Liquid Staking has been a novel innovation in the field of DeFi. Billions of dollars have been staked across many Proof of Stake (PoS) chains and this capital was blocked to be used across DeFi, which can now be unlocked thanks to Liquid Staking.
Liquid staking presents a major value-add for the cosmos ecosystem, encouraging users to participate in DeFi with their liquid-staked token while continuing to reap traditional liquid staking rewards from on-chain staking.
This article will discuss how you can boost your yield through liquid staking using StakeEasy. Let’s start with understanding few terms first.
Staking
In simple terms, staking is one strategy that can generate a passive income. You simply deposit coins for a fixed period of time to earn interest. The reward you earn from staking depends on the duration of investing the asset.
The term staking refers to the Proof of Stake or “PoS” protocol, in which deposited coins are used to verify transactions on the blockchain. Verified transactions become new blocks on the blockchain. For cryptocurrencies that support staking, proof of stake is necessary for that process.
Crypto staking is nothing but “locking up” a portion of your cryptocurrency for a period of time as a way of contributing to a blockchain network. In exchange, stakers can earn rewards, typically in the form of additional coins or tokens.
Decentralized Finance
Also known as DeFi is a term for financial services like borrowing, lending, and trading built using decentralized infrastructure like smart contracts. Unlike Centralized financing system, DeFi vanishes the middle intermediary bodies( like banks, brokers etc) which helps in increasing the efficiency in any transaction.
By using decentralized technology, which you can think of as self-executing contracts made of computer code, DeFi allows for the elimination of middlemen.
- Imagine instantaneous loans without the need of bank approval or paperwork.
- Imagine earning real interest on your assets, instead of suffering from low, no, or even negative interest rates.
- Imagine being able to issue stock for your company without having to deal with bankers and lawyers who charge high fees.
Though staked capital is accruing interest but Staked capital limits the access to liquidity in the DeFi ecosystem. Now here comes the role of LIQUID STAKING.
Liquid Staking, as the name suggests, fixes the root of this problem.
So, how Liquid Staking actually improves DeFi?
With liquid staking, your tokens retain their liquidity despite being staked. It accomplishes this by tokenizing your stake — you get a derivative token for each staked token. If you want out, just trade your derivative token back for the original token. In DeFi, liquidity is king and this approach has a number of benefits:
- Users can unstake instantly for a nominal fee, which is not possible when staking directly with validators. This makes proof-of-stake assets more liquid, giving users more financial flexibility.
- This makes staking more attractive, which contributes to decentralization and security of the blockchain in question.
- The staking derivatives allow greater composability and can be used as collateral in other DeFi applications to earn additional yield.
As with anything in DeFi, there are also cons:
- You have to face a complex mechanism because of the additional tokens. Users may get confused due to this. Every protocol works on this to make it simple, quick for users at their level.
StakeEasy provides better user experience by minimising the complexities and create a liquid staking platform simple , easy to understand with few clicks for the users.
StakeEasy
StakeEasy is an IBC enabled liquid staking protocol for Juno Network and Secret network.
StakeEasy allow users to stake their JUNO and SCRT and participate in governance while unlocking a new derivative token which can be used in other DeFi opportunities. StakeEasy doesn’t just provide a convenient way for JUNO and SCRT owners to continue using their assets while in lock-up but also offers the ability for more returns through an easier method than just staking.
StakeEasy’s Liquid token can be placed into liquidity pools with correlated assets that provide a reliable return or can be used as collateral on lending protocols to borrow other assets or stable coins.
- Staking your SCRT using StakeEasy unlocks a liquid token seSCRT and can be used on Sienna Network to provide liquidity or can be used as a collateral. All this while enjoying staking rewards.
To know more read: https://stakeeasy.medium.com/stakeeasy-sienna-networks-integration-58be7f3effee
- Those who stake their JUNO with StakeEasy will be getting higher staking returns. In addition to that, staking JUNO will unlock a new token (Liquid token) seJUNO or bJUNO which has different qualities and usage and accordingly can be used in various DeFi opportunities as well and earn extra yield.
- seJUNO is available on Juno Swap: https://stakeeasy.medium.com/stakeeasy-integrates-with-junoswap-146a764c4336
- seJUNO and bJUNO is also availabe on Loop Finance to provide liquidity: https://stakeeasy.medium.com/sejuno-juno-bjuno-juno-liquidity-pairs-live-on-loop-finance-eba5420975fe
StakeEasy fulfils today’s need for innovation within DeFi to facilitate better opportunities. Liquid staking with StakeEasy serves as a valuable tool, without having to unstake your assets, users can take advantage of various financial applications, improving capital efficiency without compromising network security.
With more DeFi Features to be unlocked soon with StakeEasy
By giving users an easier option through which to stake, it’s not only increasing adoption but helping to strengthen blockchain networks overall.
Want to get a hands-on experience of liquid staking? Go to https://juno.stakeeasy.finance for JUNO
https://app.stakeeasy.finance/ for SCRT and see for yourself.
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