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Proof-of-Stake, Liquidity, Validator, Staking

Kintsu is a new liquid staking protocol that introduces a performance-based validator marketplace on Monad. It is coordinated by a single governance token, which drives value to participants, while transparently balancing decentralization and yield maximization dynamics.

Staking, the mechanism that allows governance in proof-of-stake (PoS) networks, comes with certain limitations in terms of participation and liquidity. Most chains require a minimum staking amount to become a validator — an amount usually high enough to exclude smaller players.

Moreover, traditional staking locks up validators’ tokens, which renders the opportunity cost of other uses for them. This also removes a considerable amount of liquidity from the ecosystem.

Liquid staking has emerged as a practical innovation to these limitations. The mechanism issues derivative tokens, called liquid staking tokens (LSTs), that represent the value of staked assets.

This reintroduces liquidity into an otherwise static system. LSTs are tradable and usable as a proxy for the underlying gas tokens across decentralized finance (DeFi) applications, which allows users to deploy capital in secondary market activity while still accruing yield from staking. Yet the mechanism is not without its own complications.

Early iterations of liquid staking relied on team-curated validator sets or rigid allocation rules, concentrating power among a limited group of operators. Such concentration risks distorting consensus. When too much control over gas allocation pools is in one place, the “liquid” layer begins to resemble centralized custody, weakening the decentralization proof-of-stake was meant to guarantee.

Decentralization restored in liquid staking

Kintsu proposes a structural correction to liquid staking by giving control back to network participants. Instead of relying on static validator lists or team-controlled algorithms, it introduces a system where delegation is driven by onchain governance — open, transparent and performance-based. This design turns staking yield into a credibly neutral public good.

At the center of this model is sMON, Kintsu’s liquid staking token for Monad. sMON represents staked MON that remains fully usable across DeFi — circulating through lending, trading and derivatives protocols instead of sitting idle. This enables capital to keep moving while validators continue to secure the network, aligning both liquidity and security under one system.

Validators on Kintsu don’t receive delegation by default — they earn it. Governance tokenholders will continuously rebalance stake toward validators who deliver performance and reliability, making yield directly responsive to validator quality.

The protocol’s handling of MEV reinforces this dynamic. Instead of prescribing a single approach, Kintsu allows validators to use their preferred MEV infrastructure and incorporate the resulting outcome into their overall yield. This flexibility broadens competition and prevents locking the network into a narrow operational model.

Protocol debuts on Monad

After completing a $4 million seed funding last year, which saw support from Castle Island Ventures, F-Prime, Brevan Howard Digital, Spartan, Animoca and CMT Digital, Kintsu gears up to deliver its, non-custodial staking system. The protocol recently completed multiple audits and launched in tandem with Monad’s mainnet.

Kintsu also launched a Points Program as part of its debut. Participants who engage early and support sMON adoption earn points that will help determine future allocation of Kintsu’s governance token.

Over the coming period, Kintsu will center on activating governance and extending sMON’s reach across Monad’s emerging DeFi environment while deepening partnerships and integrations. A key part of this evolution will be KSU, the governance and coordination utility token that will underpin Kintsu’s validator marketplace. As the protocol moves into this stage, its long-term direction becomes clearer: staking is treated not as a locked, isolated commitment but as a participatory layer that boosts yield, liquidity and network security.

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