rSOL: The Solution to Staking Liquidity Problem for the Solana Community
Many times, the primary reason for going to the market is to buy and sell. The extent to which a specific item is bought or sold in the market without altering the market price is regarded as liquidity. However, in the context of cryptocurrencies, liquidity refers to a coin’s capacity to be converted into cash or another cryptocurrency.
With a huge number of buyers and sellers in a liquid market, prices are fairer, and an equilibrium price is established to assure price stability. However, most Proof of Stake (PoS) projects are still faced with liquidity problems which impact the price of tokens thus making it complicated for the public to partake in the staking process.
Ever since its inception, StaFi’s primary goal has remained to offer liquidity for all PoS projects, thereby ensuring the staking process is more convenient and flexible. The firm has continued to solve liquidity problems and has published seven rToken solutions, including rETH, rBNB, rFIS, rDOT, rKSM, rATOM, rMATIC, and recently rSOL (to address the solana community staking liquidity issue).
rSOL is a decentralized DeFi solution developed by StaFi that addresses the liquidity issue with staked SOL on the Solana mainnet.
StaFi issues the rSOL token as a synthetic staking derivative when users stake SOL through the StaFi rSOL App. The staked SOL assets and the related staking rewards are tied to the rSOL tokens. At any time, rSOL tokens can be transferred and traded.
The rSOL App assist SOL stakeholders with solutions to two primary issues:
● Elimination of the three days waiting period. Prior to the release of rSOL, staking on Solana requires that users will have to wait days for their stake to be confirmed and released. However, now, there is no need for the three days ultimatum. To free up liquidity and hedge price risks, rSOL App users can transfer and swap rSOL assets at any time.
● Complex Consensus. Unlike before, to optimize staking benefits, you no longer need to learn the sophisticated Tower BFT consensus method or staking reward calculation rules. Users can deposit SOL into the rSOL contract in only a few steps with the rSOL App, and the profit maximization mechanism will automatically identify the optimal validator to delegate.
To determine the exchange rate, StaFi calculates the amount of rSOL to issue to a user when they deposit SOL into the rSOL contract based on the current exchange rate between SOL and rSOL. StaFi will determine the amount of redeemable SOL based on the real-time staking reward of SOL when a user owns rSOL.
With an increase in staking income, the rSOL exchange rate Ci rises. The total amount of SOL locked in the staking contract Qstk, the total number of redeemed SOL Qred, the number of staking rewards Qrew, the number of slashes Qslh, the commission rate Rcom, the total number of rSOL issued M, and the total number of burnt rSOL N are the factors that decide it.
The rSOL Secondary Market Circulation
Aside from the benefits of participating seamlessly on the staking process, another incredible thing StaFi have in stock for rSOL holders is creating elaborate, multi-level circulation scenarios that span multiple chains. For instance:
● When the rSOL App is released, rBridge will enable the rSOL two-way cross-chain bridge function from the StaFi chain to Ethereum, allowing users to access DeFi applications on the Ethereum blockchain via the rBridge App.
● Also, StaFi intends to publish rSOL tokens on Solana chain DEXes such as Saber and Serum, as well as to conduct liquidity mining incentive campaigns to assure the pairs’ liquidity.
● Through cross-chain bridge services, StaFi not only allow the circulation of rSOL in the Solana ecosystem but also enable rSOL’s participation in the DeFi protocol of the Ethereum/Polkadot/BSC chain.
StaFi Protocol
StaFi is the first DeFi system that is concerned with unlocking liquidity of staked assets. StaFi allows users to stake PoS tokens and obtain rTokens in exchange, which may be traded while still receiving staking rewards from the original chain. When users stake PoS tokens through the StaFi rToken App, StaFi issues rToken, a synthetic staking derivative. Users’ staked PoS tokens and the related staking incentives are used to anchor rTokens. At any time, rTokens can be transferred and traded.
Solana
Solana is a large-scale blockchain that provides fast, secure and scalable services to the crypto ecosystem. It’s an open-source project managed by the Geneva-based Solana Foundation and developed by Solana Labs in San Francisco. Solana competes with Ethereum, the world’s most popular decentralized app platform, by offering faster transaction times and lower transaction fees. It’s a Proof of Stake (PoS) blockchain, which means it’s less harmful to the environment than PoW (proof of work) blockchains like Bitcoin. Solana’s native crypto currency is SOL.
Conclusion
The desire to improve the Blockchain system is intensifying daily with the StaFi protocol. To improve the quality of service and motivate stakers in depositing their assets into the PoS system to earn a reward is of great benefit to all stakers and prospective investors of the Solana community. The introduction of rSOL has made staking flexibility easier, which gives community members, stakers, and rSOL holders fair access to the staking process.
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