> For the complete documentation index, see [llms.txt](https://docs.valantis.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.valantis.xyz/stakedhype.md).

# stHYPE

<figure><img src="/files/IXgANwf3hCydzgWO58Oq" alt=""><figcaption></figcaption></figure>

{% hint style="info" %}
Documentation is still a work in progress. Some sections may be incomplete or subject to change as Hyperliquid release final details.
{% endhint %}

## Liquid Staking

### Problem

Typically, on Proof-of-Stake networks, the network is secured by a group of validators that are in turn secured by economic security. In return for locking these tokens, the stakers receive rewards in proportion to how many tokens they have staked. To maintain economic security, there is usually an unbonding period when trying to unstake tokens. As a result of this structure, traditional stakers have zero access to liquidity or the general DeFi ecosystem. In addition to the systematic problems, traditional staking UX is cumbersome—researching operators, distributing stake, and interacting with multiple systems is a painful process.

### Solution

Liquid staking solves the typical exclusivity of staking, allowing users to earn rewards without sacrificing access to liquidity or usage across DeFi. In addition to these obvious benefits, liquid staking helps users by:

* Making unstaking faster than the 7 day protocol constraints via instant unstakes via a protocol buffer, faster settlement by netting against incoming mints, and instant withdrawals for a fee via secondary market liquidity like STEX
* Freeing up liquidity by allowing users to borrow USD against their LSTs on Lending Markets.
* Leveraged yield by allowing users to increase their exposure to staking rewards from borrowing and looping HYPE against their LST position.
* Increasing allocation to validators via community codes.

### Network Effects & Network Benefits

Something extremely overlooked about LSTs is their network effects and benefits on the greater DeFi ecosystem. A great case study is stETH on Ethereum, where $7b of stETH is used as collateral across the ecosystem, more than all stablecoin collateral combined.

From the network perspective, LSTs:

* Unlock the most significant source of sustainable retail yield
* Have an elite and reputable validator set securing the network
* Increase the total amount of funds securing the network
* Make DeFi amazing