Stone Index on Substrate — Liquid Staked DOT

4 min readOct 19, 2021

StoneDeFi — Web3 Foundation Grant Project.

In this article we provide an overview on the development of the long awaited Stone Index open-source project for Polkadot Substrate with an emphasis on the first phase, liquid staked DOT.

Overview

Stone team has proposed the STONE INDEX project which aims to track the portfolio of multiple digital assets across different blockchains, the index is designed to mimic the composition and performance of selected digital assets, particularly we are focusing on yield bearing assets (such as liquid staked tokens). As far as our knowledge goes, this is the first index on the Polkadot ecosystem, and yield bearing assets is a new asset type that creates stable rewards for holders.

Stone has the vision of building the index defined by yields and expanding the horizon to index derivatives which further add to the asset offering of the Polkadot ecosystem.

Goals

The Stone team’s vision is to bring solid yield to token holders, while index is a favorite investment option to normal users. There are some great index implementations in the Ethereum ecosystem, e.g. Tokensets, Balancer Exchange etc., and the Stone team sees a good opportunity to bring such an efficient crypto asset management instrument into the exciting Polkadot ecosystem.

The index is built on Substrate to join the coming Polkadot parachain ecosystem to increase the range of cross-chain assets to bridge staked assets from other chains to Polkadot.

Solution

Polkadot’s cross-chain protocol makes it the perfect blockchain to build an index of multiple crypto assets. We do see an exponential uptrend of DeFi on the Polkadot ecosystem. Such indexes can be used in lending protocols and DEXs for users and traders to build future markets.

Project Outline

Stone Index is a decentralized instrument running on the Stone platform (https://stonedefi.io), the Stone platform is a yield maximisation protocol and asset aggregation platform of multiple strategies including Ethereum(both 1.0 and 2.0), Polkadot, Polygon and so on, Stone Index will be the latest strategy to be added into Stone platform and open to all Stone users.

The project will be broken down into multiple phases and we’ll focus on the first phase, which is dedicated to liquid staked DOT, e.g. aDOT, bDOT etc. from various providers, to create iDOT, which combines the total liquidity of the fragmented markets.

High level architecture

There are 3 high level components for Stone Index:

Stone platform on Substrate(UI/UX and indexed basket management), including WebUI and a set of Substrate pallets
One or more parachain on Polkadot for providing liquidity of staking tokens, e.g. aDOT, bDOT
One parachain based DEX on Polkadot for Polkadot’s interoperability

Milestone 1 — Liquid staked DOT token

In the grant program, the Stone Team aims to provide liquidity of staked tokens on Polkadot ecosystem, and the special LP token which bounds to staked assets, like DOT token. We are aware that there are multiple teams are actively working on Polkadot ecosystem and more exciting projects on the roadmap, we’ll focus on DOT-bound staked assets like aDOT first for the milestone 1 We’ll also provide an easy-to-use web based UI that connects to the chrome based DOT wallet, and user can buy/sell the index using their DOT tokens easily, this UI will be part of https://stonedefi.io