Bringing Liquidity to rTokens — rDEX
When we talk about decentralized exchanges, our minds go to cryptocurrency exchanges that allow users or traders to exchange their favourite cryptocurrency coins or tokens without the need for central bodies or intermediaries. This is as opposed to what is obtainable with centralized exchanges. There are so many decentralized exchanges in the space today and swapping of cryptocurrencies has never been easier. With the rDEX, however, I saw another dimension of what a DEX can actually offer. With rDEX, you are not exchanging cryptocurrencies. You are exchanging staked representatives of cryptocurrencies. Sounds confusing? Let’s take a dive into what staked representatives are and why the rDEX is so important.
The easiest way to see staked representatives is to see them as receipts. When you go down to a store to get an appliance, you get issued a receipt to show that you have purchased the item. Explaining staked representatives, we might have to go a little deeper. First, we go back to staking, where users and holders of certain cryptocurrencies keep or lock their tokens in a crypto wallet or staking platform so as to secure the network. Let’s say User A stakes his BNB to secure the Binance network, the BNB remains locked in the network until he or she unstakes. This effectively locks the BNB out of circulation and leaves User A with only the little rewards that come from staking. The presence of high-yield APYs in the DeFi space is making staking rewards look less enticing and this would lead to stakers unstaking their assets in search of better yields. This will negatively affect protocol security as users try to migrate from POS to DeFi yields. This is where StaFi protocol comes in with liquid staking, allowing users to still stake and have their assets liquid at the same time. They do this by offering staked representatives of the staked assets to the users when they stake. Let’s say you stake your BNB on the StaFi platform, you get issued a staked representative token, rBNB, that is pegged 1:1 to your BNB and can be used for further yield outside.
With rDEX, the focus is on being able to swap the staked representatives for one another after receiving them for staking your assets. Currently, there is a liquid staking solution for about eight cryptocurrency assets on StaFi protocol. They are BNB, ATOM, FIS, SOL, MATIC, DOT, KSM and ETH.
On the rDEX, you will be able to swap these staked representatives, seamlessly.
Purpose of rDEX
By now, we are beginning to see how useful the rDEX would be to the POS system as well as the different communities at large. Let’s elaborate further on the various purposes the rDEX would serve.
- Liquidity of rTokens: The rDEX would go a long way towards ensuring that there is continuous liquidity for any of the current rTokens and any other one that might be in the future. Many users would provide liquidity for the various pools ensuring that there is constant availability of rTokens.
- rToken swaps: This is the feature that interests me the most. Imagine being able to swap different rTokens with minimal fuss. To further state the importance, let’s say that a user wants to take part in a yield farming opportunity in the DeFi space that uses rETH and the user has only SOL. Instead of finding a way to sell his SOL (which may be a long term bag) the user can stake the SOL on StaFi platform, receive the staked representative rSOL. On the rDEX platform, the user can then swap rSOL for rETH easily and carry out the farming activity for more yields. Life made easy.
- No cross-chain: With the rDEX, need for cross-chain compatibility is greatly reduced. All you have to do is just stake your assets and you can be trading DOT, ETH or whatever gems, without barriers, easily.
The rDEX journey so far
The rDEX platform is currently live but it is on testnet. There was a bug bounty that was on for finding bugs and coding errors but it has ended. However there is an ongoing at the expo county on immunefi and you can earn rewards for helping to secure the DEX. The rDEX platform has been audited by Peckshield.
Stay tuned for more updates on the rDEX as StaFi Protocol remains committed to making the POS more efficient.
StaFi website: https://stafi.io
StaFi Twitter: https://twitter.com/stafi_protocol
rDEX Twitter: https://twitter.com/rDEX_finance