Introduction
Liquid Stake Units (LSUs) are fungible tokens issued by Validator Components when XRD is staked. Each validator issues its own unique LSU resource, representing a proportional claim on the validator's total staked XRD plus accrued emissions rewards.
Unlike traditional staking models where staked tokens are locked and illiquid, LSUs are standard Radix resources that can be freely transferred, traded on DEXes, or used as collateral in DeFi protocols — all while the underlying XRD continues earning staking rewards.
How LSUs Work
When a user stakes XRD to a validator, the Validator Component mints LSU tokens and deposits them into the user's account. The exchange rate between LSU and XRD increases over time as emissions rewards accrue. For example, if 1 LSU was initially worth 1 XRD, after a period of emissions it might be worth 1.05 XRD — the protocol auto-compounds rewards by increasing the redemption value.
To unstake, a user returns their LSUs to the Validator Component, which burns them and initiates an unstaking delay of approximately 2,016 epochs (~2 weeks). After the delay, the user receives their proportional share of XRD.
DeFi Composability
Because LSUs are standard resources, they integrate natively with the Radix DeFi ecosystem:
- DEX trading — LSUs can be swapped on Ociswap, CaviarNine, and other DEXes
- Lending collateral — protocols like Weft Finance accept LSUs as collateral
- Liquidity provision — LSU/XRD pools allow liquid staking liquidity
This composability means stakers no longer face a binary choice between earning staking rewards and participating in DeFi.
External Links
- Tokens and Tokenomics — Radix Knowledge Base
- Network Staking Dashboard — Radix Dashboard
- Staking & Validating — Radix Blog
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