Deployment of rDex V1 on the StaFi Chain: Why Users need to pay FIS as a gas fee to use rDex V1

Staking Finance (StaFi) is a decentralized finance protocol with the aim of solving the dilemma facing Mainnet security and token liquidity. StaFi solves this problem by unlocking the liquidity of staked assets.

In the initial stages of the Proof-of-Stake consensus protocol, users were enjoying staking rewards until the disadvantages dawned on them. These disadvantages include low token liquidity and fluctuations in staked asset prices.

The StaFi protocol was created to improve these drawbacks facing the proof-of-stake mechanism. Their protocol makes it possible to participate fully and fearlessly in the proof-of-stake consensus mechanism by issuing redeemable tokens for staked assets and then providing a market for these tokens.

rToken

rToken is the masterpiece of StaFi’s game plan. It is a token issued on a 1:1 basis of assets staked on a proof-of-stake network. A unique aspect of this rToken idea is that it can be traded whilst simultaneously earning staking rewards from the original chain.

The rToken initiative proved to be a significant improvement, and it attracted more users to staking platforms while also retaining those that harbored intentions of stopping. However, as time went by, there were issues discovered to be hampering the adoption of this initiative. These issues include lack of liquidity for the tokens on specified markets, slippage, cross-chain transactions, etc. These led to the creation of rDEX.

rDEX

If you have been an ardent follower of the StaFi protocol, you will know that they have a resilient and experienced team working behind the clock to improve on previous updates released on the platform. The team thought of rDEX as the solution to the significant problems facing rToken users and worked towards releasing it as quickly as possible.

rDEX is a decentralized exchange owned by StaFi that features a unique Automated Market Maker (AMM) model. rDEX makes it possible to trade rToken on the StaFi chain. It is the ultimate remedy to the liquidity issues facing rToken users as it allows for transactions on the StaFi chain without having to worry about cross-chain impediments.

Decentralized Exchanges (DEX) make peer-to-peer transactions more efficient and secure than centralized exchanges or traditional financial institutions. They use automated algorithms to promote transactions between users, but rDEX is utilizing more unique features to help better the experience of DEX users.

Features of rDEX

● It provides low slippage for small and medium-sized transactions. In the case of high transactions, the liquidity available helps decide.

● On rDEX, FIS, the native token of the StaFi protocol, is used as the primary trading asset for all rTokens trading pairs and for liquidity provision, which helps network security.

● Unlike other exchanges, rDEX allows you to provide liquidity by depositing more than 1 or 2 tokens asymmetrically.

● Protection from impermanent loss for long-term liquidity providers.

Overview of the Liquidity Pool Model

Thorchain’s Continuous Liquidity Pools (CLP) model was adopted in the building of StaFi rDEX V1. This has helped in actualizing certain unique features on rDEX as follows:

Slippage Protection: Slippage is reduced when the user’s transaction scale is small compared to the pool liquidity scale. On the other hand, if the transaction scale is larger than the pool’s liquidity scale, transaction slippage will be increased. With this, major asset holders will be unable to drain rToken’s liquidity.

FIS Utility: FIS is considered the fundamental transaction asset on rDEX. With FIS, each pool can create significant liquidity. FIS can also be used to facilitate the exchange of rToken assets with Native tokens or between rToken assets.

Support single asset or dual assets deposit ratio: On rDEX, users can deposit a single token type or two different token types in any ratio to support liquidity. Users don’t have to deposit two assets simultaneously at a 50% — 50% ratio as other DEXes require.

Why users need to pay FIS as a gas fee to use rDex V1

FIS is the utility token of the StaFi protocol. It is used to safeguard the StaFi ecosystem by staking and can also be used to cover the protocol’s transaction fees, mint rTokens, and today, its usage is further extended to powering rDEX.

The following aspects of rDEX V1 will significantly improve the utility of FIS:

• In rDEX V1, the primary transaction assets of rToken are all FIS, which will become a decisive factor for promoting rToken liquidity.
• Users must pay FIS as a gas fee when using rDEX V1 because it is directly deployed on the StaFi chain.
• FIS will be used to motivate Liquidity Providers through the Impermanent Loss Protection Fund Reserve.
• FIS will be used to incentivize rDEX V1 liquidity mining.
• Community members will vote on the liquidity mining weight of each rToken pool using FIS.
• The Treasury will collect the transaction fee income from rDEX V1 and use it to buy back and burn FIS.

Conclusion

StaFi is proving to be a force to reckon with in the fight to better the experience of stakers. Their solutions to problems facing the staking network have always been top-notch. First rToken, and now rDEX, to enable a seamless experience for rToken users. rDEX also passed through thorough testnet phases before being audited by Peckshield and launched on Mainnet.

There will undoubtedly be more changes and improvements on rDEX, such as the ability to support cross-chain transfers of other native tokens to the StaFi chain and the use of native token/FIS trading pairs on the StaFi chain. In general, they will be expanding their services to other networks and blockchains.

In the bid to further assure users and protect their funds and interests, StaFi has established an Insurance Fund for rDEX, which will serve as an effective measure to protect and provide added security for users of rDEX against any future or unforeseen hacker attacks that were not discovered or avoided during the security audit as mentioned above. A total of 5 million FIS have already been added to this Insurance Fund.

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