CoinDCX launches Ethereum-backed Liqueth token to support staking

Neblio Technologies-run cryptocurrency exchange CoinDCX has announced the launch of Liqueth (LQTH), an ERC-20 token aimed at propelling staking activities on Ethereum 2.0 blockchain.

The company said on Monday that one LQTH will be generated and transferred as a tokenized asset for every ETH staked through CoinDCX. It had introduced staking a few months ago and has already seen almost a million-dollar worth of ETH staked.

In industry parlance, ETH staking implies depositing and holding 32 ETH for at least two years. The action converts ETH to ETH2 and activates a validator software which gives stakers the responsibility of storing data, processing transactions, and adding new blocks to the blockchain. The entire process, known as proof-of-stake (PoS), keeps ETH secure for all users, while earning the validator rewards in the process.

“The current deposit contract for ETH 2.0 works only one way—users can only deposit ETH but will not be able to withdraw it until ETH 2.0 is completely launched, which might take a few years. At CoinDCX, we aim to lower the barriers to staking by providing a highly liquid, smart-contract-driven solution,” Neeraj Khandelwal, co-founder of CoinDCX, said while commenting about Liqueth.

According to CoinDCX, the new bond-backed token, based on a PoS reserve protocol, will only be minted once the ETH locked in the exchange is sent for validator creation. The platform will cover all validator operating expenses and 100% of the on-chain staking rewards will be distributed to users in the form of ETH. 

“Since the announcement of ETH 2.0, while many aspire to participate in staking, only few hold the minimum required 32 ETH or possess adequate knowledge for setting up the system. Liqueth is designed to propel CoinDCX’s community’s contributions towards the ETH 2.0 upgrade in return for the myriad of benefits that holders and users of LQTH will receive in the future,” he added. 

The exchange also said it plans to open a market to trade LQTH tokens, allowing stakers to liquidate their holdings at any time.