TenderSwap: Unified Liquidity for Staked Assets

Tenderize Team
by Tenderize Team

Apr 30, 2024 2 min read

TenderSwap: Unified Liquidity for Staked Assets

The evolving landscape of liquid staking is about to take another leap forward with the introduction of TenderSwap, a new liquidity solution specifically designed for staked assets, LSTs and LRTs.

TenderSwap is meant to unify the currently fragmented liquidity landscape for staked assets and aims to be the go-to liquidity source for them. Stakers can easily swap any of their staked assets for the unstaked token in return for a small fee. Liquidity providers can earn trading fees from a wide array of staked assets providing just the unstaked asset, creating an attractive opportunity with high network effects.

TenderSwap has already been rolled out for Tenderize’s liquid staking layer, creating a unified liquidity ecosystem for Polygon, The Graph and Livepeer stakers. But we’re not stopping there. The TenderSwap model can just as easily be applied to any set of staked assets, like any LST/LRT on Ethereum or staked assets to any validator on Solana, with their enshrined liquid staking.

How it works

TenderSwap is designed specifically for staked assets. It doesn’t act like a traditional decentralised exchange, where usually a price is determined based on ratio of tokens in a liquidity pool. Instead, TenderSwap only requires liquidity in the form of the unstaked token, and acts more like a clearinghouse for staked assets.

Stakers can exchange their staked positions back for the unstaked token, without sitting through the unstaking period. TenderSwap will unstake the received staked assets, liquidity flows back into TenderSwap when the unstaking period ends. In return, the staker pays a small fee depending on the increase of utilized liquidity*.
*For a more detailed explanation check the white paper and yellow paper.

Liquidity providers can easily provide liquidity with just the unstaked token to earn fees from multiple staked assets being exchanged. This marks a major capital efficiency improvement over providing liquidity for LSTs in different pairs, like on Uniswap.

The Road Ahead

TenderSwap stands as a testament to Tenderize's commitment to innovation and ecosystem expansion. By addressing the nuanced demands of the staking domain, TenderSwap is set to redefine liquidity norms, presenting a scalable, efficient, and user-centric platform that complements the foundational ethos of Tenderize. As we embrace this new chapter, the potential for TenderSwap to catalyze growth and integration within the wider Web3 and decentralized finance landscape is immense, heralding a new era of liquidity optimization and financial inclusivity.


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© Tenderize Labs Ltd. 2024