# Liquid Staking Tokens (LSTs) ## **Token Properties** The stXRP token follows the ERC-20 standard, ensuring compatibility with wallets and DeFi protocols across the [Flare Network ecosystem](https://flare.network/news/category/ecosystem). Unlike traditional staking systems that lock assets for extended periods, stXRP remains fully transferable, allowing users to send, trade, and use their tokens as collateral. The composable nature of stXRP enables seamless integration with existing and future DeFi applications. Developers can incorporate stXRP into their protocols without additional modifications, treating it like any other ERC-20 token. ## **Utility and Use Cases** DeFi integration creates numerous opportunities for LST holders (initially stXRP) to maximize capital efficiency while their original assets remain staked. This provides holders with liquidity and flexibility, enabling popular use cases such as providing liquidity on decentralized exchanges to earn trading fees, or using stXRP as collateral in lending protocols to borrow against their positions. ## **Price Stability Mechanisms** The protocol has built-in economic mechanisms designed to keep the price of stXRP stable and closely aligned with its fair value. The stXRP LST will always be fully backed by the underlying FXRP value in its vault. The stXRP oracle will track its backed value and the price of FXRP via [Flare’s Time Series Oracle](https://flare.network/products/flare-time-series-oracle) (FTSO) to ensure accurate pricing of stXRP. As minting and redeeming stXRP from the vault is permissionless, any market participant can arbitrage price discrepancies between stXRP and FXRP. The way the vault is designed creates a natural arbitrage loop. When stXRP trades at a discount on the open market, arbitrageurs can purchase the discount tokens and redeem them through the protocol for the underlying FXRP. Conversely, if stXRP trades at a premium, users are incentivized to deposit FXRP and mint new stXRP at fair value, and then sell it on the market for a profit. This process is supported by a short unbonding period of less than two days in Phase 1. This allows arbitrage opportunities to be executed efficiently, minimizing the risk of stXRP deviating from its peg. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.firelight.finance/introducing-firelight/core-features/liquid-staking-tokens-lsts.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.