sLIQUIDIUM: Introducing Bitcoin’s DeFi Liquid Staking Token
12 may 2025
TL;DR
sLIQUIDIUM is Liquidium’s liquid staking token on Bitcoin Runes.
Stake LIQUIDIUM → receive sLIQUIDIUM; 30 % of daily loan fees purchase LIQUIDIUM and are sent to the staking contract.
The sLIQUIDIUM ↔ LIQUIDIUM exchange rate rises each day as rewards accrue; new stakers mint at the current rate, preserving fairness.
sLIQUIDIUM remains fully transferable, tradable against BTC, and usable as collateral on Liquidium while carrying the same governance weight and fee‑rebate status as LIQUIDIUM.
This is the first Rune‑based LST for a live Bitcoin DeFi protocol, expanding Bitcoin’s DeFi toolkit with true liquid staking.
1. What Are Liquid Staking Tokens?
Staking secures a network or protocol, but the trade‑off has always been liquidity: once tokens are locked, they can’t be used elsewhere. Liquid Staking Tokens (LSTs) fix that by issuing a transferable receipt token that mirrors the underlying stake and automatically gathers the same rewards. Holders keep their yield and their flexibility.
Two common designs have emerged:
Model | How Rewards Appear | Representative Examples |
|---|---|---|
Rebasing | The LST balance increases while its price stays close to 1:1 with the underlying. | Lido’s stETH (Ethereum) |
Reward‑bearing | The LST balance stays fixed; its market price drifts upward as rewards accumulate. | Rocket Pool’s rETH (Ethereum), Jito’s JitoSOL (Solana) |
Because LSTs remain liquid, they are widely used as collateral, in liquidity pools, and across DeFi money markets.
2. Why LSTs Matter for Bitcoin
For years, Bitcoin lacked a native fungible‑token framework, so LSTs were largely confined to smart‑contract chains. That changed with Runes, which allow fungible tokens to live directly on Bitcoin Layer 1. The experimentation began with sUSDh, a yield‑bearing stable‑asset LST. Now, Liquidium is bringing the concept to a protocol‑governance token with sLIQUIDIUM.
3. How STAKED•LIQUIDIUM (sLIQUIDIUM) Works
LIQUIDIUM•TOKEN (LIQUIDIUM) is the governance and fee‑sharing token of Liquidium, Bitcoin’s leading decentralized peer‑to‑peer lending protocol. Proposal LIP‑12 introduces a staking module that converts LIQUIDIUM into sLIQUIDIUM at an exchange rate that evolves over time.
Stake – Deposit LIQUIDIUM and receive sLIQUIDIUM. At launch the rate is 1 LIQUIDIUM = 1 sLIQUIDIUM.
Daily Rewards – Thirty percent of Liquidium’s daily loan fees are used to purchase LIQUIDIUM, which is then sent to the staking contract.
Rising Exchange Rate – Because the pool of LIQUIDIUM inside the contract grows every day while the supply of sLIQUIDIUM stays fixed, each sLIQUIDIUM gradually represents more LIQUIDIUM. Example: if the pool grows by 2 %, the next day 1 sLIQUIDIUM might equal 1.02 LIQUIDIUM.
New Stakers – Anyone who stakes later mints sLIQUIDIUM at the current exchange rate, not 1:1. This keeps the value of every sLIQUIDIUM equal and prevents late entrants from diluting early stakers.
Unstake – After a 7‑day cooldown, holders can redeem their sLIQUIDIUM for the underlying LIQUIDIUM plus all accumulated rewards.
In short, the conversion rate rises automatically as protocol revenue flows into the pool, and that rate applies equally to everyone at the moment they join.
4. Benefits for Holders and the Ecosystem
Benefit | What It Means |
Passive Yield | Holders earn a share of protocol revenue without managing claims or gas. |
Liquidity | sLIQUIDIUM can be traded—initially on sLIQUIDIUM/BTC pairs—and integrated into future Bitcoin‑native DeFi tools. |
Collateral Utility | Users will be able to pledge sLIQUIDIUM as collateral on Liquidium’s peer‑to‑peer lending marketplace. |
Equal Governance & Rebates | Each sLIQUIDIUM carries the same voting power and fee‑rebate status as an equivalent amount of LIQUIDIUM. |
Pure Bitcoin Settlement | Staking relies on partially‑signed Bitcoin transactions (PSBTs) and Runes—no bridges or wrapped assets. |
5. How sLIQUIDIUM Compares to Other LSTs
Chain | Token | Reward Style | Distinguishing Feature |
Ethereum | stETH | Rebasing | Largest LST by market cap |
Ethereum | rETH | Reward‑bearing | Powered by permission‑less mini‑pools |
Solana | JitoSOL | Reward‑bearing | Captures MEV yield on top of staking |
Bitcoin | sLIQUIDIUM | Reward‑bearing | First Rune‑based LST for a DeFi protocol |
Bitcoin | sUSDh | Reward‑bearing | Yield‑bearing stablecoin LST |
6. Road Ahead
sLIQUIDIUM will ship immediately after the community approves LIP‑12. Early milestones include:
Launching the sLIQUIDIUM/BTC market on emerging Bitcoin DEXs.
Enabling sLIQUIDIUM as collateral across Liquidium’s peer‑to‑peer loans.
Expanding integrations with other Bitcoin‑native DeFi primitives.
With sLIQUIDIUM, Bitcoin gains its first DeFi liquid staking token, giving LIQUIDIUM holders a way to support the protocol, capture revenue, and stay fully flexible at the same time.
Read LIP‑12, join the discussion, and get ready to put your LIQUIDIUM to work—liquidity included.