Recently, the well-known meme coin FUD announced the launch of a new liquidity staking token called fudSUI, which has sparked discussions due to its unique name. However, what may be more noteworthy is that meme coins, which are essentially defined as “nothing,” are starting to engage in serious activities. FUD has taken the first step, although it remains uncertain whether this will create a trend. Perhaps in the future, we may also see meme liquidity staking tokens such as dogeETH and bomeSOL.
SpringSui is positioned as a new standard for liquidity staking tokens.
The DeFi protocol Solend on Solana has established the Suilend DeFi protocol on Sui, which includes features such as lending, cross-chain functionality, and trading. They have also introduced a liquidity staking token called SpringSui (sSui). The term “liquidity staking token standard” is perhaps a more comprehensive description of SpringSui, as mentioned in the technical documentation, highlighting the technical differences of this token standard compared to its competitors.
The logic behind liquidity staking is quite easy to understand. Essentially, it involves entrusting tokens to the protocol and staking them on the main network. Ethereum and Sui, among other PoS blockchains, typically follow this approach. The sources of revenue include token rewards from the main network itself, as well as tokens provided by the protocol (whether these tokens have value or not depends on the token empowerment of the protocol).
FUD is a meme coin that existed prior to the recent meme frenzy on Sui. They recently announced the launch of a liquidity staking token called fudSUI, claiming it to be the first meme liquidity staking token. Currently, users can stake Sui on the SpringSui page of Suilend to obtain fudSUI. However, in reality, fudSUI is simply using the token standard of SpringSui and does not develop its own protocol.
Is immediate unstaking the best solution for detaching token value?
The biggest fear for liquidity staking tokens is the detachment of token value from the staked tokens. SpringSui’s solution to this is real-time unstaking, known as SIP-33, to activate liquidity. But can other liquidity staking protocols achieve immediate unstaking? In fact, this is not a completely new concept, as LST tokens (such as mSOL) on Solana already have similar functionality.
However, SpringSui claims that its token standard can address the liquidity issue, meaning that regardless of the circulating supply of sSUI, users can immediately convert their tokens back to the underlying Sui.
SpringSui defaults to immediate unstaking, differentiating itself from its competitors.
In comparison to its competitors, let’s consider the liquidity staking mechanisms of Haedal and Aftermath. Haedal allows unstaking through two methods: exchanging haSui tokens for Sui within the protocol, which may incur fees and slippage issues, or following the regular unstaking process, which takes time and usually depends on the main network’s Epoch (typically once every 24 hours).
Aftermath’s mechanism is slightly different in wording but is generally similar to Haedal. afSui holders can choose between immediate unstaking and waiting for the Epoch to end. However, the official team also provides the best trading routes found through aggregators (after all, aggregators are Aftermath’s expertise), meaning that users can directly exchange afSui for Sui.
For immediate unstaking, afSui holders need to pay a fee of 0.91%. In contrast, unstaking after the Epoch ends incurs a fee of only 0.21%. The biggest difference with SpringSui compared to the aforementioned competitors is that it defaults to immediate unstaking, which poses a greater challenge for the protocol’s liquidity.
The ceiling of memes: Is fudSUI a form of ironic art?
However, when dissecting the logic behind fudSUI, despite being touted as the first meme liquidity staking token, it essentially only uses the token standard of SpringSui and adds FUD tokens as additional annual rewards. The name of the fudSUI token may be a bit unlucky or mischievous for believers, but looking at it from a different perspective, it can be seen as a form of ironic criticism of the industry’s behavior of inflating annual rewards with valueless tokens.