dForce Staking Asset Pool
dForce plans to introduce an innovative market to address the un-tapped market opportunity of liquid staking tokens, which equates to roughly about half trillion dollars in market size.
dForce is the first lending protocol supporting Staking Yield Token with a dedicated pool, enabling holders of PoS staking tokens to:
1) receive staking yields ranging currently from 5% ~ 15% APY;
2) access 24/7 transferable underlying tokens without compromising yields on the staked assets;
3) participate in DeFi lending activities to harvest top-up yields and borrow at attractive rates;
4) capture upside potential of staked assets.
How will This Rock the World of DeFi?
According to The State of Staking Q2 Report by Staking Rewards, market capitalization of staked assets amounted to $450 billion, representing a 151% Q/Q growth and accounting for 20% of total market capitalization of crypto. This is a new asset class which is approximately 8x of total value locked in DeFi and a huge untapped opportunity for DeFi protocols.
Staking rewards on top PoS assets ranges from 5% ~ 15% per annum currently, with a projected of $18.9 billion annual staking rewards in 2021.
By tokenizing staking assets on PoS blockchains and introducing them to DeFi, it creates a new liquid staking market, where stakers are able to enjoy 7/24 liquidity with their staked tokens without compromising on staking yield, participate in lending activities and take out loans against their staked tokens for optimized capital efficiency.
The Beauty of Staking Assets
Staking refers to ‘locking up’ PoS assets in exchange for a share of inflationary rewards distributed to all stakers (aka staking rewards) in a PoS network. However, in order to participate in the network and receive staking rewards, token holders are often required to lock up their tokens for a certain period. This is referred to as a “bonding period”, during which you can’t withdraw or transfer your tokens.
Introducing the First Dedicated Lending Market for Staking Yield Tokens
At dForce, they plan to support Staking Yield Tokens through a dedicated pool. This is the first pool-based lending market dedicated to Staking Yield Tokens and corresponding underlying tokens.
Staking Yield Tokens are tokens representing staked PoS assets (i.e., stETH, rETH, rDOT, rATOM, sFil, etc), which accrue in value with staking yield coming from the underlying staked tokens (i.e., ETH, DOT, ATOM, FIL, etc).
On dForce Staking Asset Pool, users are able to:
1) deposit Staking Yield Tokens as collaterals to borrow underlying tokens (i.e., deposit stETH to borrow ETH). You can use the borrowed underlying tokens for leveraged staking (by converting it into Staking Yield Tokens then depositing them back as collaterals to harvest higher staking yields) or trade for instant liquidity of underlying tokens during the bonding period.
2) use Staking Yield Tokens as collateral to mint USX and EUX (dForce stablecoins pegged to USD and EUR). You can then use them to borrow out other assets.
3) holders of underlying tokens (i.e., ETH, DOT, ATOM, FIL, etc) are able to achieve a higher savings yield by lending underlying tokens to Staking Yield Token holders (for leverage staking and loans).
What is dForce?
dForce is an integrated and interoperable platform of opening finance protocols, building a full stack DeFi protocols and creating an interconnected, interdependent protocol ecosystem.
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