Decentralized “Deposits” (Staking)

Module 2.1: Decentralized “Deposits” (Staking)

Aqua Protocol (Stablecoin on TON)


This article offers an overview of staking in the DeFi world, focusing on the concept of Liquid Staking (LSDFi) and its significance for investors. It explains what staking is, how it works using Ethereum and the TON blockchain as examples, and discusses the trends and benefits of liquid staking. The article also mentions protocols that support liquid staking and the new trend of restaking, which involves the reuse of staked assets for additional financial operations within DeFi.

What is Staking?

Staking plays a pivotal role in the DeFi world, allowing participants not only to contribute to the security and stability of Proof of Stake (PoS) networks but also to earn passive income. This is the process of “locking up” crypto assets for a certain period to support the operation of a blockchain, in return for rewards in the form of additional tokens or a share of the network fees.

Staking transforms your cryptocurrency assets into a source of passive income, actively contributing to the security and transaction verification on the blockchain. Your stake helps maintain the network, and in return, you receive additional tokens. Ethereum, for example, offers various staking paths, allowing you to earn while you contribute to the security of the Ethereum network. If you own 32 Ether, you can become a validator, participating in crucial network processes. If setting up the hardware seems daunting, you can utilize platforms that take this process off your hands. For those with less than 32 Ether, there’s the option of pooling funds with other users for collective staking. There’s also the interesting option of “liquid” staking, which provides you with tokens representing your staked Ether while maintaining the liquidity of your funds. And don’t forget about centralized exchanges, where you can also stake Ether, offering convenient and straightforward options for doing so.

Liquid Staking: What Is It?

Liquid staking addresses the problem of traditional staking, where locked assets can’t be used in other investments. It allows you to receive special tokens representing your staked assets while maintaining their liquidity. These tokens can be used in other DeFi projects, allowing you to earn additional income.

Examples on Ethereum and TON

On Ethereum, an example of liquid staking is Lido, where you can stake ETH and receive stETH, which can be freely traded. In TON, similar opportunities are offered by Bemo Finance, Tonstakers, Hipo Finance, Stakee, facilitating TON staking.

Trends in Liquid Staking (LSDFI)

Trends in LSDFi reflect the market’s drive towards increasing the efficiency and accessibility of cryptocurrency assets. Incorporating liquid staking into various DeFi protocols opens new opportunities for users to generate income and participate in securing networks.

Benefits of LSDFi

The main advantage of LSDFi lies in increasing the liquidity and flexibility of managing staked assets. Users not only continue to receive rewards for staking participation but can also use derivative tokens in other investment strategies within the DeFi ecosystem. This creates additional opportunities for portfolio diversification and increasing the overall return on investments.

Protocols and Restaking

In the context of LSDFi, various DeFi protocols are developed and adapted to accept staked tokens, increasing the liquidity and availability of these assets for a variety of financial operations. This allows users not only to earn from staking but also to engage in other activities, such as lending and borrowing, multiplying their potential returns.

Examples of such protocols include Lybra Finance, Gravita Protocol, CurveUSD (on Ethereum), and Aqua Protocol (on the TON blockchain), each offering unique mechanisms for interacting with staked assets and creating stablecoins.

What is Restaking?

Restaking, the official trend of 2024, represents the process of reusing staked assets, for example, ETH, in other financial operations within the DeFi ecosystem. This is achieved through special platforms, such as EigenLayer, which allow for the creation of wrapped tokens based on staked assets. These tokens can be used for participation in additional staking operations or other financial actions, thereby increasing the profitability and flexibility of asset management.

Restaking amplifies the benefits of liquid staking, providing users with even more ways to utilize their cryptocurrency assets within the rapidly evolving world of DeFi.

This course was prepared by Julia Palamarchuk (co-founder of Aqua Protocol — the first CDP stablecoin on the TON blockchain, over-collateralized by liquid staking tokens).

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Aqua Protocol (Stablecoin on TON)

AquaUSD is the first TON-native decentralised over-collaterized interest-bearing stablecoin backed by liquid-staked assets