Canonical LST: A Protocol-Native Liquid Staking Solution for Tezos

Tezos has unveiled Canonical LST (sTEZ), a protocol-native liquid staking solution that enshrines the mechanism directly into the blockchain’s core. Proposed by Mathias Bourgoin, Arthur Breitman, and six other researchers in a white paper on arXiv, sTEZ aims to address the growing centralization risks posed by intermediary liquid staking platforms. Rather than replacing direct staking, it serves as a neutral, public alternative managed by the Tezos protocol itself. Any tez holder can participate in aggregated staking without relying on third-party operators, reducing the concentration of power that often emerges with commercial liquid staking services.

The design is accrual-based: all slashing events and rewards are reflected in sTEZ's exchange rate to tez, keeping token balances fungible while exposing holders to the precise economics of staking. This approach ensures that liquid staking functions as fundamental network infrastructure—with deterministic lifecycle rules, transparent on-chain data, and governance anchored in Tezos’ amendment process. The white paper details the motivation, core mechanics, exchange-rate model, regulatory considerations, risk posture, and a forward-looking roadmap. By embedding liquid staking at the protocol level, Tezos aims to eliminate the need for discretionary commercial products, making staking more accessible and decentralized for all participants.