SUI Ecosystem
The Rise of Liquid Staking and vSUI Contract Infrastructure
Explore how liquid staking and the vSUI contract infrastructure are unlocking DeFi liquidity, optimizing validator management, and driving growth in the SUI ecosystem.
Volo Official
3.17.2025 16:00
🔹 Traditional Staking and the Need for More Flexibility
Within the DeFi space, staking is seen as a token allocation that generates steady returns. Staking is the process of locking tokens in validators to support the Proof-of-Stake (PoS) blockchain security and, in exchange, earn profits.
Traditional PoS require stakers to lock up their tokens for a specified duration to support network security and consensus. During this period, staked assets become illiquid and unusable, preventing token holders from leveraging them for other financial activities — they cannot be used elsewhere until unstaked.
This lack of flexibility has been a significant drawback. Hence, liquid staking, a solution to the illiquidity challenge, emerged, being the largest category of DeFi protocols in terms of total value locked, currently with a TVL of $51.2 billion.
Â
🔹 Unlocking Liquidity: Liquid Staking and vSUI
Liquid staking, a tokenized representation of staked assets in PoS blockchains, overcomes the illiquidity challenge of traditional staking, as its value is pegged to the staked tokens with the introduction of Liquid Staking Tokens (LSTs).
Our token, vSUI, allows users to stake their assets while retaining liquidity, enabling participation in lending, trading, and yield farming strategies. Unlike staked tokens, LSTs are not locked and can be freely traded.
As of today:
- SUI TVL: $1.557 billion
- SUI Liquid Staking TVL: $574.79 million
- Liquid staking growth (YoY): ~868.48% (as of Feb 14)
As the SUI ecosystem continues to expand, vSUI is set to play a crucial role in shaping the future of liquid staking, bridging the gap between staking rewards and DeFi accessibility.
Â
🔹 Optimizing Staking and Unstaking: The vSUI Contract Infrastructure
Our vSUI Contract Infrastructure optimizes the staking and unstaking processes by:
- Managing validator selection
- Automating stake distribution
- Ensuring the network decentralization, secure and high liquidity
This infrastructure is designed to eliminate intermediaries and fully utilize SUI’s native staking functionalities, ensuring efficient staking and unstaking while maintaining liquidity and stability in the ecosystem.
Unstaking process:
The system follows a priority-based approach, withdrawing funds from the lowest-priority validators first.
To further protect the protocol’s stability, we implemented a fee mechanism for immediate unstake requests, discouraging rapid liquidity drains and preserving yield consistency.
We aim to continuously strengthen our contract infrastructure, as it represents a critical component, and, as the ecosystem grows, vSUI will continue to be a driving force behind sustainable yield opportunities.
Â
🔹 Continuously Driving DeFi Growth in SUI
With an all-time high TVL of $230 million, we aim to stay as a cornerstone of the SUI ecosystem.
Our protocol has:
- Facilitated over $1 billion in volume
- Onboarded more than 40,000 users into DeFi
- Delivered more than 20 integrations
- Operated over a year without any slashing
We are glad to have the trust of over 31,000 users, with:
- More than $42 million in daily volume
- Representing 95% of all LST volume
- With an APR of 2.85%, ensuring competitive returns
Our focus remains on refining staking mechanisms, optimizing validator management, and ensuring seamless user experience while maintaining decentralization.
Whether you're a staker, trader, or DeFi enthusiast, join us in unlocking new opportunities in the SUI ecosystem!
Â