StaFi Protocol and the development of a pre-eminent ecosystem for its staking derivatives

Helen Imah
4 min readApr 20, 2022

Proof-of-stake consensus mechanism has proven to be a reliable and preferable means of earning extra cryptocurrencies for many. It was published as an alternative to the resource extensive proof-of-work mechanism, and it has since lived up to its billing.

Proof-of-stake is a consensus mechanism that is used to verify cryptocurrency transactions. It requires a particular user to lock up their coins in a smart contract before they are allowed to participate in the governance of the particular network.

In the proof-of-stake mechanism, the higher your stake, the more likely you are to be selected as a validator.

Several proof-of-stake networks have emerged and offer staking derivatives of various sorts, but one stands out; Staking Finance (StaFi).

Staking Finance (StaFi)

StaFi is the first decentralized finance (DeFi) protocol that solves the dilemma between token liquidity and mainnet security by unlocking the liquidity of staked assets. The StaFi platform allows proof-of-stake users to stake their tokens and get liquid tokens in return. These liquid tokens can be traded at will while the user still enjoys rewards from stakes in the original chain.

Reward Token (rToken) is the core element StaFi uses to power its aim of becoming one of the best proof-of-stake networks.


rTokens, short for reward tokens, are alternative tokens issued to stakers for their stakes on a particular proof of stake network. These tokens are issued on a 1:1 basis and can be traded, lent, or borrowed at specified markets.

rToken was created to remedy the asset-locking issue of various proof of stake networks. Usually, a user is expected to lock up their coins for a specified period in order to be recognized as a trusted member of the network and allowed to validate transactions. However safe it might sound, this locking process comes with its disadvantages. The volatility of crypto and emergency fund requirements are some of the problems which have made users of the proof of stake network bemoan its nature. However, StaFi came to the rescue with this unique idea of offering liquid tokens for staked assets. With this, the proof of stake network users can hedge against volatility and maximize their profits.

To further expand its platform, the StaFi project has continued to establish major components and partnerships that will support and improve the rTokens initiative. The most recent being rDEX and StaFiHub, both expected to promote StaFi to more ears and eyes than ever before.


rDEX is a unique Automated Market Maker (AMM) decentralized exchange built by StaFi, making it possible to trade rTokens on the StaFi chain. Initially, rToken users have, until now, dealt with liquidity and cross-chain difficulties, but rDEX enables a more seamless experience.

Key Features of rDEX include:

● A unique AMM CLP market maker model that enables low slippage for small and medium-sized transactions. The amount of liquidity available decides the slippage for big-sized transactions.

● The native token $FIS will be the primary trading asset for all rToken pairs. This helps to boost liquidity and enhances security.

● In the case of impermanent loss, liquidity providers are compensated with $FIS tokens.

● rDEX enables users to deposit more than 1 or 2 tokens asymmetrically in order to provide liquidity. This is a luxury not many decentralized exchanges offer.


Amongst the limitations faced by users of the rToken initiative, it is most felt by users of the Cosmos Ecosystem.

The procedure laid forth for minting, trading, and redeeming rTokens on the Cosmos ecosystem is complex and expensive. This has therefore limited the number of users, but the StaFi protocol has come up with StaFiHub, a way to eliminate the problems faced by users of the Cosmos Ecosystem that fancies the rToken idea.

StaFiHub is a StaFi parallel chain for Cosmos ecosystem rTokens. It is built on the Cosmos SDK to support Cosmos ecosystem staking derivatives.

The Cosmos ecosystem is currently thriving, and more users keep joining. Multiple vertical chains based on Cosmos SDK are currently emerging, with over 40 vertical public chains estimated to have been built on Cosmos SDK, and it is no surprise that the StaFi protocol is looking to improve its already established link to the ecosystem.

StaFiHub will help rToken users to easily obtain and trade Cosmos ecosystem rTokens such as rATOM and rLUNA, thereby expanding the rToken ecosystem.

Key Features of StaFiHub include:

  • It will be a service chain for the Cosmos ecosystem’s staking derivatives.
  • The chain function will be based on the Cosmos SDK, which is similar to Sifichain, TerraChain, and Osmosis Chain.
  • It will be possible to use the IBC cross-chain protocol. 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 same protocol.
  • Cosmos ecosystem tokens can directly mint out StaFiHub-based staking derivatives using the Keplr wallet and the corresponding PoS Token.
  • General Liquid Staking Solutions for Cosmos SDK Projects will be made available to the community. This is to encourage them to provide more staking derivatives.
  • The StaFi team will create a bridge linking the StaFi chain and StaFiHub to enable the seamless exchange of rTokens between the two chains.


Ardent followers of the StaFi project know that they have strived to improve how the crypto community views decentralized finance since its inception.

It all started with an idea to liquidize staked assets and enable a market for them. There have been challenges along the line, but these challenges have been met with resilience and efficiency. The StaFi protocol continues to prove that the proof of stake network is the go-to for a better crypto experience.

Stay connected with the StaFi project using the Links below:

Official Website |*| Telegram || Medium |*| Twitter



Helen Imah

I’m a TECH Lover, Blockchain Enthusiast, Strategic Digital Marketer, Data Scientist, Crypto Investor & Trader…