StaFi Liquidity Mining Program: A case study of the automated r-pool Application
Staking Finance (StaFi) is the first decentralized finance (DeFi) protocol to solve the contradiction between Mainnet security and token liquidity by unlocking the liquidity of staked assets.
StaFi solves this problem by issuing alternative tokens, popularly known as rTokens, on a 1:1 basis for staked assets on a proof of stake network. These alternative tokens can be borrowed, lent, or traded while the staker enjoys rewards from the original chain.
For a long time, stakers have been bereaved over the disadvantages of using the proof of stake consensus mechanism. The lack of liquidity, loss of asset value due to fluctuation in prices of staked assets, and more. StaFi protocol was built to remedy these problems.
rTokens, which also stands for Reward Tokens, are staking derivatives issued by StaFi for staked assets on a proof of stake network.
One of the fundamental notions that the cryptocurrency industry focuses on is liquidity. The contradiction between Mainnet security and token liquidity is that a coin holder cannot prevent the risk of value fluctuations during the locking period of staked assets.
StaFi issues alternative tokens for staked assets. For example, for each XTZ staked on the Tezoz blockchain through the StaFi’s staking contract, the staker gets rXTZ. This rXTZ can be traded anytime at specified trading venues.
How StaFi works
The StaFi protocol consists of three layers which enables it to work efficiently and effectively. They include:
Bottom Layer: This layer is primarily based on Substrate’s sophisticated infrastructure and enables the integration of development modules like staking, consensus and P2P.
Contract Layer: This layer is responsible for supporting Staking Contracts, such as Staking Contracts for ATOM, XTZ, or DOT. A user who stakes with this staking contract is eligible to receive rTokens.
Application Layer: This layer allows for creating third-party StaFi-based APIs or customized APIs to allow rTokens to circulate, be transferable, and be tradable on the StaFi protocol.
StaFi Liquidity Mining Program
StaFi devised a means to ensure that liquidity is not lacking on several trading venues for rTokens.
StaFi Liquidity mining programs are launched to incentivize rToken users to provide more liquidity.
Liquidity mining is a process whereby users provide liquidity to decentralized financial applications in exchange for rewards. Liquidity mining in the context of StaFi refers to users (Liquidity Providers) contributing two assets to a specific trading pair market for the protocol to execute trades.
For example, a liquidity mining program was launched by StaFi recently to encourage the provision of liquidity for rToken pairs on StaFi’s Automated Market Maker (AMM) Decentralized Exchange (rDEX).
The StaFi team allocated a total of 5 Million FIS as the total reward pool for the rDEX Liquidity Mining Program. Users are expected to deposit rFIS to provide liquidity for rFIS/FIS pairs, and they earn trading fees in return.
StaFi’s Liquidity Mining Programs have been helping to provide liquidity for certain rToken pairs, and it is powered by the rPool application.
The StaFi rPool is an automated page on the rToken application created for the housing of liquidity pools. You will find all available liquidity pools that you can participate in with your rTokens and get additional interest.
Guide for rPool
Add liquidity for rETH/ETH on Curve
1. Stake ETH
2. Get rETH
4. Get rETH/ETH LP Token
1. Stake FIS
2. Get rFIS
5. Get rFIS/ETH LP Token.
Above are just a few guides on how to deposit and provide Liquidity on available liquidity pools on the rPool page and earn rewards. You can view the rest of the guide here.
Liquidity Mining Programs initiated by the StaFi Protocol can also be found on the rPool page. It is easy to navigate and understand. Once there is an ongoing Liquidity Mining Program, the rPool application is automated and will enable you to experience seamless participation.
The rPool feature is just one of the numerous fascinating features of the StaFi protocol. The rPool page serves its purpose to the fullest measure when it comes to earning additional rewards.
Liquidity mining programs are essential for attracting users to a particular project, and the StaFi protocol ensures users are well rewarded for providing liquidity.
The StaFi protocol will continue to establish means for adopting and expanding rTokens, and we expect to witness more Liquidity mining programs.
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