, APR decreases as more tokens are staked:
More stakers → smaller piece of the pie.
But Escher’s Injection Protocol breaks that pattern.
The injected rewards come from external DeFi strategies, not the chain’s inflation or validator pool. This means:
The injected BABY is not split proportionally by staked supply.
It's added directly to the vault without minting new eBABY.
More capital does not reduce APR, and might even increase it, if the strategies scale efficiently.
This mechanism creates non-dilutive APR:
It doesn’t rely on new token issuance
It’s not capped by on-chain inflation curves
It’s fueled by real usage and strategy performance (e.g. LP fees, lending yield)
This leads to one of the core benefits of the Injection Protocol:
More TVL → more DeFi activity → more fees → more BABY injections → higher APR.
Not the other way around.
This model makes holding eBABY more rewarding than native staking, while maintaining decentralized infrastructure and avoiding token inflation. It’s fully composable, chain-abstracted, and aligned with real usage — not speculative hype.
Native Staking with Escher (in production)
Escher takes native staking to the next level by introducing a personal, user-specific ICA controller. Unlike liquid staking solutions, Escher doesn’t create LSTs for native staking. Instead, each user is assigned a unique ICA controller that facilitates direct staking on target chains. This approach ensures that rewards are sent directly to the user’s wallet, offering a streamlined and efficient staking experience.
What sets Escher apart is the added utility of the ICA controller. These controllers are transferable and can be tokenized as NFTs, unlocking new financial opportunities. Users can sell their staking positions or use them as collateral for lending and borrowing in DeFi protocols, turning staking positions into versatile financial assets. This functionality bridges the gap between staking and DeFi, giving users unprecedented flexibility and control over their staked assets.
By enabling governance participation and staking rewards while maintaining personal ownership of the ICA controller, Escher empowers users to fully engage with the blockchain ecosystem. This innovative approach combines staking, governance, and DeFi utility into a unified, user-centric experience.
Oracle
Updates the price map for LP other-side assets and incentive tokens.
Marketing
Uses CW20-base’s built-in marketing messages (e.g., name, symbol, logo).
Oracle Prices – Map of token_address → Decimal price in terms of U.
Must include:
eU
U
BABY
fee_shares → fee recipient.
Manager unwinds positions.
Assets distributed to user.
Locked shares burned.
PreviewMintExchangeRateOracle:
OraclePrices, OracleTokensList
Positions & Incentives:
LPPosition, AllPendingIncentives
Redemptions:
Request by ID
User redemption requests
Redemption stats
pool = eU
incentives[] = [U, eU, BABY]
tower_incentives, lp, slippage_tolerance, staking_contract
entry_fee_rate, entry_fee_recipient
add_liquidityremove_liquidityrequest_redemption / complete_redemption
claim_incentives
exchange_rate = total_assets / total_sharesEscher is a liquid staking protocol designed to bring chain abstraction, enhanced liquidity, and true interoperability to Proof-of-Stake (PoS) ecosystems. At its core, Escher enables users to stake tokens from one chain and receive a liquid staking token (LST) on another, all while earning staking rewards in the background.
Escher's architecture is built on three fundamental components:
The chain abstraction layer allows users to interact with Escher from any supported chain. Through integrations with technologies like Union and advanced cross-chain messaging protocols, Escher abstracts away the complexities of cross-chain operations. Users can stake native tokens from their preferred environment (e.g., Ethereum, Cosmos) and receive liquid staking tokens on the same chain or another supported one.
This is the backbone of Escher's staking logic. It manages staking operations, validator selection, reward distribution, and withdrawal mechanisms. It also ensures staking security and network health by implementing validator set diversification and penalties. Escher supports multiple tokens and chains, optimizing delegation across validators through direct protocol integrations.
The Injection Protocol is Escher's economic innovation. It captures fees and yields generated across DeFi protocols (e.g., LP fees, bribes, rewards) and reinjects them into the staking pool without minting new LSTs. This increases the intrinsic value of each LST over time, raising the APR for holders beyond the base staking yield.
Cross-Chain Flexibility: Stake on one chain, receive LST on another
DeFi-Ready LSTs: Tokens like eBABY and eU can be used across DeFi protocols (e.g., Uniswap, Pendle, Euler)
Instant Issuance & Low Unstaking Times: Get LSTs instantly; unstake with short cooldowns
Modular Architecture: Support for multiple networks and assets through standardized relayer components and direct protocol integrations
Escher.Finance utilizes the Union framework and advanced cross-chain messaging to provide a seamless liquid staking experience across different chains and ecosystems. The architecture enables users to stake assets from an EVM chain to another chain (e.g., Chain C) through a modular and fully chain-abstracted approach. This solution leverages direct protocol integrations and optimized cross-chain communication for efficient and scalable operations.
Users initiate liquid staking by interacting with a smart contract deployed on the Union chain. This contract acts as the gateway to the liquid staking protocol and manages all interactions between the user's EVM/altvm wallet and the target staking chain. The system is designed with a simplified architecture that eliminates the need for complex intermediate controllers—interactions are streamlined and managed directly through the Union chain contract.
Upon receiving the staking request, the Union chain's liquid staking protocol is triggered. This protocol:
Secures the user's assets on Union through cryptographic commitments
Issues LSTs representing the staked assets, which the user can use across DeFi protocols in the EVM ecosystem or beyond
Manages the entire staking lifecycle through direct protocol integrations
The liquid staking protocol leverages direct cross-chain messaging and protocol integrations to stake the user's assets onto Chain C. This process is fully automated:
The Union chain communicates directly with the target chain through optimized messaging protocols
Staking operations are executed through native protocol integrations on the destination chain
Users remain on their original EVM chain and do not need to manually interact with Chain C
All cross-chain communications are handled seamlessly in the background
Users receive liquid staking tokens on their original chain (e.g., Base or Arbitrum) while their staked assets are securely delegated to validators on the destination chain (e.g., Celestia or Berachain). The user:
Does not need additional wallets or gas tokens
Interacts only with their EVM/altvm wallet and the Union smart contract
Enjoys seamless cross-chain staking without manual involvement in staking processes on other networks
Benefits from full chain abstraction while maintaining security and decentralization
This architecture enables Escher to provide a unified liquid staking experience across diverse blockchain ecosystems. Users can stake assets from one chain to another without leaving their preferred network, thanks to the seamless integration of direct protocol communications and advanced cross-chain messaging. The removal of intermediate account abstractions simplifies the architecture while maintaining the same level of functionality and security.
The system's modular design ensures that new chains and protocols can be easily integrated as the ecosystem grows, providing users with expanding opportunities for cross-chain liquid staking without compromising on user experience or security.
