Anticipate rSOL on StaFi Protocol
On the 6th of July, 2021 we all got the great news that rSOL launch on StaFi mainnet was in the offing and we all anticipated this move till date. It is a move that ticks all the boxes but how exactly is this a great move? To understand this, let’s talk about StaFi and Solana.
StaFi Protocol
StaFi Protocol is the first DeFi platform to bring up the case for liquid staking. When we say liquid staking, we effectively imply a kind of staking where the liquidity of staked assets is unlocked. Are state assets actually locked? Yes they are. The name TVL actually means “total value locked’’ and it is used to describe the total value of state assets in the staking pool. When you stake, you are effectively locking your assets within the cryptocurrency blockchain in order to secure the network and earn rewards. In normal staking platforms, once your gems are staked, you cannot use them for any other purpose as they are effectively locked. StaFi protocol came out with a method of getting around this. How exactly did they do this?
They did it by providing staked representatives for your staked assets. When you stake your gem (say ETH) on StaFi protocol, you would be issued a representative for that staked token which would then be used for other DeFi processes. It has the same value as your staked assets and serves as a guarantee that you actually have the gems but that they are locked up somewhere in staking. With this model you are able to maximize your reward as he would earn normal staking pools and also rewards from your entry into the DeFi space. Let’s talk about Solana.
Solana
It is hard not to notice the waves that Solana has been making in the crypto space. It is the age of blockchains and all of them are battling it out for supremacy but in the long-term, interoperability and cross-chain functions would be the biggest goal for blockchain technology. When you talk about speed, efficiency and security, you are most definitely referring to Solana. Unlike most other blockchains that work with one mechanism, Solana works with two (2) and that might be the basis of its success. Solana uses the proof of stake (PoS) mechanism as well as the proof of history (PoH) which is a rather novel mechanism. The proof of history has no preference for speed (as with the proof of work) or the size of your stake (as with the proof of stake). It uses time and as such transactions are processed just as they come. This makes the blockchain very fast with a transaction speed of up to 50,000 transactions per second. SOL is the utility token of the Solana ecosystem.
Enter rSOL
As stated earlier, StaFi works by providing staked representatives of your staked assets. rSOL is the representative of SOL on the StaFi protocol. To receive rSOL, you would have to stake SOL through Stafi’s staking contract. With this, you can earn rewards for staking SOL while you use the rSOL to trade or carry out other DeFi operations. This is also possible because like other rTokens, rSOL would be ERC-20 compatible.
The staking contracts on StaFi are directly connected to Solana. As soon as the staking proof is validated by the staking contract, rSOL would be issued to users who staked SOL. This rSOL would serve as a receipt that they would use to claim their staking rewards and collect the SOL that they staked.
Are SOL and rSOL different?
Yes definitely. They have the same value but they differ. Refer to this table below to see how they differ.
Any extra benefit for staking my SOL through StaFi?
There are many benefits of staking your SOL on StaFi. These include
1. Liquidity: Through liquid staking, your state assets are made liquid again and you can use them for other uses while staked.
2. Higher APR: The APR on StaFi is competitively higher than what you would get for staking the same assets on other platforms.
3. Auto compound: On StaFi, the protocol can help you to restake your rewards for higher yield.
4. DeFi integration: Imagine being able to use your SOL in the DeFi ecosystem for more yield. That is the beauty of StaFi.
Let’s keep our eyes open as we anticipate our rSOL.
Contact
StaFi website: https://stafi.io
StaFi Twitter: https://twitter.com/stafi_protocol
Solana Website: https://solana.com
Solana Twitter: https://twitter.com/solana
