SEKAI

A Secure Elastic Kernel for Asset Innovation on Hyperliquid.

[SEKAI @sekai_fi]

@0xSprite_ >he knows

[SEKAI @sekai_fi]

1/ The Sekai public testnet is now live.

Sekai is a liquid staking protocol for Hyperliquid where anyone can launch their own LST - with instant exit liquidity via Sekai DEX from day one.

Sekai brings a few things new to HyperEVM liquid staking - tradeable unstaking positions, holder-governed LSTs, a shared exit DEX, and staking-enabled primitives (HIP-3 exchanges, quote assets, etc.) managed directly from our frontend.

This thread walks through all of these components, and who Sekai is for.

[SEKAI @sekai_fi]

1/ The Sekai public testnet is now live.

Sekai is a liquid staking protocol for Hyperliquid where anyone can launch their own LST - with instant exit liquidity via Sekai DEX from day one.

Sekai brings a few things new to HyperEVM liquid staking - tradeable unstaking positions, holder-governed LSTs, a shared exit DEX, and staking-enabled primitives (HIP-3 exchanges, quote assets, etc.) managed directly from our frontend.

This thread walks through all of these components, and who Sekai is for.

[SEKAI @sekai_fi]

@MadGarizs

[SEKAI @sekai_fi]

@surgegainz

[SEKAI @sekai_fi]

7/ Get started

Sekai is now live with our public testnet: https://t.co/N5QungtNv9

Everyone is free to try minting, redeeming, and swapping existing LSTs, as well as providing liquidity to and market-make the Sekai DEX.

Creating LSTs is currently restricted to close partners and Sekai Kappa NFT minters - contact us if you'd like to launch your own.

Bug reports are also greatly appreciated. Please join our discord to stay up-to-date on everything Sekai.

[SEKAI @sekai_fi]

6/ Who Sekai is for

On Hyperliquid, stake is required to access primitives like HIP-3. We expect this to drive a long tail of purpose-built Sekai LSTs, each formed around the primitive it exists to unlock, such as:

- HIP-3 deployers who want to crowdsource and control the 500k-HYPE stake behind their exchange, sharing venue fees with their stakers.
- Prospective HIP-4 deployers preparing prediction markets, should HIP-4 follow in HIP-3's footsteps.
- Quote-asset issuers wishing to crowdfund the 200k-HYPE stake.
- and in the future, potentially HIP-5-6-7...

But prospective operators have also approached us with several other use cases. Among others:

- Existing validators offering their delegators liquid staking under their own brand.
- Prospective validators bootstrapping toward the active set: accumulate stake through an LST that earns yield in the meantime, then route it to your own node once it clears the active-set minimum.
- Online communities offering holders special benefits.
- Protocols, organizations, instutitions and treasuries that want their HYPE staked but liquid, with chosen validators, deposit caps, and compliance whitelists.

[SEKAI @sekai_fi]

5/ Sekai DEX

Normally, every new LST has to bootstrap and incentivize its own amm liquidity, which is a big constraint for small or new LSTs.

Sekai DEX is built with this in mind. It is an instant exit facility exclusively for Sekai LSTs: one shared HYPE pool serving every listed Sekai LST.

Holders can swap their LST and receive WHYPE instantly. The DEX prices the swap on a per-LST risk curve, starts the unstake in the background, and holds the redemption receipt as inventory.

Market makers can then buy these receipts before maturity at a time-decaying discount, refilling the pool. Unsold receipts settle at par at maturity, with the spread going to LPs and the protocol. Each LST gets its own pricing and exposure caps, set by Sekai governance following a risk assessment, so no single LST can drain the shared pool.

This is what makes a long tail of small LSTs viable, and it frees operators from bootstrapping liquidity altogether.

https://t.co/yHjEuDQUvL

[SEKAI @sekai_fi]

https://t.co/bH8y3bFKsd

[SEKAI @sekai_fi]

4/ Holder governance

As a Sekai LST operator, you can optionally hand control of an LST's parameters to onchain governance. It is opt-in and off by default; an LST launches creator-controlled. When and if an operator chooses, authority can be moved to a governor and timelock - all at once, or granularly ad hoc, allowing for gradual decentralization.

The governor's voting power can be the LST token itself, so holders control it directly, or it can be an external governance token. Governance can change fees, validators, caps, the stake floor, as well as every other parameter.

One of many example unlocks: an unruggable LST whose parameters answer to its holders. Take the stake floor, the parameter that keeps an LST above its HIP-3 or quote-asset stake requirement: a big worry for prospective LPs is redeemability. If the project doesn't pan out, does the floor lock my capital indefinitely? We have already seen LSTs with stake floors trade at significant discounts.

If this single parameter is handed to LST holder governance, holders now have great guarantees that they ultimately will be able to exit, as they can vote to lower it and unwind. The LST should never trade at a persistent discount on exit uncertainty alone - if it does, anyone can buy the discount, vote the floor down, redeem, and arb the discount.

[SEKAI @sekai_fi]

3/ Exits and withdrawal receipts

When a user redeems a Sekai LST, the protocol atomically burns the LST, records the owed HYPE claim, and mints a transferable ERC-721 receipt to the user. Redeeming is instant, while the underlying HYPE becomes claimable after the 7-day unbonding period.

With Sekai, we tokenize unstakes-in-progress, making them assets that you can hold to maturity, transfer, or sell for instant liquidity. Also a first on HyperEVM.

Receipts are designed this way to enable Sekai DEX - our answer to the liquidity conundrum affecting smaller LSTs, and is a major differentiator of launching an LST via Sekai (more on this below).

[SEKAI @sekai_fi]

2/ Sekai LSTs

A Sekai LST is a liquid ERC-20 representing staked HYPE and its yield, usable across defi. Staking runs entirely through the CoreWriter and L1Read precompiles, with no trusted oracle. A first on HyperEVM.

An LST operator can configure:
- their own chosen validator(s),
- optional staking yield commissions and mint/redeem fees,
- deposit caps,
- stake floors (e.g., 500k HYPE),
- mint/redeem access controls,
- the LST's share of fees from staking-enabled primitives (e.g., HIP-3 trading fees).

[SEKAI @sekai_fi]

@callmexenom 🫡🫡

[SEKAI @sekai_fi]

https://t.co/bH8y3bFKsd

[SEKAI @sekai_fi]

@MotusAk T minus soon

[SEKAI @sekai_fi]

Sekai enables businesses, protocols, wallets, collectives and more to safely bootstrap their own customizable LST on Hyperliquid.

LSTs built on Sekai benefit from the wider Sekai ecosystem, including deep secondary liquidity via Sekai DEX, tooling to manage HIP-3 & HIP-1, permissionless quote assets, and much more.

[SEKAI @sekai_fi]

@HyperliquidX Purry christmas

Thank you Jeff

[SEKAI @sekai_fi]

@murakamikaze gigaHYPE

[Pashov Audit Group @PashovAuditGrp]

Pashov Audit Group 🤝 @sekai_fi

Wrapping up our audit with Sekai, we’re proud to extend our involvement as an official security partner, securing their novel protocol architecture on Hyperliquid!

Sekai’s LSTs & dex will go live with the industry’s highest security standards🫡

[SEKAI @sekai_fi]

@TheNooobKiller gKappa

[SEKAI @sekai_fi]

https://t.co/HgSpE87p6B

[SEKAI @sekai_fi]

@0xBobdbldr skiHYPE