1. Staking Chaos

The (liquid) staking landscape is currently fragmented and inefficient. The rise of specialized L1 PoS blockchains - each designed for specific use cases such as real-world assets (RWA), AI, interoperability, Data Availability (DA), decentralized storage, and payment - has resulted in isolated ecosystems with minimal cross-chain integration. This fragmentation is evident in the liquidity distribution across PoS networks. Despite the staking market exceeding $300 billion, only 18% of the staked assets are liquid, underscoring the inefficiencies in existing liquid staking solutions [1].

Several critical challenges contribute to these inefficiencies:

1. Ecosystem silos: Most L1s operate independently, lacking native user bases and DeFi ecosystems to support organic liquidity flow.
2. Technical barriers: Users face significant difficulties in accessing staking opportunities across chains due to gas fees, security concerns, and interoperability constraints.
3. Token distribution constraints: Since token supplies are finite, cross-chain staking requires liquidity fragmentation across multiple pools, making capital inefficient and increasing security risks.
4. Bridge security and usability limitations: Traditional bridging solutions require separate liquidity reserves for each connection, leading to a complex and insecure cross-chain staking environment.

As a result, existing solutions fail to provide a seamless, capital-efficient, and secure staking mechanism that integrates multiple blockchain networks.

2. The Hidden Layer Contract: Enabling Modular, Cross-Chain Liquidity

To bring order to the current chaos that is staking, Escher introduces a modular, interoperability-driven staking protocol. This protocol is built on the Union interoperability stack and enables users to:

• Liquid stake, restake, and natively stake assets across multiple chains from any chain without requiring direct interaction with individual networks.
• Access the most liquid and efficient DeFi markets while eliminating technical complexities such as gas token management and cross-chain bridging.
• Facilitate seamless liquidity movement between chains ****without locking assets to a single network, overcoming the limitations of traditional staking mechanisms.