Staking is the process of holding a cryptocurrency to support the operations of a blockchain network. In return for staking Zilliqa, users earn rewards in the form of ZIL tokens. However, once a user stakes their tokens, they cannot typically access them until the end of the staking period, which means withdrawing their ZIL funds and waiting for the unstaking period.
To address this issue, the concept of liquid staking has emerged. Liquid staking allows users to stake their tokens and receive rewards, while also being able to use a new token called "liquid token" for other purposes. In other words, users can "unlock" their staked tokens and use their liquid tokens as collateral to borrow other cryptocurrencies or sell them on an exchange like TyronDEX.
The Avely team has developed a liquid staking protocol on Zilliqa that allows users to auto-compound their staking rewards. Moreover, this protocol introduces a new stZIL token, which enables users to quickly and easily "unstake" their funds and convert them back into their original ZIL cryptocurrency.
In the context of TyronDEX, users can sell their liquid staking tokens (stZIL) on one of our three supported decentralized exchanges, which effectively "unstakes" their tokens instantly. This is made possible by the integration of account abstraction (AA) into the TyronDEX platform. By allowing users to trade stZIL on the exchange, TyronDEX enables instant unstaking without requiring users to go through the traditional unstaking process, which typically takes around 2 weeks. Additionally, SSIs can choose to protect their funds with TYRON social recovery.
Overall, instant unstaking and liquid staking are exciting developments that are making staking more accessible and flexible for regular users. With the emergence of platforms like TyronDEX, users can now enjoy the benefits of staking while also being able to use their liquid tokens for other purposes, including selling them in exchange for the ZIL cryptocurrency, which is widely supported on many centralized exchanges like Binance.
In this example, we can see that although ZilSwap may not have the highest liquidity among DEXs, it provided the best expected output for a 1,000 stZIL trade.
Also, please note that the gas cost for this transaction is approximately 8 ZIL.