What Is Liquid Staking? JewelSwap's Guide Across Sui, MultiversX and Radix

Staking is the engine that secures proof-of-stake blockchains, but classic staking comes with a catch: the moment you lock your tokens to earn rewards, they stop being useful for anything else. Your capital is productive and frozen at the same time. Liquid staking solves that trade-off, and it is the foundation of how JewelSwap works across Sui, MultiversX and Radix.

This guide explains what liquid staking is, how JewelSwap's dual-token model turns idle tokens into a liquid, yield-bearing position, and how the protocol layers in Protocol-Owned Liquidity, daily rewards, Gauge governance and a transferable unbonding NFT. By the end you should understand exactly what happens to a token from the moment you deposit it to the moment you redeem it.

What is liquid staking?

In a proof-of-stake network, validators put tokens at stake to earn the right to produce blocks, and they share the resulting rewards with the people who delegate to them. Native staking works, but it locks your tokens: on Ethereum, for example, you need 32 ETH to run a validator and your stake sits behind an exit queue, as the official Ethereum staking guide describes. On Sui, staked SUI is wrapped in a self-custodial stake object that accrues rewards epoch by epoch, per the Sui documentation.

Liquid staking adds a layer on top. When you deposit your token with a liquid staking protocol, you receive a liquid staking token (LST) in return — a freely transferable receipt that represents your underlying stake plus its accruing rewards. You keep earning validator rewards, but you also hold a token you can trade, lend, or use as collateral elsewhere in DeFi. The same capital does two jobs at once.

That is the core idea. JewelSwap's implementation takes it further with a two-token design and a liquidity mechanism that keeps its tokens deeply tradable without diluting the rewards stakers earn.

JewelSwap's dual-token model

JewelSwap uses two tokens per chain, and understanding the split is the key to understanding everything else. On each network there is a base liquid staking token and a staked, yield-bearing variant:

Sui: JWLSUI (base) and SJWLSUI (staked)
MultiversX: JWLEGLD (base) and SJWLEGLD (staked)
Radix: JWLXRD (base) and SJWLXRD (staked)

The base token — JWLSUI, JWLEGLD or JWLXRD — is a 1:1 claim on the underlying asset. One JWLSUI is always redeemable for one SUI; one JWLXRD for one XRD. It does not accrue rewards on its own. Think of it as the liquid, spendable form of your deposit: you can hold it, trade it on a DEX, or pair it in a liquidity pool.

The staked variant — SJWLSUI, SJWLEGLD or SJWLXRD — is what you get when you stake the base token inside JewelSwap. This is the yield-bearing token. It does not increase in quantity; instead it appreciates in value against the base token as validator rewards flow in. Over time, each SJWLSUI is worth progressively more JWLSUI. This reward-bearing design is explained in more depth in our overview of JewelSwap derivative tokens, and the Sui-specific mechanics are covered in our guide to JWLSUI dual-token liquid staking on Sui.

Splitting the roles this way is deliberate. The base token stays pegged and liquid so it works well in trading and lending markets, while the staked variant quietly compounds your yield. You choose which one you want to hold depending on whether your priority is liquidity or accumulation.

The 1.1x mint and Protocol-Owned Liquidity

Here is where JewelSwap does something unusual. When you deposit the underlying asset, the protocol can mint more base tokens than you deposited — for example 1.1 JWLSUI for every 1 SUI, or 1.1 JWLXRD for every 1 XRD. At first glance that sounds like it breaks the 1:1 backing. It does not, and the mechanism that makes it safe is Protocol-Owned Liquidity (POL).

The extra minted tokens never enter circulation as unbacked supply. Instead, each extra derivative token is paired with an equal amount of the deposited underlying asset and placed directly into the protocol's own AMM liquidity pool — liquidity the protocol owns and does not withdraw. The remaining underlying tokens are staked with validators to generate rewards for users.

The subtle but important principle is that the tokens are backed at the point of the swap. The extra JWLSUI only ever leaves the protocol's pool when someone swaps real SUI in to buy it, so backing is restored the instant the token reaches an external holder. If redemptions ever exceed the available underlying, the protocol withdraws its own AMM liquidity and burns the excess derivative tokens to keep the ratio at exactly 1:1.

The payoff is deep, permanent, protocol-owned liquidity for the JWL tokens. That means tighter pegs, lower slippage for traders, and a better experience for everyone — all without skimming rewards away from stakers. The POL model ties token creation directly to liquidity provision rather than to unbacked issuance.

Daily rewards and how value accrues

Once your deposit is staked, the underlying asset is delegated across multiple validators on the respective network. The validator rewards those delegations earn are collected and distributed daily, and each distribution nudges the SJWL-to-JWL exchange ratio upward.

Concretely, the bulk of validator rewards flows to holders of the staked variant — on Radix, for instance, 90% of rewards accrue to SJWLXRD holders while JewelSwap retains 10% as protocol fee. Because rewards raise the exchange rate rather than minting new tokens, your SJWL balance stays constant while each unit becomes redeemable for more of the base token every day. It is auto-compounding by construction: you never have to claim or restake anything.

And because the staked variant is a normal transferable token, you can move your accrued yield to another wallet, sell it, or deploy it as collateral — the yield ownership travels with the token.

Gauge governance

Where your staked tokens get delegated is not decided unilaterally by the team. JewelSwap runs a Gauge system in which holders of the staked variant vote on how validator delegation is allocated across the validator set. More votes toward a given validator direct more of the protocol's stake there.

This keeps delegation decentralized and aligned with the people who actually bear the staking risk, and it lets the community steer the protocol toward reliable, well-performing validators. We break down exactly how voting weight and delegation work in our deep dive on the Gauge governing validator delegation.

Unbonding and the transferable claim NFT

Unwinding a position happens in two steps, and only one of them takes time.

First, converting your staked variant back to the base token — SJWLSUI to JWLSUI, say — is instant and fee-free. You simply unstake at the current exchange rate and receive the corresponding amount of base tokens immediately.

Second, redeeming the base token for the actual underlying asset triggers the network's unbonding period of 10 days, because the validators need time to release the stake. Rather than freeze your position during that window, JewelSwap issues you a transferable claim NFT — a SUI, EGLD or XRD claim NFT depending on the chain — that represents your pending redemption. When the 10 days elapse, you burn the NFT to collect your underlying tokens at the 1:1 rate.

Because the claim NFT is transferable between wallets, your unbonding position is not dead weight. You can send it or sell it to someone who wants the underlying without waiting out the full period. Note that while redemption is currently fee-free, the protocol reserves the option to apply dynamic fees during periods of unusually high redemption demand.

Instant liquidity on DEXs

If you do not want to wait 10 days at all, you usually do not have to. Because the base tokens trade on-chain, you can swap JWLSUI straight for SUI on Cetus, the leading DEX on Sui, or swap JWLXRD for XRD on Ociswap on Radix — at the market rate, instantly. The Protocol-Owned Liquidity described earlier is what keeps those pools deep and the peg tight, so exit slippage stays low even for sizable trades.

Providing liquidity to those pools is itself a second way to earn. As covered in our walkthrough of JewelSwap on Sui, you can stake JWLSUI for SJWLSUI yield, or LP the JWLSUI–SUI pair on Cetus for trading fees — a two-way mechanism designed to stack returns beyond plain staking.

A worked example

Suppose you hold 100 SUI and want to put it to work.

You deposit 100 SUI into JewelSwap. Thanks to the 1.1x POL mint, the protocol issues 110 JWLSUI: the extra 10 JWLSUI are paired with 10 SUI and locked into the protocol's Cetus liquidity, while your usable position is a full 1:1 claim on your 100 SUI. You stake your JWLSUI and receive SJWLSUI at the current exchange rate — let us say the rate is 1.00, so you get roughly 100 SJWLSUI.

Over the next several months, daily validator rewards push the exchange rate up. Say it climbs from 1.00 to 1.05. Your 100 SJWLSUI is now redeemable for about 105 JWLSUI — a 5% gain earned passively, with no claiming or restaking on your part.

When you want out, you unstake instantly and fee-free, receiving ~105 JWLSUI. To get SUI back, you have two choices: swap that JWLSUI for SUI on Cetus immediately at the market rate, or redeem it directly for 105 SUI and receive a claim NFT you burn after 10 days. Either way, your original 100 SUI came back with its rewards attached.

Benefits and risks

The benefits are straightforward: your staked capital stays liquid and composable, rewards auto-compound daily through a rising exchange rate, Protocol-Owned Liquidity gives you deep exit liquidity and a tight peg, Gauge voting hands delegation control to token holders, and the transferable claim NFT means even your unbonding position has a market.

The risks are real and worth naming. Smart-contract risk applies to any DeFi protocol. Validator performance and slashing can affect rewards. The base token's market price on a DEX can briefly deviate from its 1:1 backing during volatile periods, even though redemption remains 1:1. And redemption fees, while currently absent, could be applied dynamically during heavy redemption demand. Liquid staking removes the liquidity trade-off — it does not remove market and technical risk.

Chain-by-chain notes

JewelSwap runs the same architecture on three networks, with local details that follow each chain's conventions. On Sui, JWLSUI and SJWLSUI anchor the flagship deployment, with Cetus providing the primary DEX liquidity for instant swaps. On MultiversX, JWLEGLD and SJWLEGLD bring liquid staking to EGLD; JewelSwap runs two staking models there to suit different market needs, as outlined in the MultiversX staking introduction. On Radix, JWLXRD and SJWLXRD deliver the same 1.1x POL mint, 90/10 reward split and 10-day unbonding, with Ociswap serving as the on-chain liquidity venue. The full JWLSUI specification lives in the JWLSUI liquid staking docs if you want to go deeper.

Frequently asked questions

Is JWLSUI always redeemable 1:1 for SUI?

Yes. The base token is a 1:1 claim on the underlying asset. Despite the 1.1x mint, Protocol-Owned Liquidity ensures every circulating token is backed at the point of the swap, and the protocol burns excess supply from its own liquidity if needed to hold the ratio.

How do I actually earn yield?

By holding the staked variant (SJWLSUI, SJWLEGLD or SJWLXRD). Its exchange rate against the base token rises daily as validator rewards are distributed, so each unit becomes worth more over time without your balance changing.

Do I have to wait 10 days to exit?

Only if you redeem the base token directly for the underlying asset. Converting the staked variant to the base token is instant, and you can swap the base token for the underlying on a DEX like Cetus at any time — no waiting required.

What is the claim NFT for?

It represents your pending redemption during the 10-day unbonding window. It is transferable, so you can sell or send your in-progress redemption; burn it after 10 days to collect your underlying tokens.

Which chains does JewelSwap support?

Three: Sui, MultiversX and Radix. Each has its own base and staked token pair, but they share the same dual-token, POL-backed liquid staking design. Put your idle tokens to work while keeping them liquid, and let the daily rewards compound on their own. 🙏