The Exploration of StaFi Parachain

Since the formal introduction of Rococo V1, the Polkadot parachain testnet, many community projects have been coming up with different parachain networks on the polkadot blockchain. Rococo is a public test network maintained by Parity and the Polkadot developer community. It is designed to test the consensus process of parachain and community-built parachains, as well as interactions between them. Sequel to this gave rise to the StaFi parachain which enables the flexibility and smoothness of the project.

In 2021, the Polkadot Parachain Slots Auction became one of the most popular cryptocurrency events. Investors have been concentrating on which projects will “occupy” the first parachain slots successfully. Now there is information of more than a dozen projects participating in the Polkadot Parachain Slots Auction.

To avoid confusion, parachains are the diverse individual layer-1 blockchains that run parallel within the Polkadot ecosystem (on both the Polkadot and Kusama Networks).

Parachains, which are linked to and secured by the central Relay Chain, share and benefit from Polkadot’s security, scalability, interoperability, and governance. Polkadot’s cross-chain composability allows any data or asset to be sent between parachains, allowing for a plethora of new use cases and applications. Cross-network bridges allow Parachains to connect to external networks such as Bitcoin and Ethereum.

Polkadot was designed to be a layer-0 multi-chain network, which means that the central Relay Chain provides layer-0 security and interoperability for up to 100 layer-1 blockchains connected as parachains.

What is StaFi?

StaFi is a protocol that resolves the conflict between Mainnet security and token liquidity in Proof-of-Stake consensus. Token holders stake using staking contracts built into the StaFi protocol and then receive alternative tokens, also known as rTokens, such as rXTZ or rATOM. rTokens are tradable, and it is possible to earn staking rewards from multiple original chains at the same time.

StaFi consists of the bottom, contract, and application layers. The bottom layer is primarily based on Substrate, a blockchain architecture built by Parity that integrates many development modules, including the consensus module, P2P module, and staking module.

The contract layer supports creating various staking contracts for different assets such as XTZ, ATOM, and DOT.

rTokens are a secondary token obtained by the Staker via the staking contract. For example, if you stake XTZ, you can get rXTZ. These assets have a 1:1 ratio. To be a holder of rTokens, you must have tokens staked to receive incentives. Additionally, rTokens can be traded on the market. After the transaction, the staking contract will adjust the reward and redemption rights.

The third layer, the application layer, supports third-party StaFi-based APIs or customized APIs to create a decentralized bonded asset trading market for rTokens to circulate, transfer, and trade on the StaFi Protocol.

Aside from the fact that StaFi is built on Substrate, it also uses Nominated Proof-of-Stake (NPoS) to complete Staking by establishing Staking Contracts in the upper layer to communicate with public chains. The Staking process is immune to StaFi’s contracts, for the latter act as the account book during Staking. Contract-staked tokens will be written into the contracts and eventually locked up on the original chain.

StaFi Validators (SV) and StaFi Special Validators (SSV) are required to maintain the StaFi protocol. SVs are in charge of the overall protocol’s security, while SSVs ensure the safety of all Staking Contracts. The protocol framework prioritizes the selection of validators and their motivations, which will be discussed further in the third section of this document.

The protocol is completely decentralized and is linked to Polkadot as a parallel chain. Meaning it shares Polkadot’s underlying consensus, plus, Polkadot also guarantees the main security and performance.

StaFi is built on Polkadot just like many other projects because of the ease of making a parachain with the help of Substrate. This is essential because the project becomes a native Polkadot compatibility — any blockchain built with Substrate will be natively compatible with Polkadot, allowing it to easily connect to Polkadot as a parachain as the Mainnet launches.

Currently, the StaFi team has developed a specific slot auction plan. Also, they have continued to update the community with the project’s token model as well as specific incentive methods to reserve a portion of the token in the community. The team has allocated and distributed forty percent of the tokens reserved in the community incentive program.

The publishing of the rToken solution on Ethereum 2.0, Polkadot, and Cosmos provide not only staking liquidity solutions for the public chains but also rToken protocol standards for PoS projects on the above three public blockchains. Subsequently, the StaFi protocol has launched the rToken solution for many other PoS projects.

Parachain features on Stafi protocol

Flexibility

Polkadot’s parachain model was created with the belief that the internet of the future will consist of many different types of blockchains cooperating. Blockchains, like the current version of the internet, must cater to a variety of needs: one chain may be designed for gaming, another for identity management, another for finance, and so on.

In accordance with this vision, StaFi makes it simple to access staked assets and eliminates the need to wait before you can withdraw and use your funds. The addition of rTokens makes the system more adaptable to run. For every stake asset, you have an equivalent rToken you can trade with and at the same time enjoy staking incentives. StaFi solves the liquidity problem, allowing more people, regardless of status, to participate in the staking initiatives.

Scalability

The parachain approach enables blockchains to achieve scalability at the layer-1 level rather than relying on layer-2 solutions. This method is more decentralized and efficient for establishing blockchain scalability. Transactions can be spread out and processed in parallel across an ecosystem of specialized layer-1 blockchains using parchains, dramatically enhancing throughput and scalability.

StaFi has collaborated with several projects to address Scalability difficulties with defi. For example, the collaboration with Marlin’s layer 0 network scaling protocol enables it to have a larger validator network without limiting block delays. This addresses three of the most important issues in the decentralized economy: scalability, security, and decentralization.

Interoperability

Parachains enable blockchain communities to have complete control and sovereignty over their layer-1 blockchain while also allowing them to freely trade with other parachains and other networks. Polkadot’s cross-chain composability enables the exchange of any type of data, including smart contract calls, verifiable credentials, and off-chain data from oracles like stock market price feeds. This puts an end to the blockchain space’s silos and opens up new opportunities for applications to interoperate and establish new services. Parachains prefer open economies and free commerce to Balkanization and chain-specific maximalism.

The purpose of StaFi rBridge is to aid in cross-chain interoperability between assets on the StaFi mainnet and assets in other ecosystems such as Ethereum, Polkadot, and Cosmos. As a result, StaFi continues to update rBridge products so that StaFi’s FIS tokens and rToken assets can freely travel between different public chains at a cheap cost.

Governance

Parachains are free to use whichever governance model they want, and they have access to some pre-built modules for creating multiple on-chain governance systems. The ability to use complex on-chain governance tools enables teams to dramatically limit the possibility of hard forks in their chain, which may potentially split their communities in half. On-chain governance also provides a form of accountable transparency for parachain communities, which is commonly required by many institutions and fiduciaries before getting involved in blockchain technology.

By establishing the notion of rTokens, StaFi has been implementing advancements into the decentralized finance industry. Proof of Stake networks typically struggles with liquidity concerns because their community members stake their tokens to gain rewards and protect the platform. StaFi opted to collaborate with the decentralized governance leader to improve the way community members decide what happens within StaFi. StaFi gains access to great governance solutions tailored to the decentralized financial environment as a result of such a relationship.

Conclusion

StaFi has remained dedicated to providing liquidity for stake assets and ensuring that everyone has the opportunity to participate. The StaFi parachain, as a decentralized concept, has enabled the scalability, security, and governance of crypto assets for all users. This could be worth checking out.

Stay connected with the StaFi project using the Links below:

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

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Helen IMAH

Helen IMAH

I’m a TECH Lover, Blockchain Enthusiast, Strategic Digital Marketer, Content Creator, Crypto Trader & Data Analyst…