Efficient Staking — The Role of StaFi’s Staked Derivatives
What was your experience the first time you drove an automatic gear car? It was definitely smooth. You had control while doing less than you normally would do with a manual stick shift car. The driving experience just got more efficient. Many of life’s processes depend on certain innovations and ingenious moves to become more efficient. Fertilizers make crops grow fast. Modifying crops themselves, specifically, makes them grow even faster.
This is blockchain technology we are supposed to be talking about. Doesn’t matter though. The blockchain ecosystem also seeks perfection as projects look for ways to make existing processes even more efficient. Today I will be talking about the staking process and how StaFi Protocol is making it more efficient.
Staking is an interesting subject within the cryptocurrency and blockchain space. It is very easy to know why. The idea of making money from the cryptocurrency space is deeply seated in our subconscious and staking presents one of the safest ways to do this. With staking, you are locking up your crypto assets within a crypto wallet or a staking platform to earn rewards. Rewards are secondary however, as the main aim is to help secure the network but as we have come to find out, it is basically about the money. This desire for more rewards has also turned out to be one of the main issues with staking but how is that the problem?
The Staking dilemma
When a user decides to stake his/her assets, they usually do it more because they want to earn returns on their assets passively than because of the need to secure the network of their favourite project. The moment they feel that they are not getting enough incentives for keeping their assets (as opposed to trading and lending), they would most likely pull them out. The truth of the matter is that while the APYs for staking your assets are more than what is obtainable in real life banking, they usually do not compare to what these users can make in other DeFi processes or by trading their crypto. The thought of users pulling out their assets from staking platforms is scary. Pulling them out is an absolute disaster. What then can we do to salvage the situation? How do we remove the extra pedal from this manual stick shift car and make it automatic? Well, StaFi Protocol has found a way to make the staking process so efficient but how does this happen?
State representatives! Yes!!! State representatives
Staked representatives are replicas of crypto assets given to stakers by the staking platform. How is this supposed to make the staking process better? Let’s say a user stakes his ETH on the StaFi platform,he will be given staked representative tokens, rTokens pegged 1:1 with the staked token. In the case of ETH, it is rETH. This user will receive staking rewards from staking the ETH as usual. The good news comes from the rToken. Why the ETH is providing staking rewards in the StaFi staking platform, the user can use the rETH to seek further yields. One example is the liquidity farming of rETH pool on Curve finance. You can also stake your rETH/ETH LP token for an APY that is more than 35.15%. This means that users get rewarded two ways; by receiving staking rewards and also by getting rewards from various DeFi processes. We are also taking care of the issue of liquidity as users can effectively hedge against inflation.
Remember the talk about efficiency in the staking process. Staked representatives have given us answers to some of the issues a user might experience while staking or trying to. It’s really great to have StaFi coming through for us. Your liquid staking platform for a large array of top crypro asset classes.
Your automatic shift car is ready to zoom into the sunset.
StaFi website: https://stafi.io
StaFi Twitter: https://twitter.com/stafi_protocol