Liquid Staking Derivatives

As of 02/01/2025

Liquid Staking Derivatives (LSD) or Liquid Staking Tokens (LST), are the tokens users receive when they stake their assets in the Hatom Liquid Staking Protocol. These tokens represent the user’s initial stake and the staking interest that accumulates over time.

In the Hatom Ecosystem, you will interact with the following Liquid Staking Derivatives:

Staked EGLD (sEGLD)

sEGLD is the token users receive when they stake their EGLD through the Hatom Liquid Staking Protocol. It represents a tokenized version of their staked EGLD position and accumulates interest through staking rewards, mirroring the staking process within the EGLD ecosystem.

Users can exchange sEGLD for EGLD + staking rewards through the Unstake tab in the Liquid Staking App.

In Hatom Liquid Staking, rewards are auto-compounded into the value of the sEGLD token rather than distributed as additional tokens. This means the value of each sEGLD gradually increases with the staking APY, but the quantity of sEGLD tokens in your holding remains unchanged.

Staked Wrapped TAO (swTAO)

swTAO is the receipt token users receive when they stake their wTAO through Liquid Staking. It functions similarly to sEGLD, as the staking rewards are compounded into the token's price.

Users participate in wTAO Liquid Staking directly on MultiversX, where tokens are transferred to a validator via the TAO Bridge. A snapshot of wTAO holdings is taken to calculate rewards, and based on this snapshot, Bittensor rewards are calculated and bridged the following day. The backend system automates all reward calculations and liquid staking activities, ensuring a seamless and efficient staking process.