Liquid staking wasn’t always the viable alternative it is today. The solution was tied to one thing: Trust. Users had to trust the platform, making it significant in the scheme of things. You had to trust a third party to provide tokenized assets in exchange for assets staked on a POS chain. You also had to trust the platform won’t take over your tokens or allow backdoor access to your stake. These issues made liquid staking look like a backwater solution when it should be revolutionary.
The Rise Of StaFi Protocol
When Proof of Stake (POS) became the preferred consensus mechanism, the future of staking was born. The advent of this consensus mechanism led StaFi to begin offering a unique liquid staking solution. Of course, the issue of trust was dealt with accordingly; the De-Fi protocol solved it using a novel approach. StaFi relies on a multisig staking contract, which guarantees a few things: that;
- Deposits are staked as desired and
- That unauthorized persons don’t get access to the one’s deposit.
StaFi changed the liquid staking game through its launch of rTokens. The De-Fi protocol provide stakers with staking derivatives equivalent to their deposit.
The StaFi Advantage
Staking Finance might not have a first-mover advantage in the liquid staking business, but it sure offers certain perks. The De-Fi protocol isn’t just issuing its staking derivatives as receipts, but it’s adding an avalanche of utilities to these tokens.
StaFi has teamed up with lots of projects in the De-Fi space. These collaborations aim to serve as income routes for rTokens holders, letting them maximize the gains possible in this space without having to throw in more funds.
StaFi continues to push for more PoS chains to be covered is probably another edge the DeFi protocol offers. The need to ensure everyone enjoys the dividends of liquid staking is a hard find in the crypto space.
StaFi has that credibility factor going for it. Not many projects have their native token listed on one major exchange, but FIS, StaFi’s native token is currently listed on several reputable exchanges. This speaks to how highly rated the liquid staking solution provider is viewed.
How Did StaFi Manage To Make Liquid Staking Attractive?
The fact remains that liquid staking wasn’t always attractive. For many, the risks just seem to overwhelm whatever gains it provided. However, StaFi has turned that around. How did the DeFi protocol achieve this? Here are some of the things StaFi did right:
Getting rETH On Curve
One of StaFi’s biggest move to date was getting rETH listed on Curve. Everyone knows Curve Finance is one of the most popular De-Fi protocols, which makes the listing of rETH on there a solid move by the StaFi team. Of course, this move didn’t happen in a flash. Moves like that require sacrifices, and StaFi paid its dues. One of such was the sharing of a Curve bribe to liquidity providers on Curve to vote for StaFi.
It’s worth noting that StaFi is a decentralized platform and the Curve listing had to be voted on. So of course, voters also made this possible.
Insurance Coverage Offered
Regardless of how liquid staking is packaged, the risks remain conspicuous to anyone that pays attention. Staking Finance understood how the risks involved in liquid staking are affecting the average investor’s interest in staking, so insurance coverage was brought into the picture.
StaFi partnered with Tidal, an insurance policy vendor for crypto projects. Through this partnership, StaFi ensures users of its protocol have access to valuable coverage for their deposits. With this insurance coverage, users need not worry about the safety of their deposits as assets are refunded based on the page based on coverage taken.
Utility For rTokens
Perhaps the narrative that has made StaFi’s liquid staking solution attractive is the utility of rTokens. Previously, most solutions centered on issuing these staking derivatives as receipts that can be exchanged for stables. However, StaFi has done something different by showing these tokens can be used for something more.
By opting for StaFi, you can use these rTokens to farm other assets, lend them to borrowers, accruing interest in the process. These are new territories that Staking Finance has brought to the limelight. And we expect these staking derivatives will have more uses as collaborations increase.
Conclusion
StaFi might not be the first DeFi protocol to provide a liquid staking solution, but it did make the technique more attractive to the average investor. Not many were enthusiastic about liquid staking until StaFi came along – and that’s such a big deal.
You can learn more about StaFi Protocol by visiting the websites below:
Website: www.stafi.io
Twitter:@Stafi_Protocol
Telegram Chat: https://t.me/stafi_protocol
Telegram Announcements: https://t.me/stafi_ann
Discord: https://discord.com/invite/jB77etn
Forum: https://commonwealth.im/stafi