Liquid staking is an alternative to locking up a user’s stake: it allows for users to stake any amount of Coin/tokens and to effectively unstake their Coin/tokens without the requirement of transactions being enabled.
What is Liquid Staking
Liquid staking allows you to access your funds even when you’re staking them. The funds remain in escrow, but aren’t “locked” and inaccessible, as they would be with PoS staking. Liquid staking offers the best of both worlds: a passive income and access to your staked funds.
This is done through the issuance of a tokenized version of the staked funds — a sort of derivative — which can be transferred, stored, spent or traded as one would a regular token.
Benefits of Liquid staking
Liquid staking brings a wide range of benefits to all stakeholders, which includes:
- Yield Farming:Liquid staking is an essential component in the practice of yield farming. In a nutshell, yield farming is lending or staking cryptocurrencies in return for incentives like interest. When a trader locks up money in one protocol and receives a wrapped-up or tokenized version of that money, this happens. The trader will then deposit the tokenized assets into a different liquid staking protocol and receive a new tokenized asset in exchange. As a result, traders can lock up effectively one amount of money and earn a dividend on multiple assets at once. Yield farming is dangerous by nature, though. Do your own research and be mindful of “loan-to-collateralization” ratios that point to potential liquidation concerns.
- Crypto Backed Loan: Sometimes, investors will need to reshuffle their portfolios to make some assets more liquid (accessible) than others. For example, an unexpected circumstance could mean a crypto holder may need to gain access to extra fiat currency fast. However, many crypto investors are reluctant to sell their assets. As an alternative, investors can use their existing crypto assets to get a crypto-backed loan using a liquid staking protocol. As such, by locking up funds and receiving a tokenized liquid version of their assets, investors can then convert this into fiat currency.
- Cross-chain interaction: because liquid staking tokens are essentially derivative contracts, they can theoretically exist independently of the chain and circulate between protocols.
- Quick access to funds: Another benefit of liquid staking is the ability to gain access to funds quickly. This is in contrast to many proof-of-stake (PoS) protocols that include a lengthy un-staking process or penalties for un-staking prematurely. Gaining access to funds quickly can be helpful in times of market turbulence or for any unexpected payments.
It is the ideal tool for the staking and the DeFi industries to collaborate
Persistence - The Liquid Staking Hub
Persistence is a Tendermint-based, specialised Layer-1 network powering an ecosystem of DeFi applications focused on unlocking the liquidity of staked assets.
Persistence is a Protocol powering Institutional Open Finance. Persistence bridges DeFi and Traditional Finance by facilitating borrowing of Cryptoassets using Real-world assets as collateral.
Persistence facilitates the issuance and deployment of liquid-staked stkASSETs, allowing users to earn staking rewards while participating in DeFi primitives, such as lending/borrowing and liquidity provisioning on DEXs.
Persistence aims to offer a seamless staking and DeFi experience for PoS (Proof-of-Stake) users and enable developers to build innovative applications around stkASSETs.
Persistence’s ecosystem of multi-chain DeFi products enables access to various emerging asset classes: Proof-of-Stake (pSTAKE), synthetic commodities (Comdex), and interoperable NFTs (assetMantle).
While PoS is undoubtedly becoming more prominent in the digital asset space, the primary drawback hindering the continued growth of it and the DeFi industry is the locking up of digital capital. To secure PoS networks, stakers’ funds are rendered illiquid for their staked duration. This ultimately slows capital velocity and reduces the amount of capital able to participate in DeFi.
In an attempt to resolve this pain point, pStake was introduced into the Persistence ecosystem. The protocol aims to alleviate the illiquidity experienced for staked assets through a mechanism called liquid staking. By issuing 1:1 pegged ERC-20 representative tokens, users can secure PoS networks natively and have the ability to participate in Ethereum DeFi at the same time, increasing available capital and unlocking opportunities for increased yield.
pSTAKE has launched liquid staking support for Cosmos’ $ATOM and Persistence’s $XPRT tokens, with support for more assets such as $ETH (Ethereum), $SOL (Solana), and other Cosmos-based assets coming soon. Since launch, more than $14M of $ATOM and $XPRT has been staked by pSTAKE users and the liquidity of stkTOKEN-ETH pools on SushiSwap now stands at over $25M in TVL.
XPRT Tokenomics and Utility
The Role of XPRT
XPRT carries a variety of use cases within the Persistence ecosystem, including governance of the Persistence main-chain, participating in staking to contribute to network security, and its role as a work token.
XPRT holders will be able to take part in protocol governance by issuing proposals and voting on various factors which will impact the broader Persistence ecosystem.
As the Persistence chain runs on delegated Proof-of-Stake based Tendermint PBFT consensus engine, staking is integral to ensuring a secure and robust network.
Persistence has onboarded some of the world’s top validators, distributed globally. XPRT token holders will be able to delegate their tokens to our network validators for staking. Stakers will receive rewards in the form of XPRT in return for contributing to the security of the network.
01node is a high quality staking and validation service headquartered in Romania. We have the expertise and time tested infrastructure as a highly secure and reliable node. Our track record shows this reliability, We prioritize great focus on security and we ensure the best practices for every service we offer. We aim to provide the best performance and reliability through our physical infrastructure collocated in tier-3 datacenters.
We are a team of highly skilled and dedicated professionals with decades of experience in the fields of software development, IT infrastructure, cryptography, and financial services. Our existing validator nodes have secured value on several POS networks since their inception such as Terra, Iris, Solana, Cosmos, Near, E-money, IOV, Solana, Skale, Secret Network, Oasis and others who will soon launch like Celestia or Nomic chain, and Near Protocol.
Our community has an active voice in how we participate in the decentralized ecosystem, and our combined strength will propel the project towards a successful future. We vote on most of the governance proposals, and consult with our delegators before this, it’s important to note that we always vote on what is best for the network.