STAFI PROTOCOL PROVIDES LIQUIDITY SOLUTION FOR ETHEREUM 2.0
Weeks ago, there was so much excitement around Eth communities after the announcement that the long awaited Ethereum 2.0 will be kicked off sometime around Dec 1, In other hand the Ethereum deposit contract was made live to collect the necessary funds to trigger the staking.
Potential Stakers will now be able to deposit their 32 Eth to the deposit contract, the contract must collect 16384 deposit of 32 Eth each, a total of 524288 Eth or about $200 million. The required amount must be ready 7 days before launch date.
Ethereum 2.0 is one of the mostly anticipated event in the history of cryptocurrency, with many communities eager to participate in the staking, therefore locking up reasonable amount of Eth could signal a long bullrum for Ethereum. Nevertheless there are impending issues which discourage Eth communities (Stakers and validators) from participating in the staking;
- Huge capital intensive: for users who are willing to stake eth will have to set aside a minimum of 32ETH in order to join the staking, in view of this many will be discouraged in joining the staking as they can not afford required amount. As Eth 2.0 does not allow delegation while also setting the minimum staking threshold at 32 ETH,
- In Ethereum 2.0, delegation is not allowed and stakers must run a validator node to start earning. so stakers must possess a lot of knowledge about nodes before actually hosting a validator client. In addition, validator nodes must maintain high uptime and avoid behaviors such as double signing, both of which demands further resources and costs from stakers.
Stafi protocol provides liquidity solutions for Ethereum 2.0 staking
StaFi Protocol has released more information on liquid staking introducing the rETH solution to the liquidity problems that may arise with Stakers and validators participating in Ethereum 2.0 staking;
- Stakers will be able to participate in ETH Staking through the Staking Contract deployed on Ethereum 1.0 by StaFi, and one would only need as little as 0.01 ETH to start, or any amount at his own discretion, instead of committing a fixed amount of 32 ETH.
- Stakers are not required to run validator nodes nor spend time and costs maintaining them. StaFi’s Staking Contract (SC) deployed on Ethereum 1.0 will automatically match a staker’s ETH to “well-performing” validators that are in the “Available” state.
- StaFi will allocate staked ETH in SC to a batch of well-performing original validators, who would establish and maintain appropriate amounts of validator nodes to provide staking rewards to stakers net of fees.
Solving the Liquidity Dilemma for Both Stakers and Validators
- For a specific staker, whenever he stakes ETH to the SC, she will automatically receive a certain amount of rETH Tokens (ERC20 version) in return, which is a synthetic representation of her staked ETH balance and corresponding staking rewards. The rETH token may then be traded on a variety of trading venues, and can be used in other DeFi protocols.
- For validators, StaFi will initiate a Liquidity Program, through which they could also sell part of their ETH staked in the SC back to StaFi. Relevant details are specified in the Original Validator portion.
StaFi also solves the following problems for Ethereum 2.0 staking mechanism through rETH:
- The lack of liquidity for staked ETH greatly reduces the willingness of ordinary users to stake. But through rETH, users will be more willing to stake thus increasing the network staking ratio;
- StaFi will not become a validator for Ethereum 2.0, therefore no matter how many ETH are locked in the StaFi Staking Contract, it will not threaten the security of the Ethereum 2.0 chain.
- Since StaFi does not participate in the validation process of Ethereum 2.0 chain, it is a cooperative relationship with the validators and will not harm their interests.
Stafi protocol staking features have been proven superior over other staking platform like Rocket pool and Ankr
StaFi has its own competitive edge compared with other ETH2.0 staking liquidity solutions. We mainly compared our solutions with other Staking platform) in order to make it easier for ETH 2.0 staking communities, stakers and validators to understand. Simply put，StaFi’s rETH solution will have more liquidity for stakers, relatively reasonable lower pledge and more liquidity for Validators, and most importantly the safety solutions of both stakers and validators’ staked funds.
FIS and rETH
Stafi mainnet token, FIS captures the value from rETH growth and scaling in the following ways:
- The amount of ETH staked in the Staking Contract needs to be proportionally backed by FIS token staked by SSV, thus the token value locked (TVL) from rETH is a direct indication of the value of FIS.
- 70% of the income from the rETH solution will be given back to FIS token holders;
- rETH will be integrated with the Polkadot and Cosmos ecosystems through cross-chain bridges in the future, and the bridge service income will also be returned to FIS token holders.
- Original Validators can also stake FIS tokens to increase their credibility and performance score, therefore increasing the likelihood of being staked and matched with.
StaFi designed rETH to be interoperable with other blockchains with competitiveness against similar solutions.
rETH won’t be just operational on Ethereum network alone. StaFi projects rETH to be interoperable with Polkadot and Cosmos using the cross-bridge functionality.
Comparing with other liquidity staking solutions like Ankr and Rocket Pool, rETH exchange rate will be dynamic, with no lock-up. Validators pledge per node will be from 4–16 ETH compared to Rocket Pool 16 ETH, which is fixed. Lastly, StaFi is still the only Eth 2.0 liquidity solution provider that has disclosed its key security system. Both Ankr and Rocket Pool didn’t make theirs public.
About StaFi Protocol
StaFi is the first DeFi protocol unlocking liquidity of staked assets. Users can stake PoS tokens through StaFi and receive rTokens in return, which are available for trading, while still earning staking rewards. FIS is the native token on StaFi Chain. FIS is required to provide security to the network by staking, pay for transaction fees on the StaFi chain, and mint & redeem rTokens.