Canonical LST: A Protocol-Native Liquid Staking Solution for Tezos

Canonical LST (sTEZ) is an enshrined, protocol-native mechanism designed to mitigate the centralization risks associated with liquid staking intermediaries. Intended to complement direct staking rather than replace it, Canonical LST provides a neutral, public alternative managed directly by the Tezos protocol. It allows any tez holder to participate in aggregated staking without reliance on third-party operators. sTEZ follows an accrual-based design: all slashing events and rewards are reflected in the token's exchange rate to tez, keeping balances fungible while exposing holders to the precise economics of staking. This approach ensures that liquid staking functions as fundamental network infrastructure--with deterministic lifecycle rules, transparent on-chain data, and governance anchored in the amendment process--rather than as a discretionary commercial product. This white paper summarises the motivation for enshrining liquid staking, the core mechanics, exchange-rate model, regulatory touchpoints, risk posture, and forward-looking roadmap for Canonical LST.