Superfluid Staking

Superfluid Staking is a novel approach where, instead of restaking native ETH or ETH Liquid Staked Tokens (LSTs) in EigenLayer, participants stake a token that symbolizes a mixed pool of assets – specifically, Liquidity Position (LP) tokens. These LP tokens represent a share of the total liquidity in a DeFi exchange, such as Uniswap or Curve. This mechanism enhances the utility and yield-generation potential of staked assets, represented via vETH, ensuring participants remain liquid with a yield bearing ETH proxy.

How Vector Reserve Implements Superfluid Staking

In the Vector Reserve ecosystem, Superfluid Staking will be implemented as soon as EigenLayer enables it. It works by restaking the underlying LP positions backing vETH via EigenLayer. This specific staking method allows for the restaking of ETH that is already in an LP. This involves staking an LP token that's part of a pairing with ETH (in the case of Vector Reserve, ETH paired with Liquid Staked Tokens (LST). This then follows a similar yield transfer pattern from DeFi to EigenLayer, further boosting vETH yields.

Benefits of Superfluid Staking

Superfluid Staking is just one overarching part of the vETH yield mix. However, it is a particularly innovative and forward looking approach that offers an increase in yield, setting vETH apart from the competition and creating a strong USP in attracting substantial deposits.

  • Increased Yield Opportunities: By staking LP tokens, Superfluid Staking allows for the simultaneous earning of liquidity pool rewards and staking rewards. This dual earning stream significantly boosts the overall yield potential.

  • Enhanced Liquidity: Unlike traditional staking, which often locks up assets, Superfluid Staking with LP tokens ensures that liquidity is maintained, providing greater flexibility for investors via liquid, yield bearing vETH.

  • First-Mover Advantage: As an early adopter of Superfluid Staking, Vector Reserve offers unique liquid yield opportunity that is not yet widely available in the market, and thus positions the protocol to attract significant deposits hunting for optimized ETH yields.

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