StakeEasy Mechanics #1: seJUNO and bJUNO, what’s the difference?
Staking derivatives
StakeEasy went live on Juno mainnet today. In this article, we’ll go through all the new features and how the staking derivative tokens seJUNO and bJUNO work.
StakeEasy is a liquid staking protocol and such protocols have one or more staking derivative tokens. Staking derivatives are essentially a representation of the amount of assets staked by the protocol’s user. This staking derivative has a particular way of distributing staking rewards to the end-user and hence differs in terms of mechanics. Three of the most popular models are briefly expalined below:
- Rebasing token: This type of token increases in the number of tokens in a user’s wallet as staking rewards are accrued.
- Increasing-peg token: This type of token increases in the amount of unstaked assets it can be redeemed for as the staking rewards are accrued, with additional auto-compounding of rewards. seJUNO is one such token.
- Manual reward token: This type of token is always pegged 1:1 to the unstaked token. Users who holds this token can manually claim their staking rewards anytime. bJUNO is one such token.
StakeEasy derivatives
The staking derivative model that StakeEasy employs for JUNO staking is a combination of an increasing-peg token (seJUNO) and a manual reward token (bJUNO) which brings the best of both worlds to the user. Users can choose to keep their staked JUNO as seJUNO or bJUNO and can choose to convert amongst each other instantly at any moment without ANY fee (no AMM required, hence no slippage).
The benefit of having two kinds of staking derivatives is that it gives users the freedom to choose the one that suits their use-case the best. Both seJUNO and bJUNO have their pros and cons when applied to certain use cases, a few of which are explained below:
- Liquid stake JUNO, auto-compounding rewards: If you only want to stake JUNO and have your staking rewards compounded automatically, you can stake for seJUNO and keep it in your wallet.
- Provide swap liquidity while getting staking rewards: If you want to provide liquidity to swap pairs while staking some of the JUNO, you can stake for seJUNO and provide liquidity to seJUNO/JUNO and seJUNO/CW20_TOKEN pairs to get additional farming rewards along with staking rewards and trading fees.
- Provide swap liquidity without impermanent loss: If you want to provide liquidity to a pair which does not have animpermanent loss, then you can provide to the bJUNO/JUNO pair, but you’ll not get staking rewards from bJUNO if added to the LP pair. You can get staking rewards while added to the seJUNO/JUNO pair, but there may be a small impermanent loss in the long term.
- Use liquid staked token to borrow: If you want to stake JUNO and borrow a certain asset against the staked JUNO, you can do so by staking for seJUNO and using it to borrow assets.
- Provide swap liquidity while getting staking rewards without impermanent loss: If you want to get auto-compounded staking rewards, LP rewards and don’t want to have any impermanent loss, then you’ll have to wait for some time as this is not yet possible with ANY liquid staking solution and the StakeEasy team is currently developing one such solution for bJUNO, which will be launched later this year.
This kind of liquid staking model will greatly benefit the Juno ecosystem as the user holding JUNO will get the staking rewards, participate in DeFi and vote for network on-chain proposals (coming later this year) while still having the ability to get unstaked JUNO immediately.
The StakeEasy team will iteratively integrate with different protocols in the Juno ecosystem to provide users with more use cases for their staked JUNO.
Want to get a hands-on experience of liquid staking? Go to https://juno.stakeeasy.finance and see for yourself.
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Website: https://stakeeasy.finance
