StaFi is a cross-chain liquid staking protocol. It launched in 2020 & aims to solve the contradiction between mainnet security and token liquidity in PoS consensus.
Users maintain network security by staking, while Stafi Validators (SV) and Stafi Special Validators (SSV) are responsible for the safety of the whole protocol and all Staking Contracts, respectively. In return, stakers will receive rTokens (e.g. rDOT, rATOM, rBNB, rSOL, etc.) in a ratio of 1:1 of the staking tokens as the claim to staked tokens and staking rewards.
rTokens can also be traded in the secondary market or be utilised across other protocols to earn yield. At the same time, SVs are rewarded corresponding to the blocks they produced, and SSVs take profit from the multi-signature service and RPC service.
Transaction fees and liquidity fees are collected by the protocol’s treasury, along with any slash forfeits & staking rewards.
Market Cap: ~$41.74m
1. Fee Accrual:
2. Value Capture: $FIS provides value for the liquidity of rTokens.
3. Supports Staking & Motivation Design:
3. Inflation: To motivate SVs and SSVs, an inflationary supply is designed with an annual rate of between 5%-20%. StaFi Protocol will generate new $FIS (through a process called Coinstake) whenever a new block is produced. The formula is as follows
Staked $FIS is ~37.27 million, which accounts for ~32.43% of issuance.
2. Decentralised Validator Network: Unlike some of the projects following PoS, the chance to produce a block is equal to all validators, and each validator is entitled to equal voting power. That is, validators are equally likely to be elected, and there is no direct relevance between reward distribution and the weight of their stake.
With the rapid growth of liquid staking derivatives, StaFi’s design has earnt it a spot in the top 10. The protocol’s security & decentralised validator network are favourable proponents in the market for LSDs, however, its double-digit inflation rate & concentrated insider holdings have the potential to provide medium-term supply pressure.
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