Silo Staking Intro

Silo is a next-generation liquid staking protocol built on Sei

Silo Protocol is the first pure liquid staking platform that empowers users to optimize and unlock their staked Sei for use across the entire Sei ecosystem.

Liquid Staking

Liquid staking is a technical solution that grants users the best of both worlds. First- the opportunity to directly participate in the "proof of stake" security of the blockchain and earn rewards for the service. Secondly, the ability to receive a token receipt showing the ownership of their staked tokens ("a liquid staking token") that can then be stored, transferred, used in defi, or traded.

Liquid staking lets users make the choice of unbonding their tokens and waiting 21 days for their delivery (only pay gas fees) or trade from the liquid staked token to the underlying token for a small premium.

Why is Liquid Staking important?

The most important aspect of a blockchain is its decentralized consensus mechanism that secures the network. In Bitcoin, there's "mining". In proof of stake networks, there's "staking".

Without liquid staking, network participants have to make a choice:

1. Lock up your funds but secure the network and get paid rewards for participating in network security

2. Keep instant access to your funds for trading / defi but miss out on securing the network and earning staking rewards

Liquid staking aligns the incentives of the users and the network. Now, you can put your funds to work to secure the network and earn staking rewards for It, but without the opportunity cost of locking up your funds.

Liquid staking keeps proof of stake blockchains safe- and is now securing the Sei Network.