Liquid staking has proven to be the solution to the challenges haunting POS chains. Staking, for instance, remains underutilized due to the stifling requirements for participation. This needs to change for POS chains to attain the expected heights.
Challenges Linked To Staking On POS Chains
To truly understand how liquid staking has helped POS chains look no further than the challenges that affect these blockchains. At the top of the list is the steep staking quantity. Most POS chains have a fixed minimum number of tokens that can be staked by a user.
This puts off most regular stakers since not everyone can afford to meet such requirements.
Another problem facing POS chains is the locking period. Staking on these networks means you are subject to the rigid locking period. The implication is an inability to access liquidity whenever you want. Typically, you have to wait for weeks to access your stake.
Perks Of Liquid Staking Solutions
Challenges that affect POS chains are resolved through liquid staking solutions. Here are some of the benefits of opting for this service:
1.Access to liquidity
By staking on POS chains through liquid staking solutions, you can access your stake whenever the need arises. That’s one of the biggest advantages of going through such third parties. Liquid staking solutions like StaFi requires users to stake their asset in its staking contract and they get synthetic staking derivatives, which can be traded. This explains why access to liquidity is not a problem when you use such liquid staking solutions.
2.Lower Entry Barrier
Staking on POS chains often requires a minimum, which puts many would-be investors off. With liquid staking solutions such as the Staking Finance Protocol, the entry barrier is much lower, so a lot more people participate in staking. For instance, staking on the Ethereum 2.0 Beacon Chain has a minimum of 32 ETH to partake in staking, if you are going solo. However, using a third-party liquid staking solution like StaFi means you can stake a much lower quantity of ETH.
3.Less Slashing/More Profit
Everyone staking on POS chains is doing so to get rewarded for securing the blockchain through their stakes. Once you go solo, the risk of slashing is higher, which can result in a much lower potential reward or even the likelihood of losing your stake. Using liquid staking solutions like StaFi reduces the chances of slashing, so you are certain to get the maximum reward.
The StaFi Edge That Users Aren’t Aware Of
These benefits highlighted earlier are available to most liquid staking solution vendors, not just StaFi. Yet, Staking Finance Protocol has several aces up its sleeve that most users are either not aware of, or they aren’t looking at the big picture.
Here are some of the reasons why StaFi stands out:
1.Useful Synthetic Staking Derivatives
StaFi’s synthetic staking derivatives (rTokens) aren’t just receipts as is the case with other liquid staking solutions. rTokens can be used in lending, trading, and staking. For instance, you can staking rETH on several DeFi protocols such as Curve Finance. Staking Finance is focused on expanding the dragnet for its rTokens – and we see that in the DeFi protocol’s growing collaborations.
2.Most POS Chains Covered
Another StaFi edge that’s less talked about is the number of POS chains covered by the liquid staking solution vendor. At the moment, the DeFi protocol provides a liquid staking solution to more than 8 POS chains, which is more than what you’d get with other vendors. That’s a big deal if you’re staking on multiple chains; there’s no reason to use several liquid staking vendors, so you save more money on fees.
3.A Reputable Platform
Most liquid staking solutions lack the StaFi reputation. The DeFi protocol has its native token, FIS, listed on major centralized exchanges – a huge feat for any platform. rTokens like rETH are listed on Curve Finance, which is something much of the competition is yet to achieve. Anyone staking assets through liquid staking vendors needs to use reputable platforms, and they don’t come bigger than StaFi.
4.More Liquidity than Elsewhere
Stakers rely on liquid staking vendors to cater to their liquidity needs while staking on POS chains. The catch is this might be a huge burden for most except StaFi. With the DeFi protocol, liquidity issues are totally nonexistent. StaFi achieves its collaborations with DEXs on multiple blockchains though efforts are currently in progress to have the StaFi DEX where all rTokens can be traded against the FIS.
5.Innovation Is Not Neglected
StaFi will remain in the liquid staking picture for a long time due to its innovative drive. The liquid staking protocol remains focused on finding more ways to alleviate the suffering of stakers blockchain-wide. StaFiHub is one of the DeFi protocol’s latest additions towards ensuring a viable liquid staking solution is available to as many people that need such.
Conclusion
StaFi users are the biggest gainers of the liquid staking solution service. The DeFi protocol provides stakers with an edge they won’t find anywhere else. With the instability in the market, it’s probably the right time to stake on POS chains through Staking Finance.
For more information about StaFi and products, visit the websites below:
Website: www.stafi.io
rFIS Product: https://rtoken.stafi.io/rfis
rETH Product: https://app.stafi.io/rETH/staker/info
rDOT Product: https://app.stafi.io/rDOT/staker/index
rKSM Product: https://app.stafi.io/rKSM/staker/index
rATOM Product: https://app.stafi.io/rATOM/staker/index
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
Image Excerpt: https://hackernoon.com/what-is-liquid-staking-and-how-can-it-improve-the-defi-ecosystem-232331i3