In a major step forward for IOTA’s decentralized finance (DeFi) ecosystem, Swirl a liquid staking protocol officially launched on the IOTA mainnet on Wednesday, May 7. This marks the first time liquid staking is available on IOTA’s layer 1 network, representing a pivotal innovation designed to boost both liquidity and capital efficiency for users.
With Swirl, IOTA holders can now stake their tokens while maintaining liquidity, thanks to the issuance of stIOTA, a liquid derivative token. When users stake IOTA through Swirl, they receive an equivalent amount of stIOTA, which remains fully tradable. Over time, the staked IOTA generates rewards in the range of 10%–15% annual percentage yield (APY), which are automatically compounded back into the staking pool removing the need for manual reward management.
Crucially, the number of stIOTA tokens in circulation remains fixed, meaning its value appreciates as staking rewards accumulate. For instance, 100 stIOTA obtained from staking 100 IOTA could be redeemed for 110 IOTA after one year at 10% APY, effectively increasing its redeemable value over time.
Beyond staking, stIOTA tokens can be traded on secondary markets or used as collateral across DeFi applications, opening the door to broader financial opportunities within the IOTA ecosystem.
Dominik Schiener, Co-Founder and Chair of the IOTA Foundation, highlighted the strategic impact of the launch:
“Our partnership with Swirl enables new forms of utility through DeFi. By equipping the IOTA ecosystem with tools that users need to pursue sustainable capital growth strategies and doing so with the right partners who share in our commitment to decentralization, security, and a user experience marked by diversification we are setting new standards for the future of decentralized finance.”
The introduction of liquid staking represents a significant milestone in IOTA’s broader DeFi ambitions. As users seek flexible options to grow their holdings while participating in network consensus and governance, Swirl’s model offers a compelling and user-friendly solution.
With this innovation, IOTA now joins the growing ranks of blockchain networks embracing liquid staking as a cornerstone of modern DeFi infrastructure.
