How Does Valantis Labs Improve Liquid Staking Profit?

Liquid staking was created to solve a simple problem. Users wanted to earn staking yield without locking capital or giving up liquidity.

In practice, many liquid staking strategies underperform. The issue is not staking rewards themselves, but how liquid staking tokens are handled once they reach decentralized exchanges.

Valantis Labs approaches liquid staking profit from a different angle. Instead of optimizing staking alone, it redesigns liquidity itself to match how liquid staking tokens actually behave.

Key Takeaways

• Valantis Labs focuses on liquidity design rather than staking efficiency
• Liquid staking profit often leaks due to generic DEX mechanics
• stHYPE pools are designed specifically for redemption aware assets
• Embedded liquidity directs value to LPs and traders
• The approach improves yield sustainability and exit efficiency

Understanding the Liquid Staking Profit Problem

One Size Fits All DEX Design

Most decentralized exchanges use generalized pool designs.

• All assets are treated the same
• Redemption mechanics are ignored
• Withdrawal delays are not priced in

This design works for volatile spot assets but fails for redeemable tokens such as liquid staking assets.

Why Liquid Staking Tokens Underperform

Liquid staking tokens represent a claim on an underlying asset that can be redeemed after a delay.

When placed in generic AMMs:

• Prices can drift below redemption value
• Liquidity providers absorb structural impermanent loss
• Traders exploit discount periods during exits

This causes value leakage that reduces overall liquid staking profit.

Read Also: What is Liquid Staking Token (LST)? Bitrue Guide

What Is Valantis Labs

Valantis Labs is a DeFi infrastructure project focused on building liquidity systems tailored to the assets they serve.

Rather than creating another monolithic DEX, Valantis builds a modular framework that allows liquidity pools to be designed around asset specific behavior.

Its primary focus today is liquid staking tokens.

The Valantis Approach to Liquid Staking Profit

LST Native Liquidity Design

Valantis treats liquid staking tokens as a unique asset class.

• Redemption value is explicitly considered
• Withdrawal behavior is embedded into pool logic
• Liquidity rebalancing aligns with staking mechanics

This ensures pricing remains anchored to intrinsic value rather than short term flow imbalances.

Embedded Liquidity Concept

Valantis introduces the idea of embedded liquidity.

Liquidity is no longer a generic layer sitting above assets. Instead, it becomes part of the asset’s onchain infrastructure.

This allows value to flow directly to participants instead of leaking through inefficient market structures.

stHYPE and the STEX Model

What Is stHYPE

stHYPE is the liquid staking token for HYPE.

It represents staked HYPE while remaining liquid and redeemable.

• Accrues staking yield
• Can be used across DeFi
• Redeemable following protocol rules

stHYPE was the first liquid staking token on Hyperliquid.

STEX Pools Explained

The Stake Exchange, or STEX, is Valantis’ first production liquidity solution.

• Custom built specifically for stHYPE
• Designed to handle redeemable assets
• Reduces discount selling during exits

Instead of forcing stHYPE into generic curves, STEX pools align liquidity with how stHYPE redeems.

How Valantis Improves LP Profitability

Eliminating Structural Impermanent Loss

Generic AMMs expose LPs to loss unrelated to market volatility.

Valantis pools aim to eliminate this structural loss by aligning pool mechanics with asset design.

Directing Value to LPs

By fixing liquidity design flaws:

• Fees accrue more efficiently
• Yield remains sustainable
• LP capital is used more productively

This improves risk adjusted returns for liquidity providers.

Better Exit Behavior

Valantis pools are designed to handle one sided flows gracefully.

• Reduced panic selling
• Improved price stability
• Lower slippage during withdrawals

This protects both LPs and traders.

Benefits for Traders

Traders also benefit from Valantis’ approach.

• Tighter spreads around redemption value
• More predictable pricing
• Deeper liquidity for LST pairs

Efficient liquidity improves execution quality across the ecosystem.

Read Also: SEC Clarifies Liquid Staking Tokens May Not Be Securities

Composability and DeFi Strategies

Valantis leverages DeFi’s core strength, composability.

• stHYPE can be used across integrated protocols
• Liquidity remains efficient as strategies stack
• Yield sources compound rather than conflict

This allows liquid staking profit to scale with ecosystem growth.

Why Valantis Focuses on Design Space

Valantis views liquidity as a design space, not a fixed product.

Each asset has:

• Unique yield sources
• Distinct order flow patterns
• Specific redemption logic

The Sovereign Pool framework allows custom liquidity solutions to be built quickly and securely for each case.

Long Term Impact on Liquid Staking

Valantis reframes liquid staking profit as a systems problem.

By embedding liquidity directly into asset design, it creates:

• More resilient staking ecosystems
• Higher capital efficiency
• Sustainable long term yield

This model may define the next generation of liquid staking infrastructure.

Final Thoughts

Valantis Labs improves liquid staking profit by fixing the part of DeFi most protocols overlook. Liquidity design.

Instead of extracting yield through emissions or incentives, Valantis aligns pool mechanics with how liquid staking tokens truly work.

Through stHYPE and STEX pools on Hyperliquid, Valantis demonstrates how better design can unlock higher, more sustainable returns for both LPs and traders.

As liquid staking continues to expand, asset specific liquidity may become the standard rather than the exception.

Read Also: HYPE Price Prediction: Should You Buy While Price is Low?

FAQs

How does Valantis Labs improve liquid staking profit

Valantis improves profit by designing liquidity pools that align with liquid staking redemption and withdrawal behavior, reducing value leakage.

What makes stHYPE different from other LSTs

stHYPE is supported by LST native liquidity pools that anchor pricing to redemption value rather than generic AMM curves.

What is embedded liquidity

Embedded liquidity means liquidity is designed as part of the asset’s onchain infrastructure instead of a generic external layer.

Who benefits from Valantis pools

Liquidity providers gain better risk adjusted returns, while traders benefit from tighter spreads and improved price stability.

Is Valantis only focused on liquid staking

Liquid staking is the first focus, but the framework can support other asset types such as stablecoins and vault based assets.