How StaFiHub is Assisting the Expansion of rTokens to the Cosmos ECO Network
Before the creation of StaFi, the proof-of-stake consensus mechanism continued to be met with an inevitable drawback in terms of staked assets. Stakers could not be able to access their fund until the expiry date of the locked tokens, depending on the network. This led to grumblings as fluctuations in the market, and the urgent need for money have disappointed users of this protocol.
StaFi came to the rescue with a protocol that solves this problem and enhances benefits.
StaFi, short for Staking Finance, is the first decentralized protocol that solves the problem between Mainnet Security and token liquidity. StaFi solves this dilemma by unlocking the liquidity of staked assets by offering staking derivates.
StaFi issues alternative tokens popularly called rTokens for staked assets. These tokens are issued on a 1:1 basis of the native tokens staked in the relevant staking contract and can be traded, lent, or borrowed at centralized or decentralized exchanges where it is listed, while the user still enjoys rewards from the stakes on the original chain.
rToken serves as the key cog in the wheel of the StaFi ecosystem. It is what attracts users to the project, and therefore it is constantly monitored and improved.
Features of rToken
● There is no need to worry about the liquidity of staked native assets as rToken will serve as a replacement.
● Stakers no longer need to wait for the lengthy redemption period of PoS projects. They can now quickly exchange at the market’s current rToken/Token exchange rates.
● The StaFi Staking Contract Pool will automatically capture Original Validators with the highest rate of return on the chain for Staking, optimizing users’ staking yield.
● With rToken, there would be more willingness for users to adopt the PoS consensus mechanism. This will increase the staking ratio of PoS projects.
There is no doubt that the rToken idea is unique and will solve major problems facing PoS network users. However, there appear to be some limitations for users like lack of liquidity, ridiculous slippages, cross-chain barriers, etc. The StaFi team has proven to be up and doing as they have provided adequate solutions to these problems. First, they created a solution in rDEX, an Automated Market Maker (AMM) decentralized exchange that will enable a seamless experience for rToken users, but it didn’t just end there. StaFi has created StaFiHub, a new set of Staking Derivative solutions that will help expand the rToken ecosystem.
StaFiHub is a parallel chain of the StaFi ecosystem that will be based on the Cosmos SDK in order to serve the Staking Derivatives of the Cosmos ECO and expand the use cases of rToken.
The StaFi protocol consists of three crucial layers to the project’s development. They include bottom, contract, and application layers. The bottom layer is primarily based on Substrate’s blockchain system (a blockchain architecture developed by Parity, with an architecture that integrates many development modules, like the Staking module, consensus module, etc.); the contract layer is responsible for the creation of staking contracts for the issuance of rTokens; lastly is the application layer which enables third-party StaFi-based APIs or customized APIs to be used to create a decentralized bonded asset trading market where rTokens can circulate, transfer, and trade on the StaFi ecosystem.
The application layer is responsible for creating StaFiHub as it deals with third-party solution DApps. The current StaFi protocol isn’t designed to accept third-party liquid staking solution DApps, but this will change with the launch of StaFiHub.
Features of StaFiHub
- The Cosmos SDK will power the StaFi chain function, similar to TerraChain, Osmosis Chain, and Sifchain.
- It will be an application chain that will support the Cosmos Eco Staking Derivatives.
- Support for the IBC cross-chain protocol will be provided. The Cosmos ecosystem’s token assets can be cross-chained to StaFiHub through the IBC protocol, and the StaFiHub’s rToken assets can all circulate in the Cosmos ecosystem through the IBC protocol.
- Cosmos ECO tokens can be used to directly mint StaFiHub-based staking derivatives using the Keplr wallet and the corresponding PoS Token.
Why Cosmos ECO?
The Cosmos ecosystem appears to be growing rapidly. It is estimated that over 40 vertical public chains are based on the Cosmos SDK, and they are all flourishing. The StaFi team hopes to keep pace with the growing number of staking derivatives on the Cosmos ecosystem through StaFiHub as they continue to expand the rToken initiative.
That’s not the only reason why StaFi is expanding to the Cosmos ECO. StaFiHub will make it possible for rToken users to easily obtain and trade staking derivatives of the Cosmos ECO, like rATOM and rLUNA, which has proven to be a problem until now.
Before StaFiHub, to mint, trade, and redeem rTokens on the Cosmos ECO, users must pass through the following rigorous processes:
● Mint: Users must first hold Native FIS before staking and then mint rATOM on the StaFi chain.
● Trade: rATOM must cross-chain to Ethereum for ERC-20 rATOM, which must then cross-chain to Sifchain through the Ethereum>Sifchain Bridge before it can be used in liquidity mining or transactions on the Sifichain
● Redeem: rATOM cannot be redeemed directly on Sifchain. Before redemption, users must cross-chain from Sifchain to Ethereum and then from Ethereum to StaFi chain.
The above procedures are stressful and costly, enough to make any user uninterested and disappointed. With StaFiHub, rToken users can easily mint, trade, and redeem staking derivates of the Cosmos ECO.
The success record of Cosmos SDK is sure to yield maximum benefits for the StaFi project. There are already interested users of rTokens on the Cosmos ECO, and StaFiHub will further cement their interest and onboard more users.
StaFiHub will not operate in isolation. The cross-chain bridge keeps it connected to the parent chain. This means that assets such as FIS can be easily transferred from the StaFi native chain to StaFiHub.
On StaFiHub, POA validators for the network are selected through a process devised by the StaFi Foundation. This contrasts with the StaFi Chain, where validators are selected based on the amount of stake. This is done to ensure that the network’s security and efficiency meet the necessary standards.
StaFiHub is another example of how dedicated the StaFi team is to ensuring the community achieves the most memorable experience.
StaFiHub is a step in the right direction, and its growth will undoubtedly lead to more users adopting the liquid staking solutions of StaFi Foundation, and there is still enough room for improvement.
If you seek to access a wide range of rToken use cases with immense benefits, StaFiHub is recommended.
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