{"id":"liquid-collective","title":"Liquid Collective","content":"**Liquid Collective** is a decentralized [liquid staking](https://iq.wiki/wiki/liquid-staking) protocol that provides staking solutions for institutional and enterprise participants across multiple [blockchain](https://iq.wiki/wiki/blockchain) networks. It establishes a standardized framework for liquid staking and is governed by a broad collective of industry participants.\n\nA key component of the protocol is Liquid Staked ETH (LsETH), a [staking](https://iq.wiki/wiki/staking) token representing staked [Ethereum (ETH)](https://iq.wiki/wiki/ethereum) and accrued network rewards. LsETH enables staking while maintaining liquidity, facilitating broader integration within [decentralized finance (DeFi)](https://iq.wiki/wiki/defi) applications.  [\\[1\\]](#cite-id-0GXXWKpXPC) [\\[2\\]](#cite-id-bji1shRraY) [\\[6\\]](#cite-id-QAoqYuR1yb)\n\n## Overview\n\nLiquid Collective was publicly announced on September 20, 2022, marking the beginning of its development as a standardized liquid stakingprotocol. Shortly thereafter, on October 4, 2022, the LsETH smart contractwas deployed, initiating its staking operations on [Ethereum](https://iq.wiki/wiki/ethereum). Over time, the protocol has expanded its ecosystem by incorporating major custodians, platforms, and nodeoperators.\n\nLiquid Collective was developed aiming to provide a structured and secure [liquid staking](https://iq.wiki/wiki/liquid-staking) solution that meets institutional compliance requirements. Unlike protocols primarily catering to individual [crypto](https://iq.wiki/wiki/cryptocurrency) users, Liquid Collective is designed to accommodate enterprises by aiming to ensure regulatory compliance, security, and operational efficiency. It is supported by a network of industry participants, including custodians, [node](https://iq.wiki/wiki/node) operators, and service providers.\n\nInitially launched on [Ethereum](https://iq.wiki/wiki/ethereum), Liquid Collective follows a multi-chain strategy, with plans for future expansion to other [proof-of-stake (PoS)](https://iq.wiki/wiki/proof-of-stake) networks. Governance is structured in a decentralized manner, involving a range of stakeholders contributing to protocol development and oversight.  [\\[1\\]](#cite-id-0GXXWKpXPC) [\\[2\\]](#cite-id-bji1shRraY) [\\[4\\]](#cite-id-aC34KZNPAA) [\\[6\\]](#cite-id-QAoqYuR1yb)\n\n### Technology\n\nThe protocol is built on a foundation of [smart contracts](https://iq.wiki/wiki/smart-contract) deployed on [Ethereum](https://iq.wiki/wiki/ethereum), automating [staking](https://iq.wiki/wiki/staking), LsETH issuance, and reward distribution while maintaining transparency and security.\n\nStaking security is managed through a network of [validators](https://iq.wiki/wiki/validator), including Figment, [Coinbase](https://iq.wiki/wiki/coinbase) Cloud, and Staked. These entities operate multi-region and multi-client infrastructures, aiming to reduce risks associated with centralization and downtime.\n\nCompliance mechanisms such as [Know Your Customer (KYC)](https://iq.wiki/wiki/know-your-customer-kyc) and [Anti-Money Laundering](https://iq.wiki/wiki/anti-money-laundering-aml) (AML) requirements are integrated into the protocol. These measures are implemented to align with financial regulations and facilitate institutional participation.\n\nSecurity audits, conducted by independent firms including Halborn and Spearbit, assess and mitigate potential vulnerabilities within the protocol’s smart contracts. The adoption of the cToken model ensures that LsETH reflects the value of staked ETH and rewards without periodic rebasing, supporting seamless interaction with [DeFi](https://iq.wiki/wiki/defi) applications.  [\\[4\\]](#cite-id-aC34KZNPAA) [\\[17\\]](#cite-id-6BKsk6OAdk)\n\n## Liquid Staked ETH (LsETH)\n\nLiquid Staked ETH (LsETH) is a [staking](https://iq.wiki/wiki/staking) receipt token issued when [ETH](https://iq.wiki/wiki/ethereum) is staked through Liquid Collective. It serves as verifiable proof of ownership over the staked ETH and accumulated rewards, accounting for network fees and potential penalties.\n\n$$widget0 [YOUTUBE@VID](hbER5Ck4eGs)$$\n\nBy holding LsETH, participants retain liquidity while benefiting from staking rewards, allowing its use in [DeFi](https://iq.wiki/wiki/defi) applications. Rewards are automatically reinvested, increasing the value of LsETH over time.\n\nThe protocol’s [validator](https://iq.wiki/wiki/validator) network is selected based on operational security standards, with additional protection provided through a slashing coverage program developed in collaboration with [Nexus Mutual](https://iq.wiki/wiki/nexus-mutual). The compliance framework ensures that staking activities are conducted within regulatory guidelines, making the protocol accessible to institutional entities.\n\nLiquid Collective's revenue model is built upon a Protocol Service Fee, which is set at 10% of network rewards. This fee structure ensures operational sustainability and is distributed among multiple ecosystem participants:\n\n* **Node Operators** receive compensation for securing the network.- **Platforms** facilitating staking earn a share of rewards.- **Custody Providers and Wallet Services** receive a portion of the service fees for managing assets securely.- **The Liquid Collective DAO**, composed of a dispersed community of protocol participants, manages governance-related funding.\n  Unlike staking solutions with variable or unstated fee structures, Liquid Collective's model is transparently structured to support institutional participants while maintaining a predictable return for stakers.  [\\[1\\]](#cite-id-0GXXWKpXPC) [\\[4\\]](#cite-id-aC34KZNPAA) [\\[8\\]](#cite-id-6jd8wGke0u) [\\[11\\]](#cite-id-8GI5OUJspJ) [\\[13\\]](#cite-id-01ZFdL0TIh) [\\[15\\]](#cite-id-YihBos63ZT) [\\[18\\]](#cite-id-EGqE04jiDp)\n\n#### DeFi Ecosystem\n\nBeyond its core [staking](https://iq.wiki/wiki/staking) mechanism, Liquid Collective actively integrates with [decentralized finance (DeFi)](https://iq.wiki/wiki/defi) applications to extend the utility of LsETH. Several DeFi platforms, including [LBank](https://iq.wiki/wiki/lbank), [DefiLlama](https://iq.wiki/wiki/defillama), iYield, and [EigenLayer](https://iq.wiki/wiki/eigenlayer), have incorporated LsETH within their [liquidity pools](https://iq.wiki/wiki/liquidity-pool), lending protocols, and financial tracking tools. These integrations allow LsETH holders to engage with decentralized financial services without unstaking their assets.\n\nStrategic partnerships have been formed with protocols offering liquid restaking services, such as **I**nception and EigenPie, broadening the asset’s usability within Ethereum’s broader staking ecosystem. This integration enables holders of LsETH to participate in additional staking layers while retaining access to capital-efficient liquidity solutions.  [\\[10\\]](#cite-id-wXfbGrXvB3)\n\n## Governance\n\nLiquid Collective follows a decentralized governance model, with decision-making distributed among stakeholders, including [validators](https://iq.wiki/wiki/validator), custodians, and service providers. Governance is coordinated by The Liquid Foundation, Alluvial, and other industry participants.\n\nThe governance framework includes mechanisms for evaluating validator performance, implementing security upgrades, and expanding protocol capabilities. Decisions related to protocol development and operational security are determined through collective input.\n\n#### Ecosystem Participants\n\nThe Liquid Collective ecosystem includes multiple industry partners contributing to its governance, security, and operational framework:\n\n* [Staking](https://iq.wiki/wiki/staking) services are integrated with platforms such as [Coinbase](https://iq.wiki/wiki/coinbase), Figment, Bitcoin Suisse, Hashnote, Twinstake, Anchorage Digital, [Alloy](https://iq.wiki/wiki/alloy), and Staking Rewards. These platforms facilitate access to Liquid Collective’s staking infrastructure.- Validator operations are managed by Figment, Coinbase Cloud, Staked, and Blockdaemon, supporting the network’s security and performance.\n* Custodians, including Anchorage Digital, Bitcoin Suisse, BitGo, Coinbase, Copper, and Fireblocks, provide institutional-grade security for staked assets.\n* Governance and research partners, such as The Liquid Foundation, Alluvial, Reverie, Exiger, and Nexus Mutual, contribute to protocol development and risk management initiatives.\n\nSecurity measures include [smart contract](https://iq.wiki/wiki/smart-contract) audits performed by Halborn and Spearbit, aiming to ensure that vulnerabilities are identified and addressed before deployment. The protocol follows a non-custodial model, with ETH deposits managed directly by Ethereum’s staking contract, reducing third-party risks.\n\n[Validators](https://iq.wiki/wiki/validator) operate using multi-region and multi-client infrastructures to minimize downtime and mitigate security risks. Compliance with KYC/AML regulations distinguishes Liquid Collective from other liquid staking protocols by ensuring adherence to regulatory standards.\n\nNetwork monitoring mechanisms are in place to detect and respond to potential security incidents, with automated responses implemented to mitigate risks.  [\\[2\\]](#cite-id-bji1shRraY) [\\[3\\]](#cite-id-FMxWK6qWCL) [\\[5\\]](#cite-id-eobGOHTgdv) [\\[7\\]](#cite-id-UJhVJ4xRes) [\\[12\\]](#cite-id-kr0rGkMPGo) [\\[14\\]](#cite-id-xxZFxzhYZy) [\\[16\\]](#cite-id-vLcoYdokgH)\n\n## Future Developments\n\nLiquid Collective continues to expand its network and capabilities. While its initial deployment focused on [Ethereum](https://iq.wiki/wiki/ethereum) staking, the protocol has outlined plans to support other [proof-of-stake (PoS)](https://iq.wiki/wiki/proof-of-stake) [blockchains](https://iq.wiki/wiki/blockchain).  The Liquid Foundation and governance advisors are actively working to introduce an expanded governance framework that includes greater community participation and decentralized decision-making.\n\nLiquid Collective has established itself as a [liquid staking](https://iq.wiki/wiki/liquid-staking) protocol tailored for institutional and enterprise participants.  [\\[2\\]](#cite-id-bji1shRraY) [\\[3\\]](#cite-id-FMxWK6qWCL) [\\[9\\]](#cite-id-6v4BQAr3hu) [\\[12\\]](#cite-id-kr0rGkMPGo)","summary":"Liquid Collective is a decentralized liquid staking protocol for institutional participants, offering compliant and secure staking solutions across multiple blo...","images":[{"id":"QmUDMRLdogxwGa7WDv5Hbn42UySsM8Ycv9ZaU3yw1VkVAp","type":"image/jpeg, 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Liquid Collective\",\"id\":\"0GXXWKpXPC\",\"timestamp\":1738719806574},{\"url\":\"https://liquidcollective.io/about/\",\"description\":\"Ecosystem: Liquid Collective\",\"id\":\"bji1shRraY\",\"timestamp\":1738722106030},{\"url\":\"https://alluvial.finance/liquid-collective-kraken/\",\"description\":\"Alluvial Reveals Liquid Collective as Kraken Joins the First Enterprise-Grade Multi-Chain Liquid Staking Protocol\\n\",\"id\":\"FMxWK6qWCL\",\"timestamp\":1738722146980},{\"url\":\"https://liquidcollective.io/faq/\",\"description\":\"What is liquid staking?\\n\",\"id\":\"aC34KZNPAA\",\"timestamp\":1738722167244},{\"url\":\"https://liquidcollective.io/community/\",\"description\":\"Community\\n\",\"id\":\"eobGOHTgdv\",\"timestamp\":1738722198796},{\"url\":\"https://docs.liquidcollective.io/v1\",\"description\":\"What is Liquid Collective?\\n\",\"id\":\"QAoqYuR1yb\",\"timestamp\":1738722216875},{\"url\":\"https://liquidcollective.io/diligence/\",\"description\":\"Diligence\",\"id\":\"UJhVJ4xRes\",\"timestamp\":1738722246693},{\"url\":\"https://liquidcollective.io/litepaper/\",\"description\":\"Liquid Collective Litepaper\\n\",\"id\":\"6jd8wGke0u\",\"timestamp\":1738722268779},{\"url\":\"https://liquidcollective.io/news/\",\"description\":\"Liquid Collective News\",\"id\":\"6v4BQAr3hu\",\"timestamp\":1738722294559},{\"url\":\"https://docs.liquidcollective.io/eth\",\"description\":\"ETH Liquid Staking Documentation\\n\",\"id\":\"wXfbGrXvB3\",\"timestamp\":1738722321481},{\"url\":\"https://liquidcollective.io/stakers/\",\"description\":\"Stakers\",\"id\":\"8GI5OUJspJ\",\"timestamp\":1738722341260},{\"url\":\"https://liquidcollective.io/2024-year-in-review/\",\"description\":\"Liquid Collective: 2024 year in review\\n\",\"id\":\"kr0rGkMPGo\",\"timestamp\":1738722357772},{\"url\":\"https://www.youtube.com/watch?v=hbER5Ck4eGs\",\"description\":\"Liquid Collective • What's LsETH?\\n\",\"id\":\"01ZFdL0TIh\",\"timestamp\":1738722446315},{\"url\":\"https://bitcoinsuisse.com/staking/liquid-staking\",\"description\":\"Staking Liquid Staked ETH (LsETH)\\n\\n\",\"id\":\"xxZFxzhYZy\",\"timestamp\":1738722546492},{\"url\":\"https://blog.bitgo.com/regulated-custody-for-liquid-staked-ethereum-lseth-63f1e221a60e\",\"description\":\"What is LsETH?\\n\\n\",\"id\":\"YihBos63ZT\",\"timestamp\":1738722575212},{\"url\":\"https://app.blockworksresearch.com/unlocked/liquid-collective-lseth\",\"description\":\"Liquid Collective’s LsETH\\n\",\"id\":\"vLcoYdokgH\",\"timestamp\":1738722599726},{\"url\":\"https://news.bitcoin.com/institutions-gain-access-to-ether-liquid-staking-via-anchorage-digital/\",\"description\":\"Institutions Gain Access to Ether Liquid Staking via Anchorage Digital\\n\",\"id\":\"6BKsk6OAdk\",\"timestamp\":1738722620794},{\"url\":\"https://www.thebigwhale.io/tokens/liquid-staked-eth\",\"description\":\"How is Liquid Staked ETH used?\\n\",\"id\":\"EGqE04jiDp\",\"timestamp\":1738722643912}]"},{"id":"previous_cid","value":"\"https://ipfs.everipedia.org/ipfs/QmU4e5u7Z9CQS6zLeipYnQ23cWc9SxdyDDPqasSKEZ8fZp\""},{"id":"commit-message","value":"\"Refine article structure: Adjust heading levels, fix lists, and add founding event & Ethereum blockchain.\""},{"id":"previous_cid","value":"QmU4e5u7Z9CQS6zLeipYnQ23cWc9SxdyDDPqasSKEZ8fZp"}],"events":[{"id":"e7da6938-e238-40b1-a1a5-bd12939fa315","date":"2022-09","title":"Founded","type":"CREATED","description":"Liquid Collective was founded."}],"user":{"id":"0x8af7a19a26d8fbc48defb35aefb15ec8c407f889"},"author":{"id":"0xd5893989b9952c6568a99F854795AcC5Ae480D56"},"language":"en","version":1,"linkedWikis":{"blockchains":["ethereum"],"founders":["matt-leisinger","mara-schmiedt"],"speakers":[]}}