MixBytes Announced The Launch Of LidoFinance Liquid Staking For Kusama On Moonriver

Published on: 19.02.2022

MixBytes is proud to announce the launch of Lido Liquid Staking for Kusama on Moonriver. We have spent more than 9 months developing this protocol with close cooperation from Lido and Moonriver teams. The goal of our mission was to develop a truly decentralized and non-custodial way to utilize the “frozen” potential of staked Kusama tokens. We are happy to be the first such complex solution to use the XCM cross-chain communication functionality of Kusama and Polkadot. We added a lot of safety features as well such as Ledgers to isolate any slashing events to only a portion of the funds. See more in our tech docs.

All protocol contracts are audited by a separate MixBytes auditing team. See report here. Audit from another firm will be concluded and posted within a couple of weeks.

Overall product values

Lido Liquid staking for Kusama will enable users to

Leverage defi by receiving LP rewards and using their liquid tokens as collateral
Liquidate(sell) their tokens without the delay of the unbonding period
Maximize their staking rewards as Lido protocol will dynamically reallocate stakes to validator nodes with the most profitable
Minimize the risk of slashing events

Launch stages plan

First stage: approximately 1-3 weeks from launch

Parameters

The stake cap for this stage will be applied at 10k KSM or approximately 1.6M USD
Reward oracles will be maintained by the MixBytes dev team
Launch of defi pools with incentives

Best APR to stakers net of validator’s fees
No slashing events
Stable fee rate
Nominations enabled by the node

Second stage: 1-2 months

Parameters

Uncapped stake
Uncapped # of validator nodes
Launch of decentralized reward oracles
Development of a predictive model to increase APR even more

Lido fee structure

Edge cases:

Node fee is 0% then total Lido user APR = Node APR * (1-10%Lido fee)
Node fee is 20% then total Lido user APR = Node APR * (1-20%NodeFee)*(1-10%Lido fee)

Optimized net APR to lido user expected to be > than “uninformed” average staking APR (see simulation)

APR reward simulation

They’ve performed a preliminary simulation of rewards with and without the Lido liquid staking dynamic allocation system. The actual result may vary and will be optimized throughout the life of the protocol.

Simulation parameters

For the Lido staking scenario

Lido protocol fee is 10% of net staker rewards
A stake allocated per node is 1000 KSM (200000 USD)
Overall stake in the Lido protocol is 100000 KSM (20000000 USD)
# Of Validator nodes selected by Lido protocol is 100

For average “uninformed” staking

A stake of 100000 KSM (52200 USD) equal to Lido simulation allocated to all validator nodes in the active set excluding nodes with 100% fee (766 nodes).

Simulation results

100000 KSM total stake:

Lido APR – 18.15%
Uniformed staking APR – 10.63%

10000 KSM total stake (test cap):

Lido APR – 19.69%
Uniformed staking APR – 10.64%

See all nodes performance rated here

Risks of centralization

MixBytes and Lido support efforts to maintain blockchain decentralization efforts. They are actively following the proposal about setting the minimal validator fee and designing the system in a way that does not take into account KYC information, size of the validator operation – only the actual optimization and performance of the validator node which is utilizing high-performance nodes even with fees as high as 10% (see the simulation results).

About MixBytes

MixBytes is a team of engineers, auditors and analysts, experienced in decentralized systems and blockchain technology. We design and implement customized solutions based on well-known blockchains and frameworks: Ethereum\Polkadot\EOS

About Lido

Lido is a liquid staking solution for ETH 2.0 backed by a number of the industries leading blockchain staking providers. Lido allows users to stake any amount of ETH without the need to maintain complex infrastructure, while letting users unstake at any time through secondary markets.

Source:
https://mixbytes.io/mixbytes-launches-lido-liquid-staking-kusama-moonriver

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