Stone designs the first liquid POS farming strategy in DeFi, starting with staked ETH 2.0
In this post, we will provide more details and design considerations for one of the most innovative asset pools and strategies that Stone will bring into the DeFi space and achieve Rock Solid Yield.
Stone will bring staking yields from other Blockchain to Ethereum and it’s liquid
At Stone, we are building the first liquid staking strategy for users to harness Rock Solid Yield from various Blockchains such as Ethereum 2.0, Polkadot, Solana, Oasis etc. POS chains’ rapid progress has opened up numerous possibilities for builders like Stone to innovate in DeFi Space.
While various liquid staking providers such as Ramp and StaFi are working on providing a liquid token to represent the ownership of staked tokens and its future yield, the liquid token can be seen as an interest-bearing bond. A few challenges still remain to make such liquid token really valuable:
- Staked tokens are subject to slashing risks and security risks by the staking providers (It is important to price in such risks for redemption consideration, and provide preventative methods to protect users’ funds)
- Lack of a trading market to buy and sell the liquid token with high availability (if there is no viable trading market, the liquid token won’t be able to provide holders liquidity and also be subject to loss in slippage.)
- Fragmented liquidity of different liquid tokens (given multiple players will issue their own liquid tokens for one POS token, for example, we may see aETH, bETH, cETH etc for staked ETH), the total liquidity of such liquid tokens are separated into different pools, hence reducing the network effect
- Lack of lending market to further incentivize trading activities to find the optimal market price for liquid tokens
Stone as a yield aggregator platform aspires to work with other ecosystem builders to create a highly liquid market for the staked tokens (more than 1 million ETH has been staked and still growing, 2 billion USD worth of DOTs have been staked). In doing so, we will help farming users to enjoy those Rock Solid Yield without having to buy other blockchain tokens and without lockup. For the stakers of POS tokens, it brings them extra liquidity from the staked tokens and an option to exit the staking instantly.
What Stone will bring to the DeFi and POS ecosystem:
- An open DeFi platform agnostic to liquid staking providers, making it composable to other DeFi players, and potentially consolidate liquidity from all parties
- Unique yield farming strategy to help create a highly liquid staking token liquidity pool on DEX and gain transaction fee
- Unique yield farming strategy to help create a vibrant lending market of liquid staking tokens on lending protocols and gain interest
- A security deposit system to cover the slashing and security risks of different staking providers
- Create Indexes to combine liquidity of fragmented liquid staking systems
- Enable other protocols to create derivatives based on these assets on Stone (such as interest swaps and CDS)
Starting with ETH 2.0, let’s build the Liquid Staking Yield Farming market together
What we are describing here is a new type of yield generating assets and new types of strategies on DeFi. It is a “blue ocean” to grow the yield farming space exponentially. Stone calls for all stakeholders in the ecosystem to work together on this exciting opportunity
If you are an Ethereum supporter, who have or plan to stake ETH for Ethereum 2.0, please follow Stone on the latest strategies on how to create yield for your staked ETH.
Join our community to let us know how we can create additional yield and bring a peace of mind to you
Ethereum staking providers
Stone can design strategies to make yield for the liquid staking tokens issued by staking providers. By working together, we can jointly ensure the security of the staked ETH. Build a standard to let various staked ETH as liquid as one.
WIth the new type of assets emerging, let’s build a large liquidity pool for these tokens on DEXs. Just like how we grow the stablecoin trading space successfully for anyone to get access to stablecoins.
Stone and lending protocols can work together to create a lender/ borrower market for liquid staked ETH and in the future other staked PoS tokens.
Staked tokens (similar to an interest-bearing bond) provide a great opportunity to build yield derivative products for users with different risk appetite and reward expectations.