A user can deposit ARCH tokens into the Liquid Finance protocol to receive sARCH tokens in return. sARCH tokens are a representation of balances staked within the protocol.

sARCH is a fungible, reward-bearing token which means that by simply holding sARCH tokens you'll earn interest. This interest earned isn't distributed directly to the holder but rather is represented through the sARCH exchange rate.

The exchange rate increases in value over time relative to the underlying asset because it represents a share of the total amount of staked ARCH within the protocol. This total amount will continue to increase when staking rewards are claimed and staked again, which means users will be able to redeem more assets over time as interest is earned. Each sARCH token becomes convertible into an increasing amount of ARCH, even while the number of sARCH tokens in your wallet stays the same.

Holders of sARCH benefit in multiple ways, but mainly:

  • Earning interest through the sARCH exchange rate which increase in value relative to ARCH over time

  • Gives to ability to use sARCH as collateral throughout the Archway ecosystem and broader Cosmos

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